What Happens To Gold And Silver Next? Look Out Below?

Sorry for the delay in response, it has been warm out and that means getting the Bike out and getting away from the computer.

First of all, You are absolutely right there are many so called Guru's out there with their own agenda in pushing one position or another. I consider them to be basically back ground noise. When I hear a claim of "Oh we are going to the Moon" or "Don't buy now because prices are going lower" I read what they have to say and then is where the work comes in do research to see if the fundamentals match the claims.
The Global Strategic Financial Studies has just become an interesting hobby of mine, The same as Eisenhower dollars. Nothing more.

As far as Documented Legal Proof. You know as well as I do that is an impossible request to fill designed to discredit someone's view.

Taking many things and looking at them as a whole is the only way to
get the larger picture.
There are many more moving parts to this picture such as mine production shut downs around the world and
EROI (Energy Return On Investment) How much it costs to retrieve each ounce of metal out of the ground. Along with many,many,many more moving parts.
I Never focus on just one aspect of the topic of Metals


If it walks like a Duck, Quacks like a Duck, it is probably a Duck.

I want to apologize for going off topic in your thread and I was not going to add anymore discourse by posting anymore. But this response is in direct response to a question. I will keep my opinions to myself from here out.
I do enjoy reading some of the Responses here and you have a very good thread here

Quote from Speech by Commissioner Bart Chilton before the High Frequency Trading World USA 2010 Conference, New York

I'm not suggesting a direct correlation between the inflow of
speculative money or positions and the price volatility, by any means.
Many of us learned, however, that while there may not be such a
thing as too much speculative money, that same money might be too
concentrated. We saw very large concentrations of trader positions in
2008. That has continued. Since then, we saw one trader hold more than
20 percent of the crude oil market. Even earlier this year, one trader
held over 40 percent of the silver market.

http://www.cftc.gov/PressRoom/Speec...pachilton-35

Then they trot out of all people Blythe Masters to do an interview to directly address and talk down the growing concern that they hold an excessively large concentrated position.

http://video.cnbc.com/gallery/?video=3000082631

Then add in the rash of lawsuits filed against JP Morgan for market manipulation specifically in the Silver market
Just a few of the more critical portions from one lawsuit against JP Morgan. This is a 104 page document, so just wanted to highlight key points from the suit:

1. 1. Unlawful conduct. "Defendants combined, conspired and agreed to restrain trade in, fix, and manipulate prices of silver futures and options contracts traded in this District on the Commodity Exchange Inc. ("COMEX") division of the New York Mercantile Exchange ("NYMEX"). Defendants thereby have violated Section 1 of the Sherman Act.

Also during the Class Period, certain of the Defendants, including JP Morgan, have intentionally acted to manipulate prices of COMEX silver futures and options contracts.

2. 2. Purpose and Means. Defendants have effected their foregoing restraint of trade and manipulations in order to profit themselves. Defendants have caused declines in the price of COMEX silver, and COMEX options, and also stabilized such prices through diverse means. These means include (a) a dominant and manipulative short positions and market power manipulation; (b) repeated manipulative and uneconomic trades and trade manipulation; (c) false trades made to facilitate a trade manipulation; and (d) other acts.

3. 3. Market Power Manipulation. (a) JP Morgan, gradually acquired control, between March 17, 2008 and August 2008, of an enormously large ounce short position in COMEX silver futures and silver that previously was held by Bear Stearns. This short position and JP Morgan's existing COMEX short silver positions gave JP Morgan substantial market power in COMEX silver futures contracts.

4. 4.Manipulative and Uneconomic Trades (a) During the Class Period, JP Morgan also made large manipulative trades that repeatedly caused sudden, unreasonable and artificial fluctuations in COMEX silver prices which profited JP Morgan. (b) One of these episodes occurred on August 14 and 15, 2008. JP Morgan's trades caused a very large decline of almost $1.41 per ounce, or approximately 12%, in COMEX silver futures. This represented an approximately $220,000,000 increase in the value of JP Morgan's COMEX silver short positions.

