Open question - Financial

[Dan00001]

Silver has formed a multi decade pattern known as a "Cup & Handle". According to Thomas N. Bulkowski's studies, a reasonable target expectation would be a rise from the right cup lip of 61% of the height from the cup bottom to the right cup lip, which gives us a target of around $78

 

[HorseGuy]

Silver has formed a multi decade pattern known as a "Cup & Handle". According to Thomas N. Bulkowski's studies, a reasonable target expectation would be a rise from the right cup lip of 61% of the height from the cup bottom to the right cup lip, which gives us a target of around $78

$78?
Zzzzz. Wake me up when silver passes the $200 or $300 mark.

From a purely charting patterns perspective $78 marks a major expected resistance line so there will likely be a brief glut of sellers around there and maybe even a pullback in price for a while. But there are also many other factors to take into account which are all seeming to be about to converge at the same time to push it much higher. $78 doesn't take in to account the rapidly increasing industrial demand, major supply side shortages, the potential for geopolitical instability, mass buying by central banks and a collapsing global financial system. I think silver is likely to go much, MUCH higher than $78 before this bull run ends.

 

[Falstaff]

Bank rate today is about 75p/Dollar so that's £58.50/oz - and these are Troy oz's not the kitchen ounces? How does that match with the Britannias prices Dan quoted?
Without knowing a thing about it, my gut feel is that that is a bit low

Given the industrial demand etc I suspect Horseguy's optimism is warranted. If/when silver is sold by the private investors presumably, depending upon other income, there will be tax due? Or is it a separate category and allowance the same as dividends.
I imagine there is a small chance the UK might increase gold and silver tax rates "to stabilise the market" - guaranteed failure but a useful revenue earner ?

 

[HorseGuy]

Bank rate today is about 75p/Dollar so that's £58.50/oz - and these are Troy oz's not the kitchen ounces? How does that match with the Britannias prices Dan quoted?
Without knowing a thing about it, my gut feel is that that is a bit low

The current 'spot' price at the time of writing for silver is £49.48. But the average price for a real physical oz of silver delivered to your door is currently around £70 give or take a little bit either way depending on the seller.

https://atkinsonsbullion.com/silver...-gains-tax-free-uk-1oz-silver-coin-best-value

A chunk of this extra cost is due to the VAT paid on newly minted silver (there is often no tax to pay for second hand silver though depending on where it was minted and what country you are buying it in). There is also a premium of about £8 being added on to the price per oz of silver by the sellers due to the supply shortages at the moment. This high £8 premium is unusual and has been gradually increasing for about two years now. Normally you would expect the premium to be maybe one or two quid extra over the paper spot price to cover the costs incurred by the seller to run their business but now this is much higher because they are also having to pay more than spot themselves to buy the silver from mints or other sellers on the second hand market.

This means the real price of physical silver has separated from the paper 'spot' price which people trade in the markets. But real physical silver is already worth a fair bit more more than the charts are pretending it is worth and I expect this situation might continue to increase even more from here on in. It shouldn't be happening at all but it clearly is and I wonder if one day the the spot price may eventually become totally irrelevant if the price of real physical deliverable silver were ever to separate too for from it.

 

[HorseGuy]

Given the industrial demand etc I suspect Horseguy's optimism is warranted. If/when silver is sold by the private investors presumably, depending upon other income, there will be tax due? Or is it a separate category and allowance the same as dividends.

Disclaimer - I am not a qualified financial advisor or giving any financial advice here. Please check with a professional financial advisor first before making any investments.

This is how things currently stand to to best of my knowledge. With silver bullion minted by the Royal Mint being sold in the UK there should be no CGT to pay when you sell it later on. Of course you can't put it past the government not to change this tax law in the future but as things stand currently it is totally tax free when you sell second hand Royal Mint bullion.

If you want any tax or other information about buying or selling silver bullion call an established and reputable well known dealer such as either Chards or Atkinsons and ask them.

