As the MUST SEE 5 year silver US dollar chart below reveals, it appears the year plus sideways trading action in silver with minimal volatility is about to end.
The precious metals will offer one of the best safe havens as the world enters into the next paradigm… “The Death of the Business Cycle.”
Unfortunately, very few analysts, economists or investors realize the darkness that lies ahead.
Gold and silver are more than insurance…. they will be the wave of the future, and the future is now here.
Currently, the price of Brent Crude is trading at $113.35, while gold is at $1,275. This is an embarrassing 11.2 to 1 ratio…. thanks to the manipulation by the Fed and member banks.
Based on the historical gold/oil ratio, The BASE PRICE of gold should be over $2,000 an ounce.
I say base price because this just brings the value of gold back inline with its ratio to oil. This DOES NOT INCLUDE the huge invrease in monetary printing, debt and derivatives which have funneled a great deal of value away from the King Monetary Metal.
Once we include these factors, that base price of $2,000 should be higher by several orders of magnitude.
We can plainly see that the price of gold should already be north of $2,000… if it wasn’t for the continued manipulation by the Fed and Central Banks.
There is uneasiness across a number of markets with moment-to-moment volatility grinding almost to a halt.
It contributes to a feeling that this is the calm before a storm.
It is not unusual for there to be a summer lull, or for one market to suffer disinterest relative to another, but the current situation across the whole range of capital markets should be a major concern.
The signs are good. With record short positions in gold and silver, hedge funds and algorithmic traders should be worried at the lack of price confirmation: gold is holding well above its bear-market lows and silver is refusing to weaken into new low ground.
The sudden increase in shorts in both metals amounted to a dramatic bear raid. With gold rising every day this week the squeeze is now on, suggesting in the absence of any new and material factor the current rally should have enough legs to take gold to the $1300 level. The situation in silver is likely to have a more dramatic outcome.
Historically, a high open interest in silver is associated with short term market tops because the hedge funds have gotten negligently long silver futures and the market manipulating big banks have taken the other side with extreme-sized short positions.
This time around the situation is the exact the opposite.
The hedge funds are now historically short silver futures and the banks and silver producers (mining companies who hedge production using futures) are either net long silver or are sitting with historically low hedge positions.
Silver is now set up for a short squeeze of historic proportions.
The silver COT data (yes, I know, manipulated…) is, as I read it, as bullish for silver as it was at the silver bottom last June. This suggests another good buy zone either just passed or will arrive very soon.
Many technical indicators for both silver and gold markets are deeply over-extended on the down-side and flashing “buy signals.”
Silver has dropped back to levels seen in 2008 and 2010, before the run-up in late 2010 – April 2011.
Is another big rally about to happen?
BrotherJohnF is back in his latest Silver Update:
BrotherJohnF is back, predicting an imminent BIG SMASH in silver, in his latest silver update:
In this EXCLUSIVE, MUST LISTEN interview with The Doc, Eric Sprott dissects the fundamentals in the gold and silver markets, coverage of manipulation finally reaching the mainstream, and reveals his updated outlook on gold & silver.
Eric discusses why the precious metals options markets always expire at MAX PAIN for the customers, and why he urges all PM investors to STAY OUT of the futures options markets, and simply accumulate physical metal.
Sprott explains how PM manipulation shifted from being conducted solely by the Central banks to the dealers active daily participation that we see now, and discusses how much he personally lost when a Barclays trader manipulated gold down into the London fix.
Regarding his price outlook for the metals, with silver trading under $20 and gold trading near $1250, is Eric still looking for new highs in 2014?
His answer might shock you.
The Doc’s full Exclusive interview with Eric Sprott of Sprott Asset Management is below:
Well, it’s a bit of an exaggeration, but for the first three days of this week daily turnover in the gold future fell to about 80,000 contracts, compared with a more normal level of 120,000.
At the same time volatility fell to as close to zero as you can get.
Silver is now set up for a major bear squeeze, but for the fact that both silver and gold have a recent history of weakness into quarter ends. Gold bottomed a year ago on 26th June at under $1200, and again at the same level on 30 December. It also sold off into the end of the March quarter.
No doubt this predictable price behavior has encouraged silver’s bears into a technically dangerous position.
So, here’s the deal. DO NOT get itchy to buy or get long…YET. Let this play out.
Raise a mountain of dry powder and wait. Lay in the weeds with full knowledge of what is coming and then pounce later this month. Don’t be fooled by the first time GOFO slips negative. Recall that it did so on 12/9/13 only to move back positive on 12/12/13 before moving decisively negative on 12/19/13 ahead of the 12/31/13 Double Bottom.
Of course, in the long term, it matters little whether you add to your stack at $1240 or $1200. I get that. And anyone simply stacking should be sure to add on a consistent basis. For traders of metal and/or miners, however, the main opportunity awaits.
In his latest video update, Chris Duane explains why the most oversold markets make for the largest returns.
Duane makes the case for the fact that silver is poised to place LEGENDARY GAINS once the current correction is completed, and that now is the time to accumulate physical silver while the metal is out of favor by nearly everyone.
People marvel at the returns silver made from 2008-2010, but it is obvious that the next rally will blow that silver move away.
There is no need in trying to prove precious metals manipulation, because it’s out in the open… right in front of your eyes. However, this doesn’t stop the silly games being played by some of the well-known analysts in the precious metal community.
It is the siphoning of the majority of the worlds fiat currency-funds into the Derivative-Paper Market that is guilty of manipulating the values of gold and silver. If a fraction of these funds moved into physical assets such as gold and silver, their values would rise to unimaginable levels.
The world will be forced to move into Gold and Silver one way or another.
My advice is… you better get some before it’s too late.
10 year COMEX silver cycles appear to indicate that a MAJOR LOW in silver is due the last week of June.
If so, we may be looking at big moves coming in silver as the next cycle begins…