7. 7. CFTC Commissioner Comment (a) Such depressions of the prices of COMEX silver futures through large uneconomic trades created benefitted JP Morgan's extraordinarily large COMEX short position. (c) Also, these types of trades were reported to the CFTC by other persons. Plaintiffs further specifically allege that Commissioner Bart Chilton made public statements, including on October 26, 2010, to the effect that he believed there had been manipulation or related unlawful conduct in the COMEX silver futures market. "I believe that there have been repeated attempts to influence prices in the silver markets. There have been fraudulent efforts to persuade and deviously control that price. Based on what I have been told by member of the public, and reviewed in publicly available documents, I believe violations to the Commodity Exchange Act (CEA) have taken place in silver markets and that any such violation of the law in this regard should be prosecuted." Bart Chilton

58. 58. JP Morgan executed its trades on this day through, at least, a futures floor broker named Marcus Elias. Marcus Elias was a former classmate and wrestling teammate of Chris Jordan, a senior silver trader at JP Morgan. After the close of floor trading on June 26, 2007, Marcus Elias acknowledged that he had executed purchase trades for JP Morgan at or near the lows of the market. Marcus Elias also executed sell orders on behalf of JP Morgan in the morning, which contributed to the price declines, and then purchased futures on behalf of JP Morgan subsequently as the market bottomed.

65. 65. Through its trading conduct on this day, JP Morgan intended to force traders who were short out of the money puts to cover their positions. As options on July futures approached expiration, JP Morgan had no fundamental reason to believe there would be a price move downward. Yet JP Morgan maintained its put positions until the last available day to trade these options - an economically unjustifiable action because at expiration the options would expire out of the money and worthless. However, by virtue of this large put options position, JP Morgan knew that a large and less capitalized segment of the market was conversely short options. So, rather than simply liquidate its out of the money positions at a loss, JP Morgan sold futures into the market and placed "spoof" orders to generate widespread panic. This selling forced panicked traders to systematically sell silver futures. As discussed below, this conduct was repeated again in August 2008.

The suit also names Robert Gottlieb who came to JP Morgan from Bear Stearns along with a massive silver short position which JP Morgan inherited from Bear Stearns:

100. c. JP Morgan's Communications with HSBC

88. 88. Between 1996 and 2000, Robert Gottlieb, Christopher Jordan and Michael Connolly worked together at the Precious Metals Trading Desk of HSBC and at Republic National Bank of New York, prior to its acquisition by HSBC. 89. In 2006, Jordan began his employment at JP Morgan where, until 2010, he was one of JP Morgan's principal COMEX silver futures and options traders. 90. After a brief stint at Bank of America as a commodities trader, Mike Connolly returned to HSBC in 2007, where he served as Senior Vice President of HSBC's Precious Metals Desk. 91. In March 2008, Robert Gottlieb began his employment at JP Morgan Chase where he presently serves as a Managing Director/Trader. 92. Prior to JP Morgan's acquisition of Bear Stearns in 2008, Mr. Gottlieb had worked for Bear Stearns from January 2006 forward. 93. Bear Stearns, through Robert Gottlieb and others, had developed the previously alleged large Bear Stearns short position in COMEX silver futures prior to March 17, 2008. 94. Contrary to standard antitrust compliance manuals, Mr. Gottlieb regularly spoke to, and communicated and met with HSBC silver trader Mike Connolly from the time that Mr. Gottlieb joined JP Morgan until at least October 2010.

500. d. JP Morgan's Motive and Financial Incentive to Cause Lower COMEX Silver Futures Prices From The Second Quarter Of 2008 Forward.

95. 95. By the second quarter of 2008 and continuing thereafter through the end of the Class Period, JP Morgan possessed a large financial incentive to cause lower COMEX silver futures prices. Lower COMEX silver prices caused the mark to market value of JP Morgan's short COMEX silver positions to increase. The amount of the increase in the value of JP Morgan's short COMEX silver short positions was at least $100,000,000 and was as much in excess of $150,000,000 for each $1 decline in COMEX silver prices.

