Best of the Week
Most Popular
1. Ray Dalio: This Debt Cycle Will End Soon - John_Mauldin
2.Stock Market Dow Plunge Following Fake US - China Trade War Truce - Nadeem_Walayat
3.UK House Prices 2019 No Deal BrExit 30% Crash Warning! - Nadeem_Walayat
4.What the Oil Short-sellers and OPEC Don’t Know about Peak Shale - Andrew_Butter
5.Stock Market Crashed While the Yield Curve Inverted - Troy_Bombardia
6.More Late-cycle Signs for the Stock Market and What’s Next - Troy_Bombardia
7.US Economy Will Deteriorate Over Next Half Year. What this Means for Stocks - Troy_Bombardia
8.TICK TOCK, Counting Down to the Next Recession - James_Quinn
9.How Theresa May Put Britain on the Path Towards BrExit Civil War - Nadeem_Walayat
10.This Is the End of Trump’s Economic Sugar High - Patrick_Watson
Last 7 days
UK House Prices Momentum Forecast 2019 - 18th Dec 18
Will US Government Shutdown Cause The Stock Market To Crash? - 18th Dec 18
The Coming Financial Storm - 18th Dec 18
Jeff Gundlach thinks that a Stocks Bear Market has started. Is he Right? - 18th Dec 18
Gold’s Not An Investment – You Won’t Get Rich - 17th Dec 18
Stock Market At Medium-Term Lows, Which Direction is Next? - 17th Dec 18
This Stock Will Drive America’s 5G Buildout - 17th Dec 18
Stock Market Turn In The Tide - Have a Happy Bear Market! - 17th Dec 18
How A NASA Scientist Could Trigger The Next Cannabis Boom - 17th Dec 18
iShares Russell 2000 IWM Leading Stock Market Decline - 17th Dec 18
Where is the Dow Stock Market Santa Rally? - 17th Dec 18
With Weaker Climate Consensus, Expect Elevated Climate Change - 16th Dec 18
SMIGGLE Advent Calendar 2018 UK Contents - What You Get Look Inside Review - 16th Dec 18
Is there a Lump of Coal in Santa's Stock Market Bag? - 16th Dec 18
This Market Will Drive Gold in 2019… - 16th Dec 18
Gerald Celente:Central Banks Can’t Stop a 2019 Debt Disaster - 16th Dec 18
Gold Stocks Triple Breakout - 15th Dec 18
The stock market fails to rally each day. What’s next for stocks - 14th Dec 18
How Low Could the S&P 500 Go? - 14th Dec 18
An Industrial to Stock Trade: Is Boeing a BUY Here? - 14th Dec 18
Will the Arrest of Huawei Executive Derail Trade War Truce? - 14th Dec 18
Trump vs the Fed: Who Wins? - 13th Dec 18
Expect Gold & Silver to Pullback Before the Next Move Higher - 13th Dec 18
Dollar Index Trends, USDJPY Setting Up - 13th Dec 18
While The Stocks Bulls Fiddle With The 'Fundamentals,' Rome Burns - 13th Dec 18
The Historic Role of Silver - 13th Dec 18
Natural Gas Price Setup for a Big Move Lower - 13th Dec 18
How to Get 20% Off Morrisons Weekly Supermarket Shopping - 13th Dec 18
Gold Price Analysis: Closer To A Significant Monetary Event - 13th Dec 18
Where is the Stock Market Santa Claus Rally? - 12th Dec 18
Politics and Economics in Times of Crisis - 12th Dec 18
Owning Precious Metals in an IRA - 12th Dec 18
Ways to Improve the Value of Your Home - 12th Dec 18
Theresa May No Confidence Vote, Next Tory Leader Betting Market Analysis and Forecasts - 12th Dec 18
Gold & Global Financial Crisis Redux - 12th Dec 18
Wow Your Neighbours With the Best Christmas Projector Lights for Holidays 2018! - 12th Dec 18
Stock Market Topping Formation as Risks Rise Around the World - 11th Dec 18
The Amazing Story of Gold to Gold Stocks Ratios - 11th Dec 18
Stock Market Medium term Bullish, But Long Term Risk:Reward is Bearish - 11th Dec 18
Is a Deleveraging Event about to Unfold in the Stock Market? - 11th Dec 18
Making Money through Property Investment - 11th Dec 18
Brexit: What Will it Mean for Exchange Rates? - 11th Dec 18
United States Facing Climate Change Severe Water Stress - 10th Dec 18
Waiting for Gold Price to Erupt - 10th Dec 18
Stock Market Key Support Being Re-Tested - 10th Dec 18
May BrExit Deal Tory MP Votes Forecast, Betting Market Analysis - 10th Dec 18
Listen to What Gold is Telling You - 10th Dec 18
The Stock Market’s Long Term Outlook is Changing - 10th Dec 18
Palladium Shortages Expose Broken Futures Markets for Precious Metals - 9th Dec 18
Is an Inverted Yield Curve Bullish for Gold? - 9th Dec 18

