Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
Exponential AI Stocks Mega-trend - 17th Jan 22
THE NEXT BITCOIN - 17th Jan 22
Gold Price Predictions for 2022 - 17th Jan 22
How Do Debt Relief Services Work To Reduce The Amount You Owe? - 17th Jan 22
RIVIAN IPO Illustrates We are in the Mother of all Stock Market Bubbles - 16th Jan 22
All Market Eyes on Copper - 16th Jan 22
The US Dollar Had a Slip-Up, but Gold Turned a Blind Eye to It - 16th Jan 22
A Stock Market Top for the Ages - 16th Jan 22
FREETRADE - Stock Investing Platform, the Good, Bad and Ugly Review, Free Shares, Cancelled Orders - 15th Jan 22
WD 14tb My Book External Drive Unboxing, Testing and Benchmark Performance Amazon Buy Review - 15th Jan 22
Toyland Ferris Wheel Birthday Fun at Gulliver's Rother Valley UK Theme Park 2022 - 15th Jan 22
What You Should Know About a TailoredPay High Risk Merchant Account - 15th Jan 22
Best Metaverse Tech Stocks Investing for 2022 and Beyond - 14th Jan 22
Gold Price Lagging Inflation - 14th Jan 22
Get Your Startup Idea Up And Running With These 7 Tips - 14th Jan 22
What Happens When Your Flight Gets Cancelled in the UK? - 14th Jan 22
How to Profit from 2022’s Biggest Trend Reversal - 11th Jan 22
Stock Market Sentiment Speaks: Are We Ready To Drop To 4400SPX? - 11th Jan 22
What's the Role of an Affiliate Marketer? - 11th Jan 22
Essential Things To Know Before You Set Up A Limited Liability Company - 11th Jan 22
Fiscal and Monetary Cliffs Have Arrived - 10th Jan 22
The Meteoric Rise of Investing in Trading Cards - 10th Jan 22
IBM The REAL Quantum Metaverse STOCK! - 9th Jan 22
WARNING Failing NVME2 M2 SSD Drives Can Prevent Systems From Booting - Corsair MP600 - 9th Jan 22
The Fed’s inflated cake and a ‘quant’ of history - 9th Jan 22
NVME M2 SSD FAILURE WARNING Signs - Corsair MP600 1tb Drive - 9th Jan 22
Meadowhall Sheffield Christmas Lights 2021 Shopping - Before the Switch on - 9th Jan 22
How Does Insurance Work In Europe? Find Out Here - 9th Jan 22
Effect of Deflation On The Gold Price - 7th Jan 22
Stock Market 2022 Requires Different Strategies For Traders/Investors - 7th Jan 22
Old Man Winter Will Stimulate Natural Gas and Heating Oil Demand - 7th Jan 22
Is The Lazy Stock Market Bull Strategy Worth Considering? - 7th Jan 22
What Elliott Waves Show for Asia Pacific Stock and Financial Markets 2022 - 6th Jan 2022
Why You Should Register Your Company - 6th Jan 2022
4 Ways to Invest in Silver for 2022 - 6th Jan 2022
UNITY (U) - Metaverse Stock Analysis Investing for 2022 and Beyond - 5th Jan 2022
Stock Market Staving Off Risk-Off - 5th Jan 2022
Gold and Silver Still Hungover After New Year’s Eve - 5th Jan 2022
S&P 500 In an Uncharted Territory, But Is Sky the Limit? - 5th Jan 2022

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Are Silver Prices Set Up for Another Heartbreak?

Commodities / Gold and Silver 2014 May 16, 2014 - 12:35 PM GMT

By: Dr_Jeff_Lewis


For long term investors and precious metals observers, the range-bound price action has rubbed salt into the open wound of short price sentiment. That is, if there is anyone left to remember the move up to $50 in 2011.

How long prices can remain relatively quiet and range-bound (in the face of growing fundamentals, geopolitical tension, and the rising awareness of inflation) is anyone's guess.

Restlessness is developing, perhaps correlated with the volatility and commingled with hope over news of the ending the "London Fixing".

