Silver Squeeze Underway?

The populist movement to punish Wall Street is turning its focus to silver. The markets may finally force more honest price discovery. That would certainly be welcomed by metals investors long frustrated by concerns about price suppression.

Silver prices are pushed around by a handful of the world’s largest banks. The captured regulators and the Department of Justice (For the Well Connected) have done little to curb the cheating, despite piles of evidence.

The bullion banks, with their friends in government, seem to get away with coordinated take-downs of speculative longs who are daring enough to buy futures contracts or options.

It helped that the precious metals sector was ignored by a large portion of the investing public and that most people were inclined to believe exchanges, like the COMEX, are under proper oversight.

That has changed a lot, especially in the past year.

The 7.5 million members of the Reddit board Wall Street Bets are part of an honest money/anti-Wall Street movement which is building steam.

Last spring, investors bought record amounts of physical bullion. Sales of coins, rounds, and bars accelerated again in January. Demand went parabolic last Thursday when the call to buy silver began to go viral.

The movement, should it succeed, would create true price discovery for silver... The bullion bankers have capped prices by selling hundreds of ounces of paper silver for every ounce they have in physical bar form. About 8 firms, including some of the world’s largest banks, have a leveraged short position representing more than 400 million ounces.

They may be unable to deliver anywhere near that quantity if contract holders start demanding the metal. The idea is to force them to buy physical bars to meet delivery obligations. At that point, the jig is up.

However, it is critical that investors not try to beat the bullion bankers at their own game. People joining this movement should buy physical metal only and avoid futures or other derivatives purporting to represent silver.

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Disclaimer: Money Metals Exchange and its staff do not act as personal investment advisors. Nor do we advise about or advocate the purchase or sale of any regulated security, listed on any ...

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