T. Ferguson joins The Doc & Eric Dubin for a Special Market Alert edition for this week’s Metals & Markets, discussing:
- US Mint caught completely off guard by EPIC physical demand, SOLD OUT of Silver Eagles after burning through over 2 million oz in less than 2 hours Wednesday morning!
- Primary Dealer of Silver Eagles CAUGHT OVERSOLD– reportedly cancels previously placed contracts for Silver Eagles- a completely unprecedented development!
- Silver tests $15– are we staring at a 2008 Deja Vu collapse to support at $9?
- Not just the US Mint- Canadian Mint may be sold out of Maples as soon as Thursday, and one of the US’ largest private mint HALTS SILVER ROUND SALES!
You won’t want to miss a minute of this MUST LISTEN Special Market Alert Edition of the SD Weekly Metals & Markets below:
MASSIVE WAVE OF DEMAND HITS PHYSICAL SILVER MARKET WEDNESDAY!!
“Last night around 12:30 a.m. EST, $1.5 billion of paper gold was dumped into the Comex Globex computer trading system during one of the least liquid periods of trading in any 24 hour period. It was done when there was almost no resistance from the physical market. The two largest physical buying markets in the world were dormant when this hit occurred: India was closed for holiday observance and Shanghai was on its mid-day trading hiatus.” — Dave Kranzler, “They’re Burning The Furniture Now.”
Did the physical market just scream, “No Mas”? Oh to be a fly on the wall at the US Mint.
This morning, one of the largest dealers in the United States indicated silver eagle supplies were fine with over 2 million ounces in inventory. Just a couple of hours later and following Wednesday’s price smash, the US Mint announced a temporary suspension of sales.
This dealer is now suggesting contracts are going to have to be re-worked.
It’s too early to tell but it appears the US Mint was caught totally off-guard. They appear to have been operating on the assumption that declining prices wouldn’t generate a large burst in US demand. For a period of time, it looked like they might have been proven correct. No more. Over 2 million eagles flew out of the mint today in just a couple of hours – the fastest sales rate ever.
Mining Shares: Hinting that the bottom is in
I noted last Friday that we were starting to see signs of a partial blow-off in the mining share space. Today, GDXJ, the ETF specializing in Jr. mining shares, exceeded 30 million shares traded for the first time all year. Over the last 30 days, the ETF has seen dollar volume exceed more than five times the entire market capitalization of the ETF. A great many of the investors that were in the ETF only six months ago are gone. This is the sort of rotation that marks bottoms.
Traditional technical analysis would have someone argue this picture is hardly what one would look for to see a bottom put in place – that one would be catching a falling knife:
<insert gdxj ETF>
But the precious metals markets often do the exact opposite one would expect given that manipulation trumps chart patterns. It’s more productive to look at extremes like the picture painted above and to place it into the context of market forces that can act like a backstop to further downside – e.g., the news out of the mint today.
Silver Wheaton offers another interesting example of a chart that looks ugly from a short-term perspective. But the shares tried to reboundMonday and Wednesday in advance of the general mining sector, which is exactly what one would expect a bellwether “general” to do before carnage stopped in the sector overall. Silver Wheaton hasn’t lost additional ground since it’s plunge last Friday morning.
Ultimately, it’s too early to draw definitive conclusions from these data-points, but they are the sort of things I look for to spot an inflection point. The latest news from the Mint and leap in physical demand fits with well with Silver Wheaton trying to catch a bid. I continue to believe this week will mark the turning point for the precious metals.
Pipeline blows in Saudi Arabia
Speaking of patterns and relationships that no longer work in this rigged market, the precious metals market ignored news that a pipeline exploded in Saudi Arabia Wednesday morning. Initial speculation turned towards ISIS and a terrorist attack. Latest reports downplay that possibility but it’s still not clear what’s going on. While the cartel can and probably did suppress the “fear trade” in precious metals, per usual, we’re going to have to keep an eye on this situation. ISIS talks tough about going after Saudi Arabia and if they did make regular incursions into the country, gold and silver would ultimately respond to the upside.
PayPal refunding donations earmarked for Swiss gold referendum
We have heard reports that donations made to Matterhorn Asset Manamgement’s PayPal account are being refunded. Isn’t that special. PayPal cut off the donation flow early last week.
Thanks for turning in this week! — Eric Dubin