As discussed earlier, today’s price-action in the paper Comex gold market is nothing that a reflection of the Fed’s desperate attempt to keep the price of gold from breaking out above $1300. The reason for this is that a break-out above $1300 would trigger a lot of computer-generated buying and likely catapult gold in the $1500’s rather quickly. If you notice, since the end of April the Fed has slammed gold as it traded above $1290. $1300 was rejected on May 2nd and 3rd. It’s similar to when gold was punching on the ceilings set at $400, $500, $600 etc back in the mid-2000’s.
Silver is a much smaller market and is used for more than just a currency and wealth preservation asset. Depending on the relative strength of the economy, up 70% of all silver is used for industrial applications. At the margin, a small incremental shift in the demand curve for investment silver has the potential to bury the issuers of uncovered paper silver (Comex futures, OTC derivatives, LBMA forwards, etc).
When the Fed/ECB/BOE/BIS loses control of the precious metals derivatives markets – an event which could easily occur this year – silver’s rate of appreciation will stun most observers/commentators. The SGT Report invited me on its podcast show to discuss the precious metals market and the insidious corruption that has engulfed the U.S. system.
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No! No! This is hate speech! The US Dollar is a stunning and beautiful woman! THE US DOLLAR NEEDS HER SAFE SPACE!:
the mining bull says you’re correct about that $1300 breach… hop on board one and all
My question is to Dave — if naked shorts are allowed to be dumped on the Gold and Silver exchanges without any regard for reality, how can the companies that are shorting be stopped from shorting? It seems to me they control the deck and the rules on the Comex and CFTC have been tailored to allow them to manipulate the market and if that is the case what can stop them?
The physical market will eventually cause a massive default by the naked shorts. My view for 15 years has been that the U.S. will start a world war before it lets the physical market force the U.S. to reveal the truth. I stand by that call.
why would the US not do a behind-the- scene QE to pay off the short position. it seems to me it will handled the same way they bought the $1 trillion of treasury notes from China last year. Just my opinion but US currency is easy for them to create
how is that any different that a default? and what makes you think the counterparties want more U.S. fiat toilet paper?
“up 70% of all silver is used for industrial applications.”
With the world economy in a recession wouldn’t that be a big negative for silver? Unless investment demand is high enough to outnumber industrial demand and render a recession inconsequential.