Due to trading positions and willingness to overtly manipulate the market, combined with upcoming geopolitical tensions, it might be best to expect a move down over the short term.

Price Discovery

Price discovery is the main culprit. As long as positions held at COMEX remain dominated and concentrated, nothing is real and the darker mechanism out of London means very little.

It's not difficult to envision JPM, et al., walking unsuspecting weak-handed longs and seeking natural safety into this market in order to sheer them out of position and buy the HFT-induced dips. Producer prices surprised the market to the upside, while the BLS has just "discovered" food inflation.

Professional traders can play this game and come out as winners because they are nimble enough and can turn on a dime. But as weak (paper) hands play into the game, their losses will probably become the big bank's gains. This is the script.

In addition to range bound restlessness, traders are looking now toward volatility to gauge the next move.

Low Volatility

Forbes recently published:

"Just last week (silver) prices slipped to $18.685, the lowest level since mid-July on a continuation chart and a four-year low for a July futures contract. Prices rebounded, following the bounce in gold prices.

30-day silver options volatility is around 12% as of Tuesday’s close, coming just off a 10-year low made during last week’s price drop.

The last time silver volatility fell to the mid-teens was last year, just before silver prices broke in April 2013 and then in late 2010, ahead of the 2011 spike to record highs.

Comparatively, silver’s volatility is usually around 30%.

Volatility is always mean-reverting, so when volatility is that low, it’s ready for a big move, according the (obscure) source quoted."

Volatility is all about where the big banks want the price and perception to be in the short term.

Again, (viewed from the perspective of specs who are ultimately at the mercy of the big shorts), they can be harvested - they will be, independent of prices.

Having such low volatility is unusual for silver, and one analyst said it’s a situation that’s unlikely to last.

Does this mean anything more than an after-effect of what happens when each and every rally is stifled? When a range-bound channel works well for those seeking a profit, picking up nickels in a steamroller - and those who would rather not see the price move too far too fast?

Users are happy - and by proxy. And it works out for monetary policymakers, most who probably don't think or concern themselves with the metals.

Bernanke's answer to Ron Paul's question in 2012 said it all. His answer that gold was not money was probably less of an outright lie than an example of how far off the radar we've gone.

One must not forget is that the manipulation of gold and silver has been achieved by legal mechanisms. It's the equivalent of allowing a semi truck to drive through a regulatory loophole. Ultimately, by distorting fundamental expression (as well as cultural wealth expression) for so long, the resultant risk builds tremendous fuels for whichever ransom spark eventually ignites the fire.

What Fundamentals?

Here are few developments on top of the more obvious ones. For example, above ground investment grade silver amounts to less than one fifth the supply of gold, yet the price is inverse - to the tune of 65 to 1. Or that most silver used by industry is delivered just in time and, therefore, demand is totally underestimated. Or that silver is the only commodity that makes inflation adjusted high seem like some bizarre phenomenon.

A few others:

  • Silver is more oversold now than anytime in the last 28 years.
  • Silver eagle and silver maple leaf coins are selling at a record rate this year.
  • Indian silver import in 2013 was 6125 t, an all-time record, up 189 % from 2115 t in 2012.
  • Over 42% of the silver at the Shanghai Futures Exchange has been removed since the end of February.

With regard to investing alternatives, let us be reminded that there are always a thousand reasons to buy at the top; and a thousand reasons to sell at the bottom.

Most have a clear choice between buying into a conventional stock market, making all time high after all time high. Or buying an asset like silver that is off over 60% from its highs and 100's of percentage points from conservative inflation-adjusted highs. Markets (even rigged ones), contrary to what many are saying, do not fall forever.

What Do You Think?

Any thoughts about this? Share it!
(Note: If you have specific question for me, please contact me through the Free E-Course - thanks!)

For more articles like this, and/or for a breath of fresh silver market reality amidst the stench of denial and technically meaningless short term price obsessed madness, check out

By Dr. Jeff Lewis

    Dr. Jeffrey Lewis, in addition to running a busy medical practice, is the editor of

    Copyright © 2014 Dr. Jeff Lewis- All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Dr. Jeff Lewis Archive

© 2005-2019 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in