We have pointed out numerous times that April's run higher in silver was not a mania (as Bob Moriarty would have you believe- we set him straight here), but was rather in fact a short squeeze.
BIG DIFFERENCE between the 2.
Ben Davies today stated that he is looking for another short squeeze in silver in the coming months.
We couldn't agree more. April's short squeeze in silver will look like nothing compared to the final short squeeze the day the physical market brings the paper manipulation to a sudden end.
Clearly silver had such a phenomenal rise, we made the analogy that it was like the releasing of a cork being held under water and you release that cork and whoosh up it rushed! Certainly along with many others in the market we understood the perhaps vile manipulation that was going on by some of the larger houses who, as we know, occupy that space. Clearly their positioning has been reduced substantially. I think that after you’ve had such a large move, the market has to acquiesce for a period of time, which is what we’ve been seeing.
There is probably a misinterpretation that the industrial usage for silver will fall. The reality is that the industrial usage is very much alive and that physical demand will definitely remain strong. There have been a lot of houses recommending short silver, long gold positions and I wonder if gold continues its move here, as I suspect it will over the coming months, that at some point there will be another short squeeze in silver.
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