With silver smashed to a new bear low breaking long term support at $18/oz Friday, Alasdair Macleod joined the show to break down the trading action in precious metals, discussing:
- Friday’s silver slaughter- is the bottom finally in, or are we looking at a silver bloodbath on the Globex open Sunday night and a drop to $15?
- SGE international gold trading platform goes live- Alasdair discusses the long term implications, stating that the Gold market is being wrested from the West
- September COMEX silver futures set to break new all-time volume record, shattering May 2013’s previous record- Alasdair’s explanation for record volumes in Sept COMEX silver may surprise you
- Physical silver demand EXPLODES as SDBullion records highest single day sales total ever Friday, & physical silver shortages return to US wholesale & retail markets- is a silver premium spike next? (Industry contacts warn the answer is YES)
- A classic example of Madness of the Crowds: Alibaba US IPO overtakes Walmart market cap- legendary gold trader Jim Sinclair on why Friday “is a day that should be memorized“
The SD Weekly Metals & Markets With The Doc, Eric Dubin, & Alasdair Macleod is below:
Alibaba and the Goldman Thieves – Banzai7
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While licking my wounds from this week’s renewed precious metals sector selling, I got to thinking how odd it was that mainstream media coverage of PM sector carnage appears to have been minimal compared to previous periods of downside carnage. Whatever happened to kicking the sector when it’s down? Oddly enough, even interest in the subject of manipulation appears to have hit rock bottom.
“Gold manipulation” as a Google search term has seldom seen less action. This is a story of the dog that didn’t bark. You’d think that given the fresh lows for the cycle, there would be a bit more talk about manipulation. When sentiment sucks in normal markets, bottoms are established. Trouble is, the manipulation lockdown has been so successful that even the desire to learn about manipulation is in a bear market.
Spot silver closed at $17.84, falling below last June’s low of $18.17. The only thing “positive” about silver’s technical picture is the fact that it’s massively over-sold. Odds are, we’ll see a bounce next week. But oversold status will not save the metal by itself. Just look at how RSI kept registering extreme lows last year before bottoming in June.
We’re now trading at below the cost of silver production for nearly all producers other than byproduct production of gold and base metals mining companies. If there’s one forecast we can make with a great deal of confidence it’s that the current state of affairs can’t continue indefinitely and that we are not in the middle of a long-term bear market for silver. Hardly. But that’s meager consolation after a week like this week.
Among the questions we put to Alasdair Macleod, we asked what’s his take on the record COMEX open interest in silver, which is highly unusual given the price decline and exact opposite the open interest trend with gold. Alasdair believes the prime actors are industrial buyers locking in supply. That’s as good of an explanation as any, but I’m sticking with my “all of the above” explanation because the near- and intermediate-term rollover of long contracts we’re seeing isn’t the sort of positioning one would expect from industrial buyers. That’s the pattern of deep pocket long-term speculators rolling their positions.
Tune into the show for Alasdair’s overall take on the sector.
Shanghai Gold Exchange
The SGE launched yuan-denominated international trading Thursday evening, well over a week before the previously announced launch date. It’s not clear why the timetable was moved up, but one does have to wonder if the latest PM sector raid was timed as a welcoming gift to the SGE.
Over time, the SGE will become the price setting market, but it’s very unlikely the market will have a major impact anytime soon. China seeks to advance the power and importance of the yuan and her financial markets overall. But she’s made a deal with the devil by necessity. The banks granted permission to access the new SGE international market read like a list of who’s who within the gold cartel. For the time being, there’s no way around that. Also, for the time being, it remains in China’s interest to let the cartel continue doing what it does best: enabling China to continue to accumulate discounted gold.
Ukraine: Period of calm?
Friday afternoon it was announced that a nine-point memorandum of understanding has been signed by Kiev and Eastern Ukrainian self-defense forces. Two weeks ago it became clear that Kiev’s forces were suddenly on the defensive. Furthermore, as winter approaches, odds have been increasing that Russia would use Europe-bound natural gas as a weapon. These dynamics are linked.
The CDC is preparing a worst-case-scenario report and it’s reported that they’re looking at infections rising to about half a million people, primarily in Africa. Click here for more information.
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To our listeners worldwide, have a wonderful weekend! A bit of down time after this week’s trading is much deserved. — Eric Dubin