Silver fell a very sharp 85 cents from $18.40 per ounce to as low as $17.65 per ounce yesterday. This resulted in a 4.25% price fall soon after the London bullion markets closed yesterday, despite no market news or corresponding sharp moves in other markets.
Silver had been performing very well in the first two months of this year, having surged 15% in price. In fact, there were 10 consecutive weeks of gradual gains.
It had made convincing closes above the psychological $18 an ounce level and the 200-day moving average (DMA) at 18.155 and made 3-month highs earlier yesterday.
The rising price had emboldened silver investors and dealers were seeing robust demand for bars and coins.
However, yesterday at about 16:30 GMT, just as the European markets were closing, someone, or some entity, dumped $2 billion worth of silver (paper) contracts into the futures market in a matter of minutes.
23,000 silver contracts, amounting to 1,150,000 ounces of silver were dumped onto the market.
|Over 23,000 Silver futures contracts suddenly puked into the market as soon as Europe closed…|
Silver quickly fell over 4% and much of its gains of the last month were wiped out.
Gold also fell $14.90 or 1.2% to $1235.00.
March 2nd was also the red-letter day when 1 Bitcoin was valued more highly than 1 ounce of gold!
Who Is Manipulating The Market?
One excuse for the sharp drop in silver’s price is rate hike expectations and the risks of a rate hike on March 15.
However, those expectations should already have been factored into the market and there were no major news events that would have triggered a 4% drop in price.
No announcements from the Federal Reserve either.
Aside from Bitcoin’s price rise and gold and silver’s price drops, there were no major moves in most markets.
It looks like some entity didn’t like silver’s rise in price and decided to smash it by manipulating the market.
Banks have been found guilty of manipulating most markets in recent years including the gold and silver markets. GATA have amassed a huge amount of evidence over the years and there were new revelations of silver fixing as recently as December.
It’s pure speculation, but probably not an unreasonable assumption, to suspect that the massive silver sell-off may again have been by a bank or a proxy hedge fund or some other institutional fund manipulating the silver market – either for private gain and trading profits or, indeed, on behalf of the official sector and central banks.
There is a mentality in banks and governments that banks are too big to fail. And banksters seem to assume that that gives them carte-blanche to manipulate markets as they see fit, to bolster their own coffers. And that they consider themselves above the law.
When they have been forced to admit that they have been acting illegally, they get a financial slap on the wrist, not punitive penalties and punishments, and there are never any prosecutions of institutions or individuals.
Occasionally, there’s a sacrificial lamb led to the slaughter – some “lone wolf” trader who’s found to take the blame while the top execs get off scott-free. And even in these cases, these patsys and scapegoats seldom do jail time.
A Silver Opportunity
If you already own silver, it can be disheartening when the price of silver drops, especially if it falls below the price you bought it for.
However, you should see the price drop as a buying opportunity. Silver is 4% cheaper than in was yesterday!
Both the price of gold and silver have been rising steadily in recent weeks. There’s every reason to expect that trend to continue in the long term..
We’ll likely see several more assaults on the price of these two precious metals as vested interests do what they can to keep their prices under control. But they’re running out of ammo and tricks. It’s only a matter of time before prices start surging again.
And when they do, you’ll be kicking yourself for not buying in the dip.
Here are some recommended companies you can buy silver from:
- Low Cost Bullion
- GoldBroker – buy gold and silver bullion
- Regal Assets – you can open an investment plan with them, rollover a 401k or open a retirement account with them. You can invest in gold and/or silver.
- BullionVault – I only recommend this if you’re going to buy at least $10,000 worth of silver as they charge storage fees that otherwise cut into the value of your holding.