Week 36.1 Last Week Nightmare
Silver dropped from USD40/- all the way to USD26/- per oz. It was a nightmare for me. All though, this time I’m not as heavy loaded as last time in May 2011. I ‘m still greatly affected by this price movement. Few of my resellers are greatly affected by this rapid price movement. One of them promised to buy 80 oz at RM146/oz, then the price drop about RM20+ /oz. Yet he still committed to buy at that price. However, I hedged a few hundred oz more myself at that price (big loss for me lah). Brought some at USD39/oz, if I waited later, probably I would have brought at USD36/oz. Anyway, in summary regardless what you do, you still be wrong lah because the price is manipulated.
Well, as an appreciation to his commitment, I gave away most of my stock to him for resell to ensure that he covers back his expenses. Towards that weekend, I think both of us did not sleep well and try to sell as much as we can to average out our cost. In the end, this two weeks we end up working for nothing even though the sales was good, it just mainly average out our cost.
On top of that, I managed to lease some silver bar from my ex-customer for resell. On and off, I managed to source some silver from all my ex-customer. It’s just a tiring process, getting it from their home etc later got to distribute to a few customer. After deducting the lease charges and time spent, it‘s not that profitable after all.
One of my customers told me about CME margin call and Shanghai margin call has resulted in price dropping to USD26/oz. I was the one who told him about margin call in May 2011, yet now I completely forgotten about it since late August, I was busy with price drop and how to sell. Nevertheless, now is the time for me to reflect on how to do better in the future.
As part of the post mortem, comments from few of my customer, it’s big commercial Short are using this opportunity to reduce their short position by doing 1 short, 2 long on every single price drop. For more details, you may read the URL below
Once again, it may be an opportunity of your life-time to accumulate silver at low prices. RSI-14 daily chart now is at 27 now based on 30th Sept 2011. Time to buy now.
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