Gold and silver’s correction continued throughout the overnight Asian and London session, with silver trading as low as $28.24, and gold down to $1555.
Silver bounced quickly back into the $28.40′s, and has traded as high as $28.69 on Monday’s COMEX. If $28 cannot hold as the final bottom, silver is looking at a 3rd dip to $26, which as we have mentioned, now also provides massive support as the bottom of the rising 12 year trend channel for silver.
Ted Butler estimates JP Morgan is now down to 12,000 net naked shorts in silver- their lowest short position since they acquired Bear Stearns’ short position in 2008. It appears that The Morgue is perhaps getting ready to extricate themselves from their short silver position, likely with one final smash.
Gold was also down hard overnight to support at $1555. It looks like gold is likely to test $1500, and possibly briefly dip into the upper $1400′s, which would provide an extraordinary buying opp for gold.
The silver/gold ratio has widened to 55/1 however, so we will not be buying any gold anytime soon until the ratio narrows considerably, as silver is simply too great of a value compared to gold at current prices in our opinion (although as seen in 2008, this ratio could still widen considerably during a crisis).