The recent gold and silver price takedown and the related negativity in the mainstream press were a reason for thorough investigation. The article “Noise vs Facts” on Gold Silver Worlds was intended to focus on the real facts. Investors should not be mislead by interpretations. More in-depth analysis is required to truly understand what is going on primarily in the futures market. With his extensive background and knowledge we trust on Ted Butler’s COT analysis (which is at the core of the short term price setting). He wrote the following paragraphs to his paid subscribers on Saturday February 16th. His insights reveal a different picture than the one on the surface – for sure the one that was created by the mainstream media – so we are more than happy to share it with our readers.
The good news is that the deliberate price smash appears to have fulfilled its objective, namely, to allow the commercials to buy great quantities of COMEX gold and silver contracts. When the commercials buy all they can shake from the tree, a price bottom is formed. The bad news is the blatant nature of the deliberate price smash, which confirms that a market manipulation exists for which a specific federal agency was expressly created to prevent.
Whereas gold’s COT structure in undeniably bullish on historical measurements, silver is a long way from what would be considered flat-out bullish (as is the case in gold). There is a single factor underlying this difference – JPMorgan.
Back in the summer of 2012 and in December 2011, there was a strong feeling among many that JPMorgan might be able to completely eliminate its short position (then between 12 to 14,000 contracts) on lower prices. Instead, we rallied and on both occasions JPMorgan added aggressively to its concentrated short position. Today, JPMorgan’s short silver position is at least double the former low levels (if they reduced it as much as I think in the past three days). That’s a radically different setup, so much so that I would label it as the key factor in silver and gold at this point. Certainly, I hope everyone realizes that what I am saying is that the silver manipulation is more intense at this point, because of JPMorgan, than it ever was. That more observers than ever seem to see this (except for the see, hear and speak no evil monkeys at the CFTC, CME and JPM) is important beyond belief.
Ted butler pointed to the fact that the same institutions that cause large volume selling are buyers on those big down days. Mind that trading game.
We encourage readers to subscribe to Ted Butler’s excellent service on Butler Research for detailed analysis on the gold and silver price decline and the prospects of the metals (short, mid and long term).