Silver has suffered a lackluster year so far, really lagging gold’s upleg. Sentiment is still reeling following silver’s crushing selloff from mid-April to mid-May. But that plunge was largely driven by extreme silver-futures selling by speculators, including a blistering spike in short selling. The resulting excessive shorts have left silver with excellent near-term potential for a short squeeze, which would catapult it rapidly higher.
Early Stages of a Short Squeeze?
With Options Expiry Over, the Naked Shorts Have Released Gold and Silver to ROAR HIGHER:
*Editor note: With sentiment near all-time lows for the entire bull market, we thought it apropos to bring back SRSrocco’s viral, comprehensive FUNDAMENTAL ANALYSIS on the forces that will push silver over $100/oz.
PLEASE CHECK YOUR EMOTIONS AT THE DOOR AND REVIEW THE FUNDAMENTALS!
There are tremendous forces at work that will push silver over $100 an ounce.
According to the 2012 World Silver Survey, total global silver investment demand has risen from only 31.6 million oz in 2002 to a staggering 282.2 million oz in 2011. As world economic fiat based monetary system continues to deteriorate, investors are taking delivery of physical silver rather than holding on paper contracts that may not be backed by any metal whatsoever.
This has created a run on the LBMA… the largest metal exchange in the world. Once the world ‘s liquid energy supply starts its inevitable decline from its current plateau, annual silver metal production will decline as well. There will be no silver glut and there will be no silver available when the world’s fiat monetary system finally dries up and blows away.
Get ready. The forces for pushing silver over $100 have just begun.
Something negative did hit Bear Stearns in the first quarter of 2008; although there are remarkably few details of what went wrong. Since Bear had a significant presence in sub-prime mortgages and that market was in distress, it is assumed the fall of the firm was mortgage related. That may be true, but there was no general stress in the stock market through mid-March 2008 reflecting a credit crisis. Was there instead some specific trigger behind the company’s sudden collapse?
I believe that sudden and massive losses and margin calls of more than $2.5 billion on tens of thousands of short COMEX gold and silver contracts were the specific triggers that killed Bear Stearns. Let’s face it – Bear was so leveraged that a sudden demand of more than $2.5 billion in immediate payment for any reason could have put them under. Bear Stearns’ excessive gold and silver shorts on the COMEX are the most plausible reason for the sudden demise.
The long anticipated Gold & silver short squeeze has begun as gold has exploded after retesting $1300 overnight, and is now up nearly another $20 today to $1321.
Silver has been even more impressive, up nearly $1 on the day to a high of $21.38.
Should silver be able to clear $21.50, an astonishing short squeeze would be likely- potentially propelling the metal to $22.50-$23 before pausing.
As both metals appearing to be launching another vertical move to the upside, Friday is shaping up to be an explosive trading day to end gold & silver’s massive week!
On this week’s Metals & Markets The Doc & Eric Dubin discuss:
- A break from the traditional Friday cartel bashing as gold and silver blasted higher through $1400 $24, and closed at $1398 and $24.08 respectively!
- Triggering Friday’s precious metals rally, a weaker than expected July home sales report, coming in at 394k vs consensus of 486k, and a 13.4% decline over June- the steepest monthly drop in 3 years!
- Silver options expiration Aug. 27: Expect cartel to desperately attempt to defend $25.50 and then, $26. Look for a pause and short correction in silver prior to a massive assault on $30!
- The Doc’s report on physical market trends for the US bullion market
- War: When all else fails, it’s the “go to” solution; Why would President Assad gas his own people when he knows the US has declared the use of chemical weapons as a “red line” that if crossed would likely mean escalation/intervention? Russia may very well be correct in accusing the US backed rebels as being behind a false flag.
We dive in to these topics and much more in this week’s SD Weekly Metals & Markets!
Silver has suffered a miserable year so far, bludgeoned by gold’s unprecedented selling anomaly. The exceptional weakness in both metals was greatly exacerbated by futures speculators piling on short-side bets. But with silver shorts hitting record extremes, a super-bullish short squeeze now looms. Any rapid silver rally is likely to spook the highly-leveraged futures traders, sparking a MASSIVE stampede to cover.