The collapse in gold and silver prices and the shares of mining companies this week brought losses of hundreds of billions to existing holders as the value of all the gold in the world dropped by $800 billion. Investors in precious metals took it on the chin, but why? From everything I can see, the main reason for the precious metals collapse was that the commercials [big banks] rigged prices lower so that they could buy and exit their short positions.
From this past June onward, I have been monitoring the financial scorecard of the 7 big COMEX commercial shorts in gold and silver futures. As of March 13th, their open and unrealized losses grew to $7.2 billion, by far the most in history. The plunge in prices this week reduced those losses by $5 billion to $2.2 billion, a reduction of 70%. You can believe these traders (along with JPMorgan) just got lucky or that they played an active role in causing the hundreds of billions of dollars lost by those holding metals and mining shares. That’s the trouble with manipulation – the many suffer at the hands of the few.
The CFTC and Justice Department should be ashamed of themselves for allowing this week’s easy-to-prove manipulation of gold and silver prices. For cryin’ out loud, there is supposedly an active, full-blown investigation into precious metals manipulation centered on JPMorgan and the crooks on the COMEX pull off perhaps the most blatant manipulation ever. How is it possible for the CFTC and DOJ to be more inept? Shame on them.
All along I’ve insisted that in the event of a massive selloff, it would be the last such selloff and there would be no aggressive short selling on the next rally. The big shorts will likely not put their head in the lion’s mouth again. In the meantime, silver is at an unbelievable bargain price and it’s hard for me to imagine how prices won’t be substantially higher in a short time.
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