It’s Panic Stations for Precious Metals…and More

No wonder they call it the devil’s metal…

Silver, that is. In the space of 24 hours, it opened at $15.39, traded as low as $14.15 and as high as $16.81, before finally closing the US session at $16.69. That is a wild ride. There will be some shell-shocked traders after that little session.

From top to bottom, that’s a range of nearly 20%…in 24 hours.

To put the silver move into perspective, gold traded in a massive $80 range…but that only represented a move of 7%. If it were to match silver, you’d need to see a trading range of nearly $200!

So if you’re still on the silver horse, you’ve either got nerves of steel or you’re blissfully ignorant — or a bit of both.

The action in precious metals shares in Australia was emblematic of the panic going on across the whole commodity complex. I haven’t seen that type of panic selling since the dark days of 2008. It was pure fear.

Bottom pickers should start to come into the market now, as yesterday’s carnage certainly shook many weak hands out of their positions. Whether it’s a lasting bottom is impossible to tell. We’ll only know in hindsight. But there could be room for a bit of a rally before more sellers come and take profits.

If you’re keen to speculate on a bounce and pick up some beaten down oil explorers, check out these three picks from my Diggers and Drillers colleague Jason Stevenson.

As I mentioned yesterday, these wild moves are all about the currency markets. The US dollar was weak overnight and everything non-dollarish (including commodities) all did well.

This rising volatility is the result of the currency wars. And as the years unfold, it’s only going to get worse.

The Australian dollar got a bit of a boost from the weaker greenback, although it’s only just keeping its head above US$0.85. That could be because the price crash of our great future export hopes, iron ore and LNG, is leading many in the market to bet on future interest rate cuts — rather than rises — in 2015.

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Greg Canavan
Greg Canavan is a contributing Editor of Markets and Money and is the foremost authority for retail investors on value investing in Australia. He is a former head of Australasian Research for an Australian asset-management group and has been a regular guest on CNBC, Sky Business’s The Perrett Report and Lateline Business. Greg is also the editor of Crisis & Opportunity, an investment publication designed to help investors profit from companies and stocks that are undervalued on the market. To follow Greg's financial world view more closely you can subscribe to Markets and Money for free here. If you’re already a Markets and Money subscriber, then we recommend you also join him on Google+. It's where he shares investment research, commentary and ideas that he can't always fit into his regular Markets and Money emails. For more on Greg go here.

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slewie the pi-rat
i see there is some NEW site oversight: “Letters will be edited for clarity, punctuation, spelling and length. Abusive or off-topic comments will not be posted. We will not post all comments.” whoever came up with this may have revealed something about him/herself. in a classification scheme of personality/character types, i think we have what is called a “Type One” here: Perfectionist; Reformer; Grammarian. ~”High internal standards of correctness are both a blessing and a curse for the fussy, critical, idealistic…type One.” ~”The Perfectionist’s goal is to do the right thing. A famous One, Gandhi, was relentless in striving to… Read more »

I only visit this site to see what the dummies are saying. I get my financial news from zerohedge.

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