SD Metals & Markets: JP Morgan Has Likely Covered Large Percentage Of Silver Short Position!

On this week’s SD Weekly Metals & Markets, we’ll cover:

  • Doc’s physical market trends report- silver shortage easing?

  • Back over $22 silver with the commercials (& likely JP Morgan) nearly net neutral in silver– what it likely means

  • Next week’s FOMC: QE tapered or has the Fed run out of room for MOPE with foreign governments outright selling $50 B of Treasuries in May?

  • We cover Edward Snowden & the NSA’s PRISMGate with a “Wag the Dog” rhetoric and war drums ramping up against Syria- major regional conflict could erupt involving Iran, Syria, Russia, and Israel should the US launch a ground invasion of Syria

The SD Weekly Metals & Markets with Eric Dubin & The Doc is below:

Today’s report will be on the lean side.  Other than the fact that Obama may very well be planning to “wag the dog” with a new, conveniently timed Middle East war, it has actually been a relatively quiet week.  No doubt, our friends at the NSA think otherwise (and spooks, please remember to not mix-up my file with that attorney that busted Robert “Baretta” Blake;  I’m the “dangerous” Eric Dubin and not the attorney that went after the dude with the bird on his head).

 

 

A funny thing happened after silver busted $22 last Friday: hedge funds, once again, signaled they think the risk-reward for further silver downside isn’t worth anteing up cold, hard cash.  We certainly saw an ideal setup for another wave of cartel selling going into the thinly traded Sunday evening hours, especially given that Chinese markets were on holiday.  There was a minor cartel attempt to set the table Sunday evening for hedge fund shorting through Monday.  But as Silver’s action proceeded throughout London trading hours, the well trained Pavlovian hedge fund dogs recognized they’d be getting no steak.  The bottom was set at just under $21.40 spot silver.

 

silver-spot-jun-10-2013

We’re pleased to be wrong about our fear that the cartel was going to once again make a serious effort to smash precious metals.  They didn’t act.  That’s telling.  It happens to fit with the general thesis we’ve had since the April 15th bottom.  The cartel faces considerable risk of unleashing a level of physical demand that could very well implode the shaky inventories of the Comex and LBMA should the cartel be ballsy enough to hammer prices much below current levels.  Bullion is flying off the shelfs in Asia, as is — check out these pictures ZeroHedge published this week:

Silver’s lightning bounce off $20.25 on May 20th, with a closing price north of $23 was another hedge fund “n  o mas” signal.

silver-May_20_2013

 

In sum, we have the Cartel thinking twice about “unintended consequences” while the hedge funds are wise to the fact that drool all they wish, there’s no steak dinner down at these silver price levels.  Silver’s sideways action continues, and we’re now back over $22 silver.  While we’ve experienced occasional blips below $22, this level has established a reasonably strong base and Friday’s short covering leap is just one more demonstration that downside from here on out is likely trivial.  It’s only a matter of time before fundamentals take over and we move higher.  Odds continue to favor an atypical summer of sideways to moderately higher  trending prices, with real fireworks taking place later this year.

With that, download this week’s show, load your iPod/mp3 player and head outside for some fresh air. — Eric Dubin

 

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