Wednesday, May 19, 2004

Bill Fleckenstein, in his Contrarian Chronicles column, is bullish on silver. He writes:

Meanwhile, the precious metals have endured a brutality of their own, vis-à-vis a recent decline of some 30% in the price of silver. Though it's not possible to know where the bottom lies, my contacts in the dealer market say there has now been a good deal of short-selling by funds in precious metals.

I am fairly confident in making the statement that these metal shorts will only add fuel to the fire on the way back up, once these markets turn. As a friend and professional precious-metals trader told me last week: "Written in stone, those selling today will lose money. The only question is how long it takes."

The decline in silver was painful for me, but I am optimistic that the price will rise again and that my buy and hold silver stocks strategy will eventually offer even better rewards than it already has.

Fleck also notes that the gold ETF fund is still not available in the U.S.

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