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Silver Recoups Sharp Loss And Rises 2% On Record Volume

GoldCore's picture




 

 

Today’s AM fix was USD 1,378.75, EUR 1,070.21 and GBP 908.39 per ounce.  

Yesterday’s AM fix was USD 1,353.75, EUR 1,051.95 and GBP 890.86 per ounce. 

Gold climbed $19.40 or 1.43% yesterday to $1,384.30/oz and silver finished 2% higher. 

Silver’s recovery yesterday from being 10% lower at one stage to recouping these losses and then rising over 2% was very positive technically. The key reversal is leading some to postulate that we may have seen the bottom or are close to a bottom. 


Spot Silver in USD, 3 Days, May 17, 20, 21 – (Bloomberg) 

This theory is bolstered by the fact that the 10% losses were due to a handful of a very large trades in a low volume session in Asia, while silver’s subsequent 12% reversal to the upside came amid extremely high trading volume with silver trading volume 82% higher than the 100 day moving average on the COMEX.

Silver's fall could have been related to the gyrating yen dollar price as some hedge funds and banks use proprietary trading systems and sharp losses in a leveraged yen dollar position could have led to forced liquidation of silver.

However, the scale of the 10% loss in the silver market, and only the silver market suffered such large losses, would suggest that it was not simply due to margin selling on yen speculation losses. 

Rather, the scale of selling suggests one or two massive sellers, likely institutional, who were determined to force the silver price lower, possibly in order to close or buy back underwater short positions.

Resistance in silver during the period March 2008 to September 2010 was $20/oz and this level provided support overnight and is an important long term support level.

While paper gold and silver is being manipulated though the use of leveraged selling on commodity exchanges and other gold and silver investment vehicles are being  liquidated – especially the ETFs, demand for physical gold and silver remains very robust as seen in high premiums internationally and lengthy waiting times for delivery.

The paper players have won the recent skirmishes but those who own gold and silver bullion and focus on the long term will win the price war.

The scale of demand from China and India continues to be underestimated and this demand has accelerated after the recent price weakness. Large buy orders from China, India and other Asian markets are pushing the physical premiums to record levels.


Spot Silver in USD, 2007-2013 – (Bloomberg)

India is paying a premium of nearly $40 per 10 gramme bars. Dubai buyers are paying a premium of $7-10 per kilogramme. 

Turkey is reported to be paying a premium of $25 an ounce over spot prices. 

Hong Kong and Singapore buyers are paying premium of $5 per ounce for gold bars.

Demand is not just very strong in Asia. Bullion coin and bar demand also remains very robust in the U.S. and in Europe where premiums have also risen.

Government mints in Australia, the U.S, Canada, South Africa, Austria and the UK are reporting soaring bullion coin demand and are having difficulty meeting the scale of demand. 

Silver coins, in particular, are seeing rising premiums and delays in delivery.

Also little reported is the fact that refineries in Switzerland and elsewhere are also finding it hard to cope with the scale of international demand for gold and silver bars. 

It is clear that the recent fall in gold and silver prices was triggered by speculative traders operating in the futures markets and to a lesser extent by more speculative buyers of ETFs. 


Cross Currency Table – (Bloomberg)

Their short-term view of generating a trading profit is in stark contrast to the views of long term investors and store of value buyers of gold and silver bullion, as evidenced by the massive wave of physical bullion buying that has been seen in the last month.

 

The smart money will again accumulate and dollar cost average into positions on the dip.

 

 

FREE Ebook: Guide to Buying Gold

 

NEWS
Gold rises, snapping 7-session losing streak – Market Watch

CME Halted Silver Trading 4 Times as Prices Slid 9% - Nasdaq

Gold Swings as Investors Weigh Stimulus Outlook Amid ETP Decline - Bloomberg

Silver and gold lurch higher after early dive - Reuters

COMMENTARY 
Markets are on a crazy, sugar-fuelled journey – The Telegraph

Paul Craig Roberts: No Bear Market in Gold
 - GoldSeek

The Last Investable Moment for Silver – SilverSeek

Barron's gets suspicious about gold market manipulation – Barron’s

For breaking news and commentary on financial markets and gold, follow us onTwitter.

 

 

 

 

 

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Wed, 05/22/2013 - 08:49 | 3587213 MacroAndCheese
MacroAndCheese's picture

GoldCore is a gold merchant.  They sell gold.  They want you to buy it from them.  They mark it up from the actual actively-traded gold price.  If McDonalds started posting "research" on the benefits of hamburgers, would you read it?  Would you believe it?

Tue, 05/21/2013 - 12:56 | 3584468 Godisanhftbot
Godisanhftbot's picture

just another successful stop running raid, move along, nothing to see here.

Tue, 05/21/2013 - 12:55 | 3584464 NEOSERF
NEOSERF's picture

Charts, ratios of earth's crust, historical prices...all means nothing considering the massive manipulation of prices by the few.  They want it to go down, stay the same or go up and it does that.  Effect here has no Cause, it simply has... Desire.

Tue, 05/21/2013 - 12:36 | 3584417 Gideon Gono
Gideon Gono's picture

How can anyone call a bottom in a market that is being manipulated by paper deriviatives?

Tue, 05/21/2013 - 12:42 | 3584430 Conax
Conax's picture

They can't.   I lost interest in the article when it said, "Silver's fall could have been related to the gyrating yen dollar price as some hedge funds and banks use proprietary trading systems and sharp losses in a leveraged yen dollar position could have led to forced liquidation of silver."  Especially on Sunday evenings. 

No matter what happens, good news or bad, all these huge funds liquidate silver.  For years I have been lectured that silver isn't good enough or big enough to even interest those people.  Too heavy, gutter metal, yada yadda..

But they always have tons to liquidate.

BS

Tue, 05/21/2013 - 13:31 | 3584550 moonstears
moonstears's picture

"...silver isn't good... Too heavy, gutter metal, yada yadda.."...Guess you are doing well Sir Conax, based on the construct of your gutters . Mine are aluminum, but still get the water off the roof, so, meh. I just put silver in holes in the ground, may take your advice on the gutter thingy, though, hide in plain sight?? Like it !

Tue, 05/21/2013 - 14:40 | 3584900 Conax
Conax's picture

I never quite understood the 'gutter metal' slur.  Maybe in days gone by the tin gutters were silver soldered at the joints.  I don't think it's gutter metal, I think it's the most useful element on the periodic table.

Tue, 05/21/2013 - 11:34 | 3584154 new game
new game's picture

never a better time to be a buyer!

Tue, 05/21/2013 - 12:23 | 3584389 Levadiakos
Levadiakos's picture

Bagholders, UNITE!!

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