 

[Dan00001]

If you can find a broker that's part of the VAT Margin scheme, they can sell used silver VAT free (there is VAT charged only on the profits the dealer makes)

 

[Dan00001]

$78?
Zzzzz. Wake me up when silver passes the $200 or $300 mark.

From a purely charting patterns perspective $78 marks a major expected resistance line so there will likely be a brief glut of sellers around there and maybe even a pullback in price for a while. But there are also many other factors to take into account which are all seeming to be about to converge at the same time to push it much higher. $78 doesn't take in to account the rapidly increasing industrial demand, major supply side shortages, the potential for geopolitical instability, mass buying by central banks and a collapsing global financial system. I think silver is likely to go much, MUCH higher than $78 before this bull run ends.

Yeah, this isn't an ultimate price, it's simply a target for taking profit on your trade, if you are trading the Cup & Handle setup, which I am. I expect Silver to go much higher, but I also expect at some point there to be some very volatile swings, which could easily wipe out the profits on my leveraged positions.

 

[Dan00001]

I expect there to be some strong resistance at $70 - That is where I plan to start selling.

 

[HorseGuy]

I expect there to be some strong resistance at $70 - That is where I plan to start selling.

It's never wrong to take some profit when you are up on an investment. $70 makes a lot of sense if you're leveraged. Eeek! Brave.

For holders of physical silver or silver mining stocks, I think exiting at $70 would be far too early. I will be monitoring the G/S ratio very closely. Maybe once it gets down to 30:1 that will be a good time to start gradually dollar cost averaginging out of physical silver or silver mining stock positions and moving into something else as the G/S ratio continues to drop down to 20:1 or lower (if it actually gets that low, I might be wrong of course).

 

[Dan00001]

I mainly trade the indices using 3x leveraged ETF's, I'm up over 30% on the year. I trade precious metals the same way but a lot more cautiously. Metals are more volatile, and the don't have as strict circuit breakers as the indices have. A major drop in the underlying will more or less wipe out the leveraged funds.

 

[Dan00001]

If my account was big enough, I would be writing covered calls on my long S&P & NASDAQ positions to further increase profits but I'm too poor to be trading in those sizes.

 

[HorseGuy]

I mainly trade the indices using 3x leveraged ETF's, I'm up over 30% on the year. I trade precious metals the same way but a lot more cautiously. Metals are more volatile, and the don't have as strict circuit breakers as the indices have. A major drop in the underlying will more or less wipe out the leveraged funds.

I'm a slow and safe investor who prefers to gradually average in/out of long term positions which tend to last for years rather than weeks or months trying to make a fast buck. All that short term leveraged trading stuff scares the willies out of me. Good luck to you though. Your plan sounds like a good one to me and I expect you will probably do well with it. Personally I'm not brave enough to be in those kind of positions which could get wiped out if there were a unexpected drop mid-way through a long term bull run.

Mind you that said I did dabble in crypto alt-coins a while ago where massive 50% movements up or down were considered to be just an regular quiet Tuesday afternoon of trading. That said it was just with 'pin money' and never leveraged. Did quite well out of it percentage wise but that could easily have gone either way to be honest. It was more for the fun of the game and the process of fast self-education in crypto (you never really understand something until you put some skin in the game in my opinion) rather than it being a serious long term investment proposition.

 

[Dan00001]

I'm a slow and safe investor who prefers to gradually average in/out of long term positions which tend to last for years rather than weeks or months trying to make a fast buck. All that short term leveraged trading stuff scares the willies out of me. Good luck to you though. Your plan sounds like a good one to me and I expect you will probably do well with it. Personally I'm not brave enough to be in those kind of positions which could get wiped out if there were a unexpected drop mid-way through a long term bull run.

Mind you that said I did dabble in crypto alt-coins a while ago where massive 50% movements up or down were considered to be just an regular quiet Tuesday afternoon of trading. That said it was just with 'pin money' and never leveraged. Did quite well out of it percentage wise but that could easily have gone either way to be honest. It was more for the fun of the game and the process of fast self-education in crypto (you never really understand something until you put some skin in the game in my opinion) rather than it being a serious long term investment proposition.

