Silver Slumps As Risk Broadly Recovers

Tyler Durden's picture

Global risk markets and US equity futures were drifting lower together (post China trade deficit data) into this morning's confusion in Europe but around 430ET, equities pushed higher, Treasuries rallied rapidly as we approached the US day session open and broadly speaking risk was off (in everything except stocks). Commodities dropped notably with Oil and Silver losing over 1.5% from Friday's close before heading into the US open. The across-the-board weakness in credit and our broad risk asset proxy (CONTEXT) reversed, as if by magic, as the day-session open in the US dawned and led generally by Treasuries, which staged a 4-5bps sell-off from overnight low yields (with 2s10s30s notably rising on 30Y outperformance and 10Y underperformance), we leaked back to unchanged in ES (the e-mini S&P 500 futures contract) having traded in a very narrow range all day on low volumes (across MAR and JUN). VIX made headlines for its low levels but the steepness of the term structure should be a much bigger concern. AUD weakness spurred much of the early risk-off but accelerated stringer into the US close to maintain equities as close to green as possible. A very noisy day given very little news/event risk and the general confusion in European sovereign markets which all leaked wider. Credit and the vol term structure remain notable canaries as it appears EURJPY has become carry trade-of-the-day once again.


Credit and equity resynced into risk-on from the start of the US day session but credit (especially HY) remains notable underperformer post Greece...

It is worth perhaps noting that HYG ended very marginally in the red while SPY very marginally in the green and 4 of the 5 times this has occurred this year, SPY has underperformed the following day (and we note HYG pulled rapidly up to its VWAP at the close - suggesting some selling pressure).

Commodities showed some further divergence as Silver lost its luster today relative to the other metals (and WTI)...

Broadly speaking though the underperformance of Oil and AUDJPY kept CONTEXT weaker while the recovery in EURJPY and sell-off in Treasuries (and 2s10s30s) is what kept the spirit alive in stocks - even though volumes were abysmal...



Charts: Bloomberg

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trav7777's picture

all I know is that silverbugz lemmings who stampeded back in with the breathless calls of "silver to da moonz" when it showed some life moving from 33 to 37 have gotten their heads totally cut off and blowtorched

goldfreak's picture

and when it goes back to 50 will you be here like JonnyBravo?

Eisenhorn's picture

I'm as bullish on silver as they come, but he's right.  Why junk him?  Silver longs got ASSRAPED.  Me included.

Whalley World's picture

just hold and all will be well

AgShaman's picture

Speak for yourself...

He doesn't know squat.

I've bought at $30 and last week at $33. Oh woe is me....the DCA of my stack has moved from 9 to 10 to 11.

You got ass raped because you were late to the party.

Not all of us fit the profile you resemble

trembo slice's picture

We junk him because he has absolutely no comprehension that some people dont give a shit about playing the day-to-day price movements.  I'm 25, very little investible income... but I put every bit I can into physical silver when a dip coincides with an abundance savings.  My average price is well below $33 dollars. I'm bullish and no amount of Trav's incessant bitching will change that.  No one will pry my physical from my possession until I buy myself a house and thats not gonna happen until housing prices come down from the stratosphere.

Silverhog's picture

Yeah, I got killed buying my load @ $16.  Waiting for the drop to break even again.

Whalley World's picture

Silv4er is a buy under 50.  When you are fighting Jamie, you are in for a fight.  Sorkin says he is ripped and with all that free Gov't cheese, he can use paper to mark down silver like JC Penny.  Until he cant

trav7777's picture

using that gives a price for platinum of what, like $20,000 an ounce?

This is why crustal and production ratios are not as useful as they might seem.

WmMcK's picture

Prices in FRN could cross again anytime now ...

trav7777's picture

lol, just not in any commercially recoverable deposits...

I think I need to buy a gun's picture

i can't wait for the day when silver and oil are priced in gold ......

Xkwisetly Paneful's picture

I can't wait for the day they start disassembling houses for the underlying commodities,

oh right that's not happening anytime soon either.

TheFourthStooge-ing's picture

Pull your head out of your ass and you'll see that it's been happening for the last four or five years. So far it's just been for the copper. At some point, any unbroken windows will be repurposed for greenhouses, and lastly the framing and particleboard will be used for firewood. The only thing left will be the soggy remains of chinese sheetrock.


francis_sawyer's picture

"windows repurposed for greenhouses"


I've already done that... (Not with an abandoned home, but I just saved the old windows at the house when I had them replaced last year... They're being re-purposed for exactly that [greenhouse])...

I didn't replace or remove any copper, but I got my hands on as much junk copper I could (& bought the rest)... Made a radiator type tubing system to pump warm water (when needed) under the soil beds to help keep them from freezing (&/or cold water when the soil gets too hot)... It's still kind of rough, but it works...


Stanwick's picture

Gold will get killeed. When Bill (used to b a weatherman) Poodle of CNBS plays with gold bars from the NYSE floor...the top is in

Eisenhorn's picture


Sorry folks.  CNBC is showing Prime Time Specials on Gold.

Think about it.  CNBC is a mouthpiece for the cartels.

They are putting gold on PRIME TIME HOUR SPECIALS......why would that be?  Is it because they want you to protect yor wealth?  OR could it be the cartels looking to sell to bagholders maybe?

Buy at your own peril here.

Gold needs to hold over 1730 to be a buy and it needs to close over 1800 to be strongly bullish.

We are likely to see a short term drop to 1600 or so IMO.

