studdy05

Silver Could Explode, Says Analyst

Banks shorting does not explain the lack of silver at the retail level.

Shorting is bet that the price will go down.

The author now says they have covered, yet silver continues to collapse alongside gold at spot prices. Covering should have had a long and consistant price raising effect that was not seen.

A more plausible scenario is this: Commodity hedge funds are blowing up, selling down the contracts at cheap prices due to liquidation or redemptions. This momentary push down is reflected in the current price discoveries. (A push down in prices on paper only.)

All the while, physical holders of the metals have hunkered down supplies because of the banking instability. Metal holders are often a distrusting bunch by nature, and banks teetering would tend to exacerbate this syndrome. (And for good reason.)

This fully explains the disconnect. And one or the other has to give.

Taken to another level, consider AUY. Yamana gold stock is trading at an all time low, while production of silver and gold is increasing rapidly. Contracts at COMEX are still historically high, so the stock should be rolling.

The disconnect between stock prices, spot prices, and physical has reached levels during this panic that can not be explained other than that the system appears to be heavily stressed by a number of extrodinary factors. It is too simple to say it is market manipulation by banks.

Postions: Long AUY, long silver bullion