I am having some mentoring from a hedge fund manager, he's the one who taught me this strategy, although he's very vocal that trading should be only a small percentage of your account and that the majority should be invested in the indices for long term returns.

The most crazy gains I've personally seen was in 2020 with first the special purpose acquisition companies where I was buying and selling the warrants for hundreds of percent and sometimes even over 1000% returns, and then the penny stock craze where on my best return I saw 3,500% over the course of a few months.

 

[HorseGuy]

This is just a rumour so no definite confirmation as yet. But the word on the internet says that one of the too big to fail banks just collapsed last night when it was unable to pay its margin calls on silver and needed to be bailed out by the FED who pumped an additional $34 billion into the overnight repo facility. That's in addition to the $17 billion extra which already went in last Friday.

I'm happy to say that my bank accounts are all virtually empty and I have enough spare physical cash on hand to tide me over for a while in case there is a domino effect of collapsing banks resulting from this. It’s possible that peoples bank accounts might get frozen while the central banks attempt to bail out any collapsing banks with vast quantities of freshly printed QE digitally currency. As I say this is just rumour and talk at this stage so there is a good chance it may amount to being a false alarm. Something worth monitoring closely over the coming hours and days though. I just wanted to give an early heads up warning to anyone who might be interested.

 

[demented dale]

This is just a rumour so no definite confirmation as yet. But the word on the internet says that one of the too big to fail banks just collapsed last night when it was unable to pay its margin calls on silver and needed to be bailed out by the FED who pumped an additional $34 billion into the overnight repo facility. That's in addition to the $17 billion extra which already went in last Friday.

I'm happy to say that my bank accounts are all virtually empty and I have enough spare physical cash on hand to tide me over for a while in case there is a domino effect of collapsing banks resulting from this. It’s possible that peoples bank accounts might get frozen while the central banks attempt to bail out any collapsing banks with vast quantities of freshly printed QE digitally currency. As I say this is just rumour and talk at this stage so there is a good chance it may amount to being a false alarm. Something worth monitoring closely over the coming hours and days though. I just wanted to give an early heads up warning to anyone who might be interested.

I am following it closely. Many people are going to lose a lot of money if it continues on this downward spiral. interesting times. xxx

 

[Chris]

Genuine question - by what means are you following it closely which the media aren’t aware of?

 

[Falstaff]

verry interrresting - it's in the open media, e.g.silvertrade.com
I noted Musk was quoted talking about the impact silver shortages were having on industrial few days ago.

 

[Keith_Beef]

On Revolut's platform, silver peaked at around €70 just after midnight CET and was about €60 at 16h25.

 

[Dan00001]

I exited my silver longs entirely at 8am this morning when the LSE opened. I ended up with a profit that increased that accounts value by over 9% so it was a very nice trade. I will be looking to trade Silver again.

 

[HorseGuy]

Genuine question - by what means are you following it closely which the media aren’t aware of?

Only Youtube commentators, Reddit posts and on the Silver Forum. Several questionable sources of rumour and hearsay but certainly not anywhere reliable which I have been able to independently verify for myself. Hence why I said that there is a good chance this may turn out to being a false alarm. However where there is smoke there is often fire and those sources mentioned above do have a pretty good (but not perfect) track record so don't write them of completely. But do take it with a hefty pinch of salt.

Also (and this part has been reliably confirmed) the margin requirement for silver futures was recently and without any official prior warning increased today. It was raised upto $25,000 which has had the effect of forcing many of the current silver futures contract holders to sell their position early due this sudden change in the rules. This forced selling of paper silver contracts has had a temporary but sharp knock on effect of drastically lowering the spot price of silver today. This is exactly kind of dirty tactic which we would expect to see happen if one or more of major 'too big to fail' banks were getting into in trouble due their inability to honor silver margin calls which are coming due.