Market Oracle FREE Newsletter

How You Could Make £2,850 Per Month

Battle for the Silver Market on December Expiration

Commodities / Gold and Silver 2010 Nov 18, 2010 - 12:13 PM GMT

By: Dr_Jeff_Lewis

Commodities

There's a war waging for the silver market, and the war will soon break out over the course of the next week.  Each month, as options and futures in the silver markets reach expiration, the bankers, investors and world interests plow into the market with shorts, pushing prices down and stymieing the total amount of delivery off the exchange.


This month, though, is of much greater interest for two simple reasons.  First, those who have an interest in maintaining the paper silver trade cannot allow silver futures orders to be redeemed, either due to the fact that not enough silver is stored at the COMEX vaults or because they cannot allow the world to see how much real silver interest exists.

If the world were to see armored truck after armored truck pull into storage to pick up millions in metals, the pictures would spread faster than the tragedy at Tiananmen Square.  Whole nations would shove even more money into metals, and prices would climb even higher.  Investors would demand even more physical delivery of silver that probably doesn't even exist.  They simply can't allow these scenarios to happen after the highly debated second round of quantitative easing.

However, most importantly, if the silver is not there, those who are massively short and behind the scheme cannot allow so many different contracts to be exercised all at the same time.  Since last expiration, silver is up modestly at 10% in one month, but at one time was up nearly 25%, putting hundreds of thousands more ounces in futures contracts in the money.  In the money contracts, after all, have to be exercised by someone to lock in profits.

The War is On

Going into next week, the recent downtrend from $29 to $23 will persist until the metal masters not only push silver back to parity with last month's value, but into negative territory as they seek to exercise damage control on a market that has already become wise to their games.

We know already that these institutions were massively short all the way from the early 2000s when silver traded under $5 per ounce.  Today, they're still holding massive paper losses on their short positions, and unfortunately (for them), they are caught between a rock and a hard place.  They could, after all, bid to cover (as they have been in the first two weeks of the run up) and allow silver to surge into the $30s, but they would risk a total shakedown when the COMEX fails to deliver enough silver.  Or they could continue to chase bad money with good money, pushing down prices just before expiration and keeping the system alive.  Based on history, it's pretty clear which side they'll land.

Take the Buying Opportunity

The week before options expiration has been, for a long time, an excellent time to add to your positions.  While the powers that reside behind the curtains at the all-paper futures exchanges pile on their shorts to prevent collapse of the system, precious metals investors have artificially low prices from which to add to their position.

Don't let a crisis go to waste.  As the bankers panic to keep the system in check, you're going to get an excellent buying opportunity.  Never miss a buying opportunity in a bull market.

By Dr. Jeff Lewis

    Dr. Jeffrey Lewis, in addition to running a busy medical practice, is the editor of Silver-Coin-Investor.com and Hard-Money-Newsletter-Review.com

    Copyright © 2010 Dr. Jeff Lewis- All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2018 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Comments

Len Aaron
23 Nov 10, 16:04
CRASH JP MORGAN: BUY SILVER

The masses of sheeple on the planet are awakening to the historic monolithic paper ponzi scheme called the US Dollar (Bernie Buck$), as well as the prudence of buying Physical Silver and taking delivery, rather than trust in bank custodians, the likes of JP Morgan, which holds the largest illegal naked short position in the world to manipulate paper prices of silver downward. Game's up.

Judgment Day for the Banksters around December 21, 2010??

Great Article!!!


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules