Here’s a well written argument for $50 an oz. silver, take time to read this over the weekend.
In the last week, two significant factors must be mentioned, each important in its own right. Last week, both factors were overrun by the silver market as new highs were established in the silver price. Options expiration for silver futures contracts usually brings about a huge ambush by the usual suspects, the Big US Banks, who sell vast additional futures contracts without posting any collateral. Mere mortals are prohibited from such naked shorts! Usually the imminent options expiration date results in a significant sudden swoon in the silver price, at least in the futures market, the so-called but increasingly absurd price discovery arena. This past week, the silver price zoomed toward $34/oz despite the threat of ambush, in total defiance to the options expiration deadline. Also, the COMEX in their height of wisdom and market rig efforts decided to raise the margin requirements for silver, for the umpteenth time since last summer. Usually such a margin hike results in a significant price drop like a wind sheer to an commercial jet aircraft. This past week, the silver price zoomed toward $34/oz despite the threat of margin ambush, in total defiance to the greater hardship to maintain margin. It is unusual to see a silver price advance in the face of one such factor. But it rose with gusto in the face of two important obstacles. My forecast in the last few months has been steady, that silver would lead the precious metals. That has been confirmed. While silver raced past $30 and $31 with ease, Gold has yet to confirm the breakout beyond the January highs. All in time.
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