In Ted Butler's Archive


Given the still spectacularly bullish market structure that exists in both COMEX gold and silver my recent thoughts have been dominated by what type of price rally we are likely to see, once the moving averages in both gold and silver are penetrated to the upside. Those averages are still $1.50 or more above current silver prices, but only $50 or less above the two remaining moving averages in gold. Since we know the moving averages will be upwardly penetrated in time, the question centers on whether the coming rally will be of the $200 to $250 variety typical in gold and $4 or $5 rally in silver, or much more? The magnitude of the rally we will see is completely dependent on how aggressive the largest commercial short-sellers are in reaction to the managed money buying. More times than I care to recall at similar junctures in the past, I have always suspected the commercials would stand aside and let prices rip higher. Every single time, however, the big commercials loaded up on the short side on the rallies and we never got the “big one” I expected in silver.

It’s hard to be satisfied, after waiting for decades, with taking a few dollars profit in silver and missing out on a move many, many times greater. Fortunately, no one has to make such a distinction at this moment, as the move up has yet to take hold. But once the coming up move does commence, it should quickly become apparent whether it will be the same old type of rally that the big commercials snuff out with manipulative short sales. Based on the low volume recently, there is no evidence of this commercial short-selling getting started. So far, so good.

If ever there has been a time when the shackles should be cast off the price of silver, that time is now. Think of all the truly significant changes that have occurred leading up to this moment. JPMorgan and friends and family have accumulated physical silver for the better part of a decade and completely removed themselves from the short side. Silver stands out as being the cheapest of all commodities. That’s in the face of nothing but ultra-bullish developments, including being the only commodity to have experienced its own grassroots movement on Reddit.  We are sure to get a rally of a few dollars soon. Current circumstances indicate the chance is now much greater that the commercial shorts will stand aside on the next rally, automatically converting any move into the big move. Silver would likely double or triple its current price should the 4 big COMEX commercial shorts not add aggressively to short positions. Silver prices could move higher and faster than any of us fully recognize.

Finally, there is the not small matter of there being 4 new commissioners on the CFTC, all with not much more than two full months on the job and by all appearances extremely interested in regulatory matters and in doing the right thing. I base this on all of their public statements since being in office. None of these women seems interested in abiding by past regulatory failures in silver at the expense of preserving an old agency line and depriving the public of what it was they swore to uphold. This is a wild card in a poker game about to get very interesting.

For subscription info please go to

Start typing and press Enter to search