We witnessed an extremely dubious event in the silver market on Friday October 5th. In fact, we were not in front of the computer screen at that very moment, but SilverDoctors brought it to the world’s attention. The silver price was hit very hard and lost more than 3% in a matter of 5 minutes, on very high volume (not visible in below chart but you can see it on the SilverDoctors website). It appears that the selling volume equaled 1.5 times the annual US silver production.
What’s more, on the silver spot price chart on Kitco’s website, the “flash crash” was initially visible on the chart but then “magically” disappeared. Below are the screenshots ”before and after” (courtesy of SilverDoctors).
Suspicious? Manipulative? Both? Worse than that? It’s up to you to draw a conclusion.
This is what SilverDoctors had to say: “In an attempt to flash-smash silver and prevent a weekly close above the critical $35 level, the cartel dumped an estimated 51 million ounces of paper silver on the futures market in only 5 minutes … Apparently the t 1/2 of silver market intervention of a year and a half’s worth of paper supply is now approximately 30 minutes as silver has retraced the entire smash, and is trading back at $35/oz.”
Indeed, the silver price quickly rebounded and close the trading session with a mere loss of 1.3%. It looks like there are lots of buyers in the market at those price levels. Although the resistance at $35 is very strong, support could be maybe even stronger.