Ed Steer explains what is happening in the silver market more than two months after the silver story started making headlines.
The silver crunch started making headlines more than two months ago, but momentum continues today, led by retail investors continuing to grab the physical metal.
Ed Steer of Ed Steer’s Gold and Silver Digest said that while he congratulates those who bought physical silver, there is a reason why their efforts have not led to a sustained increase in the price of the ‘money.
“They certainly have an impact… as far as the physical market is concerned, but when it comes to the short position that exists in the COMEX futures market, it doesn’t make any difference,” he said.
“The only way to reduce sales is to enter the COMEX futures market and do so,” added Steer, who is also director of the Gold Anti-Trust Action Committee.
The entities behind COMEX’s short silver futures position have changed over time, but Steer said that currently he and silver analyst Ted Butler believe the “big two” are Citigroup (NYSE: C) and HSBC (NYSE: HSBC, LSE: HSBA). Along with other large traders selling silver short, they eliminated the price hike that occurred when money squeeze started to gain traction.
“The price explosion evaporated in just a few hours because they entered and bypassed the market as much paper money as needed to bring the price down,” he said.
Steer also spoke about the current silver supply, saying the retail and wholesale markets are tight. In particular, he discussed the Perth Mint and the topic of unallocated and pooled accounts – click here and here for two silver articles on this subject which were written by Butler and recommended by Steer.
Of course, the question for many market participants is whether COMEX’s short silver position can be broken. On this point, Steer was optimistic, but realistic.
“The signs are that this could be the year this is going to happen. Everything you see right now shows that things are about to break down, ”he said. This has been true in other years as well, but he’s optimistic that this time the surge of interest in money will make a difference.
Watch the interview above to learn more from Steer about manipulating the silver market.
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Title Disclosure: I, Charlotte McLeod, do not hold any direct investment interest in any of the companies mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or completeness of any information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investment News Network and do not constitute investment advice. All readers are encouraged to exercise due diligence.