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Questions On Silver’s Money Flows
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Written by Brad Zigler
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July 29, 2010 1:03 pm EDT |
Real-time Monetary Inflation (last 12 months): -1.6%
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After the break in gold prices this month, a fair amount of questions popped up ‘round the water cooler about the money flows into and out of the iShares Silver Trust (NYSE Arca: SLV). The queries were prompted by the dissonance between the money flows and share prices in the SPDR Gold Shares Trust (NYSE Arca: GLD) examined in a preceding column (see "Gold's Waning Strength"). Well, the money flows were, and are, different. There hasn't been much dissociation in SLV's money flow. Its Money Flow Index walked pretty much side by side with the trust's share price this year. SLV And Money Flow Index 
Save for a couple of relatively short patches in April and mid-July, wherever SLV went, its MFI went. That doesn't mean SLV's out of the woods, though. The MFI has been downtrending—albeit with a fair degree of volatility—since March. Broadly, you could say there was some dissonance. SLV's upward price trend didn't peak ‘til May, but we have the luxury of hindsight to see that now. SLV's price and its MFI are now congruent. Both have downtrended. Whether or not that trend continues is the subject for a future column.
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