PMs Catch Fire

Adam Taggart
By Adam Taggart on Thu, Jun 19, 2014 - 1:55pm

So far, gold & silver are (finally!) having a monster day. Gold is up $41/oz, silver up $1/oz:

The WSJ attributes the leap as a reaction to Yellen surprising traders that the Fed will keep rates lower for longer than expected.

Zero Hedge sees the move as more due to the emerging China re-hypotecation scandal.

Can't wait to see what DaveFairTex makes of this in tonight's daily recap.

6 Comments

KugsCheese's picture
KugsCheese
Status: Diamond Member (Offline)
Joined: Jan 2 2010
Posts: 1428
Yup

Saw this news on the PP home page an hour ago.  When is the next attempted Gold slam, Monday?

That banks are allowed to naked short gold (after the problem in 2008) is outrageous, but there is set of rules for us and one for them.  They are the cancer and we are body.

jcat3022's picture
jcat3022
Status: Bronze Member (Offline)
Joined: May 9 2012
Posts: 78
any ideas why?

anybody want to speculate beyond ZeroHedge's piece - http://www.zerohedge.com/news/2014-06-19/silver-surges-3-month-highs-china-ponzi-unwinds

 

davefairtex's picture
davefairtex
Status: Diamond Member (Offline)
Joined: Sep 3 2008
Posts: 5066
news: its all bollocks

My opinion - as good as anyone else's:

Was it about news?  Total Bollocks.  Silver isn't a safe haven metal.  Not that I've ever seen.  And silver was the lead here, and has been for the past 3 weeks.

The fuse was lit by Managed Money who have been leaning short at historical levels, as in, Never This Short Ever In History.  And then the buying started three weeks ago, slow and steady, pushing silver higher, but never really fast enough to cause any major issues.  My guess: our friendly bankers were doing all the accumulating.

And today, once silver crossed the 20 level, the short covering fire started.  I saw the pop higher and thought, "ok, here we go...I wonder how high it will go today."  I did not think the answer would be 20.92, but then again, historical levels of short interest by Managed Money all covering at once is powerful fuel.

As for gold - well, silver drags gold higher - that's just what it does.  Notice that gold was performing quite poorly until just today.  But after silver rocketed higher, then the fire started in gold, which wasn't quite as heavily shorted, but still had quite enough fuel once the 1300 level was breached.

So that's my read.  This was a straight out transfer of wealth from Managed Money to our friendly banker group.  All done via silver.

You'll have to wait for the writeup though - I have to get some sleep now.  :-)

Wildlife Tracker's picture
Wildlife Tracker
Status: Gold Member (Offline)
Joined: Jan 14 2012
Posts: 403
price

Last Friday we crossed this line which has trended silver prices this low. If I were to guess... traders were reacting to this as well as an indication that we triple bottomed at $19.50ish

I did predict this would happen though. Maybe the world decided to give me a bone.

thc0655's picture
thc0655
Status: Diamond Member (Offline)
Joined: Apr 27 2010
Posts: 1513
A monster day

In my mind, a monster day would be up $500, and days like that are coming.  Like Rector, I expect a price slam down Fri or Mon.  If they can't pull that off, there may be real trouble brewing below the surface that is causing cracks we can see.

Oliveoilguy's picture
Oliveoilguy
Status: Platinum Member (Offline)
Joined: Jun 29 2012
Posts: 578
Cheers to all

Cheers to all who have held and added to positions during the downturn. It feels like the tide might have changed. 

If I believe anything in the economic world, it is that Gold and Silver are Money. If it gets smashed on Monday, so be it. 

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