Yesterday’s action in metals culminates the worst two weeks of price declines that I have experienced in nearly forty years. The “support level” of $1550.00 in gold simply melted away by over $200.00 in that period and was followed by silver and the platinum group as well.
We now have prices at 2010 levels, and officially, we’re in a bear market. Anyone witnessing the activity in our office today wouldn’t think that, though, as buyers outnumbered sellers by 20 to 1. Are our clients in the physical market more astute than the paper investors on Wall Street who sold off huge amounts of ETFs?
This giant selloff is not a free-market phenomenon, where excess supply far exceeds demand. On the contrary, physical silver is simply unavailable. The US Mint estimates Silver Eagles can’t be delivered until July. Our suppliers won’t take orders. No Maples Leaves, rounds, bars or bags either.
Gold, however, is available for immediate delivery, at the moment. For those people who have been on the sidelines and felt that they missed the train, this is your chance to buy gold ON SALE, courtesy of the money center banks and commodity speculators. Paper sales, or futures contracts, were sold in large volumes into a thin market with the intention of driving down the price of gold. Goldman Sachs recommended this strategy two weeks ago at $1550 an ounce.
Right now, the US dollar appears to be strong in relation to other currencies even though it is being created in massive quantities.
I won’t predict how long this conundrum will last, only that it won’t.