Again, long term still bullish, but this is being setup to sucker you in or the short term.

francis_sawyer's picture


Look ~ I don't care one way or another, but looking to see what CNBC is doing to get a read on gold prices (in paper dollars) is ridiculous...

CNBC has done many specials on just about anything... Once you have footage in a can, it's a lot cheaper to re-edit it and put some programming on the air to save money...

I've also seen CNBC specials on hookers & marijuana...

Are you gonna call a "top" in weed & prostitution as well?

SAT 800's picture

Wrong. Screw gold buy Silver. Seriously.

tmosley's picture

Probably more accurate, but anyone with either PM will do well for themselves.  If they hold a significant % of their portfolio in it, they will maintain their social class, or move up one, pretty much no matter what.  

scatterbrains's picture

For them to send that shill Pissonme down to Dallas to interview Kyle Bass tells me Pissonme's Bosses wanted Kyle's views on the record one more time before they take the pm market down hard. This is bearish short term.


whatsinaname's picture

Completely off topic but anybody understand the BDI & BSI jump. Is CB liquidity being used to buoy shipping rates now ?

Yen Cross's picture

 A VERY divergent and noisy day indeed. These CNBS anal-cists are living in Gumby Land! All of the normal spring (Q-2) spending was done in Q-1. If they think 107$ crude-( 125.$ brent on the coast), WHERE THE BIG BUCKS ARE, is going to make for a " Go it BIG" Memorial day, then they had better head back to their HOPIUM PARLORS!  This shit makes me laugh! Look at the pathetic volume!

  These asshats are out of fresh Fed $'s and are trying to scam the retail market! What a fucking farce!

Lost Wages's picture

Tomorrow, tomorrow, I love you, tomorrow.

Bernanke's only a day away!

Tsar Pointless's picture

Silly wabbit - do what the HFT bots do: Buy equities!

octafinance's picture

It's interesting Jim Rogers still prefer silver to gold at these prices but Kyle bass and Michael Burry advocate gold purchases:

We will see who will win it at the end.

tmosley's picture

All the PM owners will win.  It's just a matter of whether they get the grand prize, or just first.

kito's picture

if you expect to win, you better hope the money supply picks up.....its rather big news that m1 and m2 are down lately, and that despite this, ben wont budge on qe3...............big deflationary wall of water coming soon...? dont expect any au or ag movement past their highs until qe3 is announced....and thats at least a year away.....

tmosley's picture

lol, sure.  You keep saying "deflation, deflation", yet money is being printed like no tomorrow, and gas is $3.55 in MARCH.  Not to mention the prices of everything else.

You don't get deflation in fiat currencies for any significant amount of time.  Not when people are running the presses and monetizing debt.

trav7777's picture

the fact that you just made this prediction with such certainty should make ANY holder of PMs *very* very fuckin nervous because your predictions don't normally take longer than a few days before blowing completely up in your face.

Let's just all cross our fingers and hope that this is one of the "twice a day."

tmosley's picture

Better sell your Phyzz Trav.  Do it if you have an ounce of conviction, you lowlife.

nope-1004's picture

EW's just correcting currently.  $33.14 is break point.  If it breaks through that, it will fall up to 10% further.  However, Silver is still longterm very bullish.  It will start to go up very soon - weeks / months.

Patience on this correction, because once it does complete, it's the last time the $30's will be seen for a very long time.


Stanwick's picture

PMs havent done crap in 2 years. They're due for one.

dark pools of soros's picture

well one trick would be to allow deflation to knock down oil/gas a bit during the summer's usual rise and that whole Iran invasion..  then print to infinity once the wells are stolen/liberated

kito's picture

trav you spew malodorous disinformation purely for the purposes of creating unwarranted hostility. perhaps trav you can point to a prediction of mine that has blown up? was it my call since last year that we wouldnt see qe3 until after elections? in fact i make very few calls here, so perhaps you can scan through my comments history and post one. thanks

kito's picture

and you are using gas prices as a barometer of inflation? not..........take a look at raw commodity price indices and let me know how they have fared since the end of qe2....take a look at gold, silver, etc. all off of their highs from last inflationistas love to say "print print" merely for the sound of it. yet when objective charts point to money supply shrinking, and commodity prices down off of their 2011 highs, and velocity of money in a freefall, you choose to instead shout self serving phrases like, "print" "print". you have nothing to go on to show printing or fed balance sheet expansion has continued in any real way since the end of qe2.......

tickhound's picture

Hi kito!

I can't wait for my Roy Rogers to start pricing down according to the indices.

This consumer says bring back the good ole days when one could absorb a Roy's regular roast beef, small fry, medium drink for $6.45.   

kito's picture

Don't worry, pink slime content is being boosted to 80 pct.....

tickhound's picture

Sweeet!  Cuz personally I can't taste the shit anyway.

tmosley's picture

Gas, more broadly energy, goes into EVERYTHING.  As such, gas, and more broadly energy, are good inflation barometers.  

Raw goods be damned.  You don't eat hard wheat, you eat bread.  And the price on that stuff only goes up, or the quality/quantity drops.  I'm sure before long I will cut into a loaf of store-bought to find that it is just a crust surrounding one big air bubble.

ffart's picture

You're right, after the 30% price increases in everything over the last 2 years we can expect the Fed to take a little breather, right? I mean, clearly the monetary expansion is just a result of our benevolent rulers caring for us little serfs, not bailing their own asses out from the raging brush fire that they themselves have created and are terrified of. Are you a fucking shill for the central bankers or something?