116. 116. According to other witnesses as well, on or before August 15, 2008, brokers who often executed trades for JP Morgan accumulated a significant number of September puts that were well out of the money. 117. As prices decreased, these September puts became much closer to being in the money. Accordingly, those who had been selling these puts had to close out their positions by buying back the September puts on August 15, 2008. 118. Chris Jordan at JP Morgan was selling back large amounts of September puts on August 15 at an enormous profit.

This now showed up two days ago on the CME Metal Depository Stats
Check out the new disclaimer at the bottom

http://www.cmegroup.com/trading/ene...r_Stocks.xls





1. Bear Stearns had a silver short position and was acquired by JP Morgan.
2. 25 lawsuits against JP Morgan for manipulating the silver market.
3. Admission by Bart Chilton of the CFTC that one entity controlled 40% of the silver at COMEX.
4. Admission by the Justice Department that they were investigating JP Morgan for silver manipulation, published by the NY POST.

I was like OH NO, my MarketWatch shares are dropping (it's a very fun simulation game). So, I pulled up CNN Money and the words "Gold & Silver" appeared out of no where.

Here's a statement that caught my attention "The other big problem for silver and gold? With U.S. stock market indexes up 16% so far in 2013, there are plenty of other investments out there that look good right now.".

Personally, I always comprehend the opposite of what CNN says, this statement simply means that US Stocks suck and they are indeed bubbles, silver and gold rocks and are "the better other investments out there".

"The good news for metal investors is that there are plenty of signs pointing to some stability in gold prices right now... at least in the short term. "

Oh yes, it is quite stabilized right now, like pressurized gas in a thin can.

here's the link to the article, thanks for letting me share.
http://money.cnn.com/2013/06/05/inv...r/index.html

BTW, I bought an OPM 10oz Bar for $242(CC) today from Provident Metals, they're having a sale w/ free shipping! Pretty good deal I should say. Stay away from the 1oz OPM rounds which are currently being counterfeited by China, I saw a listing for them on Alibaba, the 10oz are safe though.

Lol Silver dollar you think the same way I do , when CNN or most of the other so called "media" propaganda outlets say one thing,always do or think the opposite

Pending litigation is not necessarily anything beyond pending.

I received this news letter from Christian DeHaemer and thought is was interesting and wanted to share with you guys;
Silver has had a bad run of it.
After climbing from below $10 to almost $50 from 2008 through 2011, silver has dropped by more than 50%. Heck, it is down 35% this year alone.
It has fallen so far so fast, we are back near the 2008 highs.
It is trading at $21.69 as I write this. This is very close to the production costs of miners.
A contrarian investor believes you should zig when the market zags. After all, if the herd has sold, then everyone left must be buyers. And when the herd comes stampeding back, we'll be more than happy to sell it to them at a profit...
We are all good contrarians, are we not?
With that in mind, I present the bullish case for silver.
The dominant paradigm in precious metals has maintained that there has been a manipulative cap put on the price in the U.S. and Europe â€" that is, central banks want to push down the price to keep inflation low, while there is a premium placed on physical metals in Asia.

A few weeks ago, physical silver was trading as high as $30 per ounce in Shanghai due to lack of supply. Recent numbers out of China say gold imports will hit 880 tons this year.
India will import 965 tons in 2013.
Furthermore, it is expected that central bank gold buying will be between 450 and 550 tons this year.
The question is why would precious metals have a disconnect between increased demand and falling prices?
It's impossible to say. We outsiders may never know.
What I do know is that the market can be manipulated for awhile, but the truth in price discovery finds a way to become clear sooner or later. And when that happens, you will have a massive rerating of silver and gold ETFs. That's how speculators make the big bucks.

-The Big Bucks

If you look at the charts, you can make a bullish call on the technicals.
I like silver because it has seen a bigger drop than gold, is more volatile, and has more upside in the short term.

