Silver as an investment

Confusion Reigns… / Michael J. Ballanger / 4/19/17

A few days ago, I postulated that despite the seasonal weakness most were anticipating in May and despite the sharp increase in Commercial shorting that was still below 2016 levels, the precious metals would buck conventional wisdom and advance further into even greater degrees of overbought status.

On Tuesday morning, after watching 22,000 contracts in June Gold completely wipe out every bid down to $1,280.60, causing a sympathetic crash in silver down to $18.06, I was not only ready to break out the infamous Louisville Slugger, but also my wonderful dog Fido went screaming out of the house in obvious expectation of the arrival of an MJB tirade and temper tantrum. Actually, Fido was well guided in assuming a Ballangerian response to the blatant intervention of the bullion banks, which was almost a “given” after the pre-Good-Friday COT report that showed the Commercials now at the highest aggregate short position in gold for 2017 and one of the highest ever in aggregate silver shorts EVER.

The Cartel cretins waited until all of the technical funds were “in” after chasing the gold “breakout” above $1,260 and a similar silver “breakout” above $18.50 until they sensed the slightest hint of weakness at which point they descended upon the Crimex trading pits like sharks in a frenzy. However, despite the pounding, gold battled back into the green and was back above $1,290, while the silver market was still reeling down 1% on the day. That was Tuesday. . .

And again today. . .

The big news lately is how awfully the junior miners are acting now that Van Eck (creators of the GDXJ [VanEck Vectors Junior Gold Miners ETF]) has been forced to stop buying junior gold stocks. You wonder why the juniors are now in a completely bifurcated market and all you need do is look at the names in the GDXJ that are considered the “anointed ones,” while everyone else aspires to be lest they wind up as “orphans” (housed and fed but without sponsorship) or the “zombies” (no food, no shelter, reviled by all). The bankers created the ETFs to capture market share but more importantly, they created ETFs to capture FEES and to corner the bid-ask spreads that allow them to take a haircut on every ETF transaction that occurs.


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