falling-bearUnlike gold, where Comex volume is moderate, silver volume is high indicating very strong support at current levels. The obvious conclusion is that bullion banks trying to balance their silver books cannot do so at current prices.
Yet higher prices are likely to trigger a vicious bear squeeze, so it appears the bullion banks with short silver positions will remain trapped either way.


Submitted by Alasdair Macleod, Gold Money:

Gold and silver prices gained modestly over the week, during which the latest FOMC minutes were released. These were generally read to be more dovish compared with the previous month.

FOMC members appear from the minutes to be confused. The previous month’s conclusion, that if it wasn’t for the weather the economy is improving and so interest rates will increase a little earlier than expected, is replaced with renewed anxiety about the outlook now the weather has improved. And who can blame them: after QE1, 2 and 3, some iffy numbers like unemployment have fallen, but where’s the price inflation? The overriding concern for all central bankers is still the prospect of deflation.

As an aside the numbers behind the Fiat Money Quantity were released this morning, and they have risen a further $135bn, dismissing any thoughts that tapering QE might be the problem. It’s not, because monetary inflation is continuing regardless.
Last Friday I wrote about the divergence in open interest between gold and silver. This has continued into this week and is really unusual. First, gold’s chart:

gold chart

The low point for gold’s open interest was last Friday, when gold was already four days into its rally. This signals very low levels of speculative interest: the last seller has turned off the lights and left the building. Therefore, gold appears to have built a short-term base under $1300.

Silver’s chart is chalk to gold’s cheese.

silver chart


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In this case attempts by market-makers to shake out the bulls have been met by solid demand with open interest rising strongly. The exception is the Money Managers category, which suffers frequent and dramatic changes of mind. The chart below shows the dramatic volatility in Money Managers’ short positions.

mm silver shorts

The long-term average of Money Managers’ shorts before 2013 was 6,130 contracts, yet in the last five weeks they have increased them by nearly 16,000 contracts. This increase in shorts should have allowed the bullion banks to reduce their short positions. Not so: according to the most recent Bank Participation Report they are net short of a total of 35,321 contracts, an increase of over 3,000 contracts last month.

Unlike gold, where Comex volume is moderate, silver volume is high indicating very strong support at current levels. The obvious conclusion is that bullion banks trying to balance their silver books cannot do so at current prices. Yet higher prices are likely to trigger a vicious bear squeeze, so it appears the bullion banks with short silver positions will remain trapped either way.

 

Next week

Bear in mind the run-up to Easter next week-end, which is why Tuesday and Wednesday have lots of announcements while on Friday there is only one. My next market report will be on Thursday.

Monday.

Eurozone: Industrial Production.
US: Retail Sales, Business Inventory.

Tuesday.

UK: CPI, Input Prices, Output Prices, ONS House Prices.
Eurozone: Trade Balance, ZEW Economic Sentiment.
US: CPI, Empire State Survey, Net Long-Term TICS Flows, NAHB Builders Survey.

Wednesday.

Japan: Capacity Utilisation, Industrial Production.
UK: Average Earnings, Claimant Count, ILO Unemployment Rate, Public Borrowing. Eurozone: HICP (Final).
US: Building Permits, Housing Starts, Capacity Utilisation, Industrial Production.

Thursday.

Japan: Consumer Confidence.
Eurozone: Current Account.
US: Initial Claims.

Friday.


US: Leading Indicator.

    • I dunno Sam, their “checkbook” far exceeds ours. Only they are allowed to ‘print’ fiat money, which is unlawful (not illegal) to offset our Free Society.
       
      Blacks Law Dictionary: (Link to all you good people: – livingfreeandclear.com/downloads/files/Black%27sLaw4th.pdf)
       
      COUNTERFEIT. In criminal law. To forge;
      to copy or imitate, without authority or right, and
      with a view to deceive or defraud, by passing the
      copy or thing forged for that which is original
      or genuine. Most commonly applied to the fraud-
      ulent and criminal imitation of money. State v.
      McKenzie, 42 Me. 392; U. S. v. Barrett, D.C.N.D.,
      111 F. 369; DeRose v. People, 64 Colo. 332, 171
      P. 359, L.R.A.1918C, 1193; Metropolitan Nat.
      Bank v. National Surety Co., D.C.Minn., 48 F.
      2d 611, 612.
       

      COUNTERFEIT COIN. Coin not genuine, but re-
      sembling or apparently intended to resemble or
      pass for genuine coin, including genuine coin pre-
      pared or altered so as to resemble or pass for
      coin of a higher denomination. U. S. v. Hopkins,
      D.C.N.C., 26 F. 443; U. S. v. Bogart, 24 Fed.Cas.
      1185; U. S. v. Gellman, D.C.Minn., 44 F.Supp. 360,
      363.
       
      COUNTERFEITER. In criminal law. One who
      unlawfully makes base coin in imitation of the
      true metal, or forges false currency, or any in-
      strument of writing, bearing a likeness and simili-
      tude to that which is lawful and genuine, with an
      intention of deceiving and imposing upon man-
      kind. Thirman v. Matthews, 1 Stew., Ala., 384

  1. Tonight we’ll see if Silver is in a Bear’s Market. GOFO is negative right now and that means PM’s will start heading up so we’ll see as 4oz say’s.
    By the way check this out, their really going after our Fiat. Pensions and IRA’s next?
    http://www.washingtonpost.com/politics/social-security-treasury-target-hundreds-of-thousands-of-taxpayers-for-parents-old-debts/2014/04/10/74ac8eae-bf4d-11e3-bcec-b71ee10e9bc3_story.html?tid=pm_pop

  2. Where is the price inflation? Try your local grocery store where prices are up a solid 10++% Packages are smaller, toilet paper used to be a 300 sheet roll, now 264 sheet as an example, and the price is up on top of that.

  3. It’s staggering that the IRS would take refunds from the kids of parents who might have gotten something, any benefit, 10-40 years ago. No way for the kids to disprove it.  No way for the IRS to prove it. Most of us in our 50 and 60 age range have seen our parents off the planet.
     This is tyranny of the worst sort. . Between this and Bundy ranch the government overeach has gone way passt the tipping  point

    This gummint is in FULL RETARD NAZI territory
     Maybe even beyond them
    Keep your eyes open, heads down and watch for the incoming rounds Outgoing is always preferred

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