Last December, I thought SLV has had a long good run, I was up 42% since 09/08/10 when I bought the ishares at $19.5499. Now I’m ready to sell. So I sold. More from Sell SLV at $27.70
Since then SLV has take off like a rocket ship, peaking at $48.35.
Silver Margins are being raised by Comex, today for a second time and for the second trading day SLV is down. (Today by 8.64%). The minimum amount of cash that must be deposited when borrowing from brokers to trade silver futures will rise to $16,200 per contract from $14,513, the exchange said today in a an e-mailed statement. Silver futures dropped as much as 13 percent today after Comex raised margins by 13 percent at the close of business on April 29.
Additionally, speculators who turned silver into gold are now being blamed for the decline in SLV.
They are short-term traders who helped drive the nearly 30 percent parabolic price climb in silver futures in the past month, and analysts say they were behind its dramatic fall Sunday and Monday. Source: Sharon Epperson
“Recent buyers will be most impacted by margin increases,” says RBC precious metals analyst George Gero. “New margin requirements make silver more expensive to trade now than gold per contract for the average firm.”
The recent run-up is all on paper transactions and not actual demand for the physical metal, according to some analysts.
Some experts suggest that silver prices have been in a bubble-like spike over the past few weeks, and are extremely vulnerable to a sharp decline.”
Silver Bulls are selling. Sprott Asset Management, a silver bull, sold $35 million in PSLV shares last week, according to a document released by the SEC (via Zero Hedge). The sales occurred between April 18 and 25th. Source
Even Primero, a Canadian Silver mining corporation, settled a strike at its San Dimas gold-sliver mine in Mexico and expects output to be unaffected.
Target prices are around $37. I’m considering Selling Calls or Buying Puts. SLV looks done till after summer.