Inflation Reemerging: Food Prices Gapping Higher, Precious Metals May Follow

Gold & Silver Price Subject To Greediness Of Traders

Short covering, triggered by rumours of a potential US downgrade from Moody’s, are sending gold and silver prices vertical. The move higher comes after a very suspicious spike this night in which the silver price was pushed 10% lower within the first hour of Asian trading (with a bank holiday in Europe). The charts show the price action in today’s trading sessions. In our own words: folly of the highest degree, or the metals being subject to greediness of traders.

Silver Price Recovers From Its Flash Crash

The silver price has recovered most of its losses of Asian trading. For now, we believe that the downward pressure on the metals prices has reached a point where a bounce (at least a temporary one) is imminent. Too many technical traders are in the bearish camp. Meantime, the commercials have positioned themselves increasingly long. It seems that they are ready to extend their profits on a rally, after their gigantic profits during the crash mid-April. The ferocity of a potential short covering should be the main theme at the desk of the commercials right now.

Gold: Motive, Means & Opportunity

Gold and silver are in long term bull markets. One of the objects of a bull market is to arrive at the peak with very few long term participants. The “bull” wants to buck you off periodically. It usually happens. Basic human nature – fear and greed – makes it difficult to ride the bull most of the way up and exit at the proper time. Fortunately for gold and silver bulls, there are many more years of deficit spending and increasing debt that will push metals prices much higher.

Silver Price Down 7% Right After Asian Opening

At the time of writing, it is midnight GMT (London) / 7 PM EST (New York) / 8 AM in Tokyo. The Asian market opened less than an hour ago. Large parts of Europe have a bank holiday today. So that means very thin trading. What happens? Really seconds after opening of Asian trading silver falls down from $22.3 to $20.8 in a matter of minutes.