Here's the chart of the Silver ETF SLV:


As you can see, there was a massive dumping of shares in April as hedge funds and other investors puked out all of their holdings. The corresponding volume spike is called a capitulation low.

Investopedia defines capitulation as "when investors give up any previous gains in stock price by selling equities in an effort to get out of the market and into less risky investments. True capitulation involves extremely high volume and sharp declines. It usually is indicated by panic selling."
That's just what we saw in the SLV market in mid-April.
You will also see a crossover of the MACD line, which is a moving average indicator. A cross below the zero line is considered bullish and visa versa, though it usually takes some time for this to play out.
The second volume spike in mid-May is value investors coming in at the support line, which goes back to the 2008 high.

Lastly, I present a hoary old Wall Street trader saying, "The market abhors a vacuum, and gaps get filled." This means the share price will come back up and fill that gap-down around $25.
Not all gaps get filled, but this is another data point in favor of the bulls.
You can make a solid technical case that silver will pop back up above $24 in the short term â€" though it has to break out of its downtrend for me to be a serious buyer, and not just an options trader...

Shorts

There is a very real possibility of a violent move upward.

The silver price moves both as a safety play against a falling currency and as an industrial metal.
Right now, no one wants to own silver because of the global commodity slump and slow economy, coupled with a surging U.S. dollar. If either of these trends were to show a hint of reversal, silver could launch.
I'll tell you why...

As of May 21, the speculators at the Comex division of the New York Mercantile Exchange turned net short for the first time since early April. Not only that, but net shorts are at a record level.

According to Forbes:

Several market watchers said with the increase in speculators' gross short positions are at record highs, which underscores the disinterest traders have for gold (silver) and the problem prices have when they try to rise.

Given the sizable gross short positioning, if attitudes change, there is room for prices to rise a fair amount, spurred by the possibility of short covering, analysts said.

This is similar to the situation we saw in July 2012. That's the last time we had so many short positions in silver and so few longs. That was the low in silver for the year... and within two months, silver prices rose more than 30%.

When there are so many shorts and you get an upward move in price, the shorts must cover â€" i.e., buy back the shares at a higher price.
Once short covering starts, all the traders must run for the door at the same time. This drives up the price, and puts more pain on the shorts. And as soon as the longs see the short buying back shares, they jump in and drive the price even higher, creating a rapid boom.
This is called a short squeeze. It happens all the time.
****There is a good chance it will happen in silver and gold within the next three months****

So there you have it: Asia retail and global central banks putting a floor under prices... a short-term bullish technical chart... and a massive set up for a short squeeze...

Silver has had a bad run of it.

"It is trading at $21.69 as I write this. This is very close to the production costs of miners."

I am highly skeptical of silver production costs having increased that much in 5 years. In 2008 silver was "selling" for less than $10 an ounce and in 2013 it costs $22 to mine it... Inflation really is higher than I thought - or numbers are being inflated...

....and yes I agree with the gents above me.

Both the silver and gold miners will do what they have to and still continue to mine gold and silver. They can cut production, cut costs, shut down mines, and I think down the road we will see a series of mergers and acquisitions of all the miners as the sector consolidates.

Finally, the gold and silver miners do a TON of hedging. So while everyone wants to deny how important the futures market is, these miners, all of them, are making money and hedging by using futures contracts and even using FX contracts (foreign exchange/currencies) to help their productions costs and or make money as the prices bounces around or slide.

So in the end, the miners will continue production no matter how low the price goes.

I like the post Miggs had, especially the technical side. Yes, if you were a swing/daytrader, you are having a field day with this range in both silver and gold, its almost like mail box money.... sell short the higher end of the range and then buy the lower end of the range, (wash, rinse and repeat). I know many traders doing this exactly right now as it fits their time frame. By using options, you also mitigate risk in case the range does break and you don't get caught wrong footed.

Turning our attention to the action today thus far in the AM-

a flip flop, with lower highs and lower lows thus far. Can you believe, in another week and half and we have almost 2 months of this range.

more later