We know from history that silver is volatile. Many times, in between those bouts of volatility, it can become downright quiet, even boring. The metal goes through price spikes that can be enormous, yet often short lived. That’s a double-edged sword. But knowing silver behaves this way can make it easier to accept. What’s more, those who harness that volatility can make it work to their advantage. And that is very rewarding.
Between 2002 and 2006, silver dropped 10% or more 4 separate times.
Then, between 2006 and 2011 more short, but sometimes deep corrections followed, with silver dropping 13% or more three times.
Overall, from 2001 until its peak in 2011, silver gave back 20% or more four times. But the real takeaway is that anyone who held on from the beginning enjoyed an astounding 1,080% gain.
The key is knowing whether silver is still in a bull market. That way, you are more willing to sit through corrections, even deeper ones, without selling. But this doesn’t mean you don’t do anything.
Some investors choose to lighten up their exposure to silver by perhaps selling some, or by selling certain silver investments, or portions of those investments. This
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Before anything else, I have to touch base on uranium again.
Let me start with the conclusion: buy.
If you are not positioned, consider that uranium has gone from US$30 per lb. three weeks ago to US$42.50 per lb. today. The gains are happening because the Sprott Physical Uranium Trust is buying uranium in the spot market.
I talked about this two weeks ago. At that point, the new Sprott fund had been active for a week and the uranium price was up a few dollars.
Two weeks later, two important things have happened. First, we’ve been able to watch Sprott deploy its capital and deploy it has. No one knew how quickly it would raise funds and buy physical but, using the chart below borrowed from Katusa Research (thanks to Marin and his team) we can see they are going big.
If you recall, the trust is raising funds through At The Market financing, which is a mechanism that lets the company sell new shares into the market at market price. So it’s like normal financing, but one that stays open and can raise as much as the company wants, up to the max stipulated in the ATM
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A friend of mine who has been in the uranium space for years sends me a daily uranium price update. Uranium is an opaque sector – there’s no spot price that you can just look up – so it’s great that he shares the pricing info he gets from a few (expensive) subscription services with a list of friends.
I always look. Of course, the daily change is often a few cents, or tens of cents. But for three days last week uranium gained between $0.75 and $1 a day.
That stood out.
What happened was a new player entered the uranium market and started buying. The amounts were not massive but the bids were consistent – and expected to remain so for months. And the uranium bought is being tucked away in storage, because it’s being bought as an investment.
Will this new buyer be the force that finally propels the uranium price upward, the straw that break the monotonous uranium market’s back? It might be.
This new player did not come out of nowhere. For the last few years, one of the most significant changes in the uranium space has been the development of stockpilers. I don’t
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