Metals Update

As you probably know silver was raided by the banks on Thursday and then recovered all its losses on Friday. I have been going through the net to find out what happened but still don't know for sure. There are theories out there about JPM & HSBC and smaller players they control did the raid to scare out the new comers and weak hands. They have billions in funny money to play their games and this manipulation will continue. Frankly while this was happening I did have to reach for a depends (the pad, Full Disclosure), and a sub-lingual nitro, not kidding, that was scary.

The other theory is that the longs had enough and were rolling over, or that cash settlements occurred. in any case on Friday we saw a decline in OI by 4952 contracts to 136,560 from 141,512. Although it is clear that the target of the raid was silver, this was a big drop in the OI in Silver.

So why then is Silver will holding up, you washed out the weak hands, amazingly physical buyers just piled right the very next chance they could. Makes me think that some cash settlements occurred on Thursday. This would be risky to the banksters because the guys that settled could come into the market by buying a March contract.

 Maybe that is why the open interest declined by such a wide margin versus gold who endured the same raid.

Of course, all eyes were focused on the front March contract. The open interest for March declined from 28,275 to 14,259 pretty close to what I thought. My guess is that the OI for Monday will turn out to be around 8000 or 40 million oz. Let us wait and see.

The estimated volume on Friday was a huge 102,404 contracts. The confirmed volume on Thursday was a monstrous 140,409. Totally unbelievable. In oz this represents 700 million oz of silver or 1 years annual production if you include China production or 115% of annual production ex China. 

Gold: Gold has been stable has had a nice bounce of the 150dma and is on a steady climb to 1520's, despite a long and steady assault by the paper shorts on gold, they cannot keep it down. Gold maybe setting up for a coiled spring like move once the pressure is reduced.

And I do have to remind my self when my a$% is being handed to me by JPM et al, that nothing has improved in the world since this move in metals started in fact things are much worse politically and economically, and there is no end to the money printing in Europe, US, and Japan. Bottom line the Macro picture is much worse. The secular bull market in metals is alive and well!!!