Silver Recovering After Overnight Sell-off, Gold Back Above $1600

silverSilver is recovering early in Wednesday trading after being smashed to $28 overnight, with the metal already retracing half of its losses to $28.40. 

Silver appears to be stalling however at the bottom of its 4 week trading range of $28.40-$29.50, and having broken out of that range to the downside, will likely see a $27 handle before selling subsides.

*Update: silver has now retraced its entire overnight smash with a vertical move to $28.70

 

Silver’s big smash began just after midnight, with a 2nd wave of selling beginning just after the London open:

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*Update: vertical move in progress retracing the rest of overnight smash:

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While gold remains stuck under $1600, it has been much stronger throughout the overnight session:

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Gold needs to regain the $1600 level and surpass its recent high of $1615 to put the $1500′s clearly in the rear-view mirror.

*Update: Gold has also cleared resistance at $1600, with a last of $1609

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Comments

  1. now explain this…
    why would contrary to what has always been the trend – strong support during trading in Asia – would for the 1st time i can remember someone dump that much Silver into the market????  the London dump of course is an every day occurrence but who the hell was selling in Asia????
    and this the day before the banks in Cyprus r “supposed” to be reopened?????
    BULLSHIT…………………………….
     

  2. Looks like silver will see that special 27 handle today.  This doesn’t surprise me.

  3. The price of gold and silver are expressed in Euro grow!
    See the chart for real coins in euro currency:
    http://www.coininvestdirect.com/en/silver_coins/american-eagle-1-dollar-1oz-silver-2013.html

  4. Recovering by having another heart attack

  5. I think that Cyprus – a new type of concentration camp, built by Frau Merkel, for the people of the Cypriots.

    Neutron bomb, leaving intact for the winner of the property and infrastructure defeated nation.
    But the Economic bomb, leaves as addition for the winner, all people defeated nation – like a crowd of hungry slaves.

  6. Gold is hanging on.  Looking at the little chart I guess we would call that a parabolic move higher here.

  7. Things are going to get worse before they get better. Ramping up the attack just before the banks reopen may be a signal that the cartel views bank runs throughout Europe to be inevitable.  If Cyprus really is to act as a template for the rest of Europe, then people in the PIIGS will be flocking to Gold and Silver.  Just look at what has happened to Bitcoin over the last couple weeks.
     
    If I understand the COT report correctly, the Cartel still has over 130 million oz net short to use in their assault on the spot price.  However, this is down from over 290 million oz net short just back in December.  That’s a decrease of 45% over the last 3 months! 

    We have seen 100-200 million oz dumped on the market during a raid before.  So conceivably the Cartel is within striking range to flip its position in a single raid.  In reality, they have over 400 million oz short, offset by the contracts they have long.  So they have the firepower to issue massive consecutive raids to then flip their position long.  

    Maybe I’m looking at this incorrectly, but I believe the cartel could issue raids on the London, NY and Asian open and be heavy to the long side after having smashed the metal $2-$3 in a single day.  When we see this  kind of a price decline is when I’ll believe things are finally ready to take off. 

  8. Why do the Central banks need to smash the silver price down 2 or 3 more dollars?  What advantage does this give them?  If they continue to short this market they eventually have to cover before they begin to trade on the long side.  I guess I just don’t understand this manipulation stuff.  My view is that the banks know they can’t hold the price down permanently at these low levels.  They want to be able to cover I am sure.  Maybe they are confident they can hold the prices below 30 for the next year.  They are very arrogant.

    • My sense is thst they are losing control and at this point desperation kicks in. When the walls are closing in on a criminal everything, including the kitchen sink comes out.
       This is on brotherjohn’s site and clearly in my view shows the naked, obvious manipulation we have been treated to.. they are throwing the book at silver which in any properly regulated market would have had people behind bars or riding the lightning years ago. Despite my disgust with the market right now, I think I’ll buy a tube of maples this friday.

       

    • Dirt, this trading range we are in is so tight right now that it is eery.  Probably a good time to buy some silver.  

    • Smashing the price down $2-$3 would allow them to cover short positions that were established at lower price levels.  Realistically, they probably don’t care much about the small swings in price.  Rather it is more important to just maintain current price levels while they take physical delivery of metal of their own.  

      What is most important is that each time the smash the price down we are seeing strong support as people are buying the dips.  The cartel has reduced its net short position by 45% in 3 months and the price has only dropped $4. My belief is that there is stronger support at the current price levels, so even by exhausting their remaining short contracts we will only see an additional drop of $2-$3.  Given this belief, I find if foolish to try and time the bottom if there is only a downside risk of 10% loss when the upside is likely 200-300% when this thing takes off. 

      Personally, I don’t agree with the sentiment that the cartel will ever be broken.  They will profit massively when they decide to flip their position to long and let the price run up.  I just want to be long with them when that happens.  

      As for the timeline, it is impossible to predict but I do believe Cyprus can be a catalyst for a major crash in the European market.  If bank runs begin in Cyprus (they inevitably will once the banks reopen) we could see this spread to Spain and Italy as fear spreads.  This will likely cause money to flow out of European markets and into precious metals and US Treasuries and Equities.

      This will cause PM prices to rise in Euros, but will likely trade sideways in US $ for some time as the Dollar will strengthen based on Euro weakness.  I’m guessing the Dow gets over 15000 as a result. 

      However, the only way to save Europe will be for the Fed to accelerate its lending to Euro banks, which will eventually bring down the dollar as well as US treasuries and equities.  PMs will be the only viable investment left, unless the BRICS present a viable alternative currency in the near future.  This is when the true bull run for PMs will begin, as most of the world becomes mired in stagflation. 

    • While th ey dump a huge amount of silver they make a bet on the opposite play and profit from the drop.

  9. Bargain hunters had a field day for a couple hours this morning.  Power to them.

  10. In other news.. Cyprus has enacted capital controls, and their banks remain closed. BUT… in greece, cypriot banks are open, free of capital controls. Congrats to these crooked EU bastards. The Russians (whom the entire idea of this abortion was to punish) will get away comparatively scot free while cypriot citizens will be ground into dust.
    To the banksters and crooked politicians, in the immortal words of bruce dickinson, Your Soul (long since sold) will BURN, in a Lake of Fire.
     
     

  11. The sell off was around 2 AM eastern time. London was most likely where it started this day. Tomorrow is it China or Wall St.? Tune in. Same bat time, same bat channel.

  12. Guess what? Now gold is back under 1600$ per ounce and silver also lost some values in terms of dollars. Although, the prices didn’t change at my local coin shops.

  13. Also I forgot to mention for the new precious metals buyers, you should never give up! Keep holding your precious metals even if the values of it in terms of fiat currencies are diminishing. I would say that you should wait for at least five years to see good results.

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