Is the Silver Bloodbath Over?

After 17 Relentless Days of Pounding, is the Gold and Silver Bloodbath FINALLY Over?

 

 

After a relentless 17 day pounding, gold and silver prices have finally stabilized, and are set to place their first positive days in nearly 3 weeks.  

Gold, which traded as low as $1215 on Tuesday is up $5 back above $1220, and silver is up nearly 20 cents from yesterday’s lows at $16.25.  

Also encouraging, the HUI mining index is up nearly 5 points on the day, and is riding uptrend support as well as its 100-week moving average. 

While today’s action is certainly encouraging, the metals were due for a dead cat bounce if nothing else after 17 days of selling.  We certainly have not had a short covering snap-back rally usually seen after such a drastic decline, so it may be early to call a final bottom.

We would like to see gold back over $1250 and silver back over $17 to be certain that the cartel is finished with their business.

The dramatic decline has re-ignited physical demand in the US which had been decimated throughout the first quarter, with both the US and Perth Mints reporting essentially the worst month of silver bullion sales in a decade in April. 

SD Bullion has been flooded with orders primarily for silver bullion, with customers taking down nearly 200,000 oz since early last week when the sell-off intensified. 

This spike in physical demand has dramatically drawn down wholesale inventory stock piles, but we expect we would need to see 4-8 weeks of sustained demand at these levels to draw down physical silver inventories at the mints to anything even hinting of a shortage situation due to the anemic demand throughout Q1. 

As always, we will keep readers and listeners advised of the outlook in the days and weeks ahead.