Silver Drop

It's 4 August at about 12:15 PM. Anyone check out the price of silver in the last hour or so? It's dropped like a rock from $42 to BELOW $40 per oz. That's a five percent drop in about a half an hour. I'm always curious, what causes huge dips like that?

As an aside the Dow is down 300 or so pts right now as well. Usually I see more of an inverse relationship between blue chips stocks and PMs though.

 

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yes I just woke up and thats the first thing I checked, news was on and dow down 300 and silver down to almost 39.50 quite a down spike there http://www.kitco.com/charts/livesilver.html#ny

 

I am curious as well! I've only seen this happen like on May 1st when margins were raised causing a cascading effect on the way down as sell positions are taken out. My hunch is that this is a coordinated takedown because gold is so high, and you can't get to gold directly, you have to use the much more easily influence silver market to drag it along.

Silver down 6%, gold down 1.5%, oil down something like 2%, dollar up 1.5% Looks like things may have just bounced.

 

Take a look at this:
http://www.kitco.com/kitco-gold-index.html

Trader wise, gold is doing fairly well today so interest is still there. Silver is losing interest though.

 

That is curious. Maybe people who missed selling when it got up around $50 don't want to wait this time and there is a sell-off taking place. Platinum and pallidium are taking a beating.

 

The problem is in the European financial risk and its effect on the US. The scenario that is often proposed that in deep trouble , people will go to gold and PM out of paper. But the USD is holding relatively strong at 75+, oil is at 87-88. Do not think that gold and silver will save your wealth if this continues.
IMO

Jim

 

I personally think its just a profit taking day for the PM's.

 

When equities are sold and bonds purchased with the proceeds, you see a move like today. And when the margin call arrives, the investor has to liquidate some asset that is most easily sold, and that can turn out to be PMs. Money will flow to the USD as long as there is fear, so for now the dollar will be strong. How long this lasts is anybody's guess. The same thing happened a few years ago when the market fell below 7000.

 

Great explanation thank you Cloud.

 

2 PM and still plummeting.

 

Its Friday.

 

I agree

 

On a related note, oil is down $5 a barrel. Looks like all the commodities are taking large hits today.

 

I was hoping to pick up some PCGS stock (CLCT) for a good price on today's dip. It's up nearly 1% today. Explain that one!

 

There was a stealth Margin Hike yesterday and probably more attackes today! READ...

So a Margin strike and then immediate plunge in silver the next day. :devil: You do the math!

Hang in there brothers and sisters, be patient and wait em out. I'm sure the banksters are
fuming that they can't hold down metals as expected, following dept ceiling agreement, etc
so they got to revert back to dirty tactics again, exposing themselves. :yes:[h=2]Currency Wars & Another “Drive-By-Shooting”[/h] August 5, 2011 CK.Diong Leave a comment
The world watches as…

• US raised its debt ceiling – more borrowing, more printing
• Swiss National Bank flooded its money markets as it tried to weaken the currency
• Japan intervened in the currency markets to slow the rapid rise of the yen
• News of Thailand, South Korea & even Greek central banks buying gold
• Investors flee the stock markets, Dow plunged
• Gold’s relentless push into all time highs continued
• Silver climbed steeply against all major currencies

Obviously something had to be done as competitive devaluations and flight from fiat currencies into gold & silver gained momentum. And so, another orchestrated take down of PMs not unlike the Drive-By-Shooting event of May 1 just took place…. and is still continuing as I write. Another margin call??
Silver Takedown - Another Margin Call Drive-By-Shooting?

 

That's more along the lines of what I had suspected Italba. This is pretty much the 3 month anniversary of the May 1st takedown. I suppose it probably has more to do with the aftermath of the debt ceiling show than anything else, but I will definitely be watching closely in 3 more months come November just to see if there is a trend (as if I don't all the time anyway hehe).

 

Pardon, but I didn't see any proof at all in that story, just an attention grabbing, unfounded headline. Was there a part of the story I missed where they actually published the increased margin requirements on the CME?

Jumping to conclusions just because it fits your world view is usually a good way to lose a lot of money. I am seeing evidence everywhere today of a massive selloff due to uncertainty. Silver was not an isolated incident.

Chris

 

If anyone can show me an example of a drop this hard and this fast that did not involve margin increases I would certainly be willing to amend my opinion, which is all it is. I have a hard time believing that an ~8% drop in 4 hours is due to market fundamentals, but you are correct in that the article is speculative.

I am sure Ted Butler will chime in and shed some light in due time.

 

I have stocks that lost 8% today, should I write a speculative article trying to blame the decrease on outside forces or some monetary conspiracy?

When I hear hoofbeats, I think horses, not zebras. I see markets all over the world today down, some individual stocks down 10%, assets across the board being sold off, almost every PM down, so therefor silver being down does not lead me to believe in "market manipulation"

Remember, silver is more volatile than most assets. Silver investors love that fact when their silver goes up, and then cry market manipulation when it is going down it seems. I have read the same "market manipulation" stuff about PM for 30 years, it reminds me of Lyndon Larouche.

 

Good thing I bought that silver collection yesterday.