Friday, September 23, 2011

Silver's September Hard Fall (UPDATED)

On a day when the stock market has (momentarily) stopped hemorrhaging, the spot paper price of Silver and Gold continue to plunge.

As of 12:30pm PDT Silver is down another $5.26 per ounce for the day and is down about $10.00 per ounce this week.

We will have more on this in the days ahead (particularly as the Commitment of Trader's Report comes out reporting this weeks commercial shorts). Obviously there has been no change in fundamentals, so there's more to this than immediately meets the eye.

There are also a lot of traders who are forced to sell Gold/Silver to meet margin calls in order to cover other losses.  This will play a substantial role in the nosedives today as  a big sell-off in stocks is historically followed by a sell-off in Gold/Silver the next day.

For now let's focus on the sale of PHYSICAL Silver.

Last week if you wanted to buy a one-ounce Silver Maple Leaf from Scotiabank you would pay about a $3.80 premium over the spot price.

Today, as Silver sits at a spot price of $30.58, the premium has skyrocketed to about $5.50 over spot.(click on images to enlarge).

It's reminiscent of 2008 when the spot price dropped to $9 per ounce and you couldn't buy a Maple Leaf for under $15.

The manipulated paper price has dropped, but those who own physical Silver simply aren't willing to part with their Silver at anything close to that spot price. 


Ahhh... you just knew something was behind the illogical massive sell off today. Just as was done at the end of April, the CME used the market collapse (which when everyone is selling, clearly there is irrational speculation going not - NOT!!!) to smack down the metals.

The CME just announced they are hiking Gold margins by 21% and Silver margins by 16%, thus prompting another emergency sell off by those trading on borrowed money. News of this always leaks early in the morning and those leveraged traders would have had to liquidate immediately.

Like last time, look for Silver and Gold to quickly rebound next week.
Gold Margin Hike 9.23

Click 'comments' below to contribute to this post.
Please read disclaimer at bottom of blog.


  1. J+M @ Broadway and Main is sold out of silver maples... or else they are clever enough to tell their customers they are sold out...

  2. There was a massive lineup at Vancouver Bullion and Currency Exchange. Didn't get over to J&M.

  3. The fundamentals for precious metals have not changed one bit. Three things are pushing down prices; increased margin requirements, hedge funds forced to sell to meet margins and the rising US dollar. The third is just a case of the US dollar currently being the least stinky of the fiat currencies. However, people ignore the fact that the US is in the same financial position as Greece and the dollar is therefore, trash.
    Remember, those attempting to shake us out of physical are buyers.

  4. questrade yesterday raised the margin for a junior gold miner I have shares in - what is that about?

  5. J&M had four maples in the case today. I bought them.