Silver Price… Expecting the Unexpected

by Ted Butler

Silver will soon explode in price, suddenly and shockingly, in a manner never seen before, including the great price run-ups in 1980 and 2011.

Silver Price… Expecting the Unexpected | BullionBuzzSilver has been declining on a daily basis for some time, but what is extraordinary about the upcoming move higher is the manner in which it will occur. It will be the greatest short-covering rally in history; that’s guaranteed because the COMEX silver short position is the largest and most concentrated short position in history.

JPMorgan has amassed a physical stockpile of silver of at least 600 million ounces at an average cost of around $20 an ounce, all while continuing to make hundreds of millions of dollars in manipulative COMEX short selling. This epic accumulation has changed the composition of the concentrated COMEX short position more than any single factor.

The big shorts, apart from JPMorgan, appear to be mostly foreign banks. The speculating foreign banks are precisely the type of short sellers most likely to panic when silver prices start to rally, and it becomes clear that JPMorgan is no longer the shorts’ protector and short seller of last resort.

Even after the recent selloff, the short position in COMEX silver is still at astronomically high levels relative to all other commodities. The seven biggest shorts (ex JPM) are still short around 350 million ounces (70,000 contracts). It is impossible to imagine such an amount being purchased except at prices $20 to $30 higher, at a minimum.

Then other forces will kick in, such as ETF buying, which has been subdued for the past six years. On a rally where silver prices jump, it would not be unreasonable to imagine $2 billion to $3 billion of investment demand coming from investors excited by rising prices.

Silver manipulation has become more obvious than ever, particularly this last deliberate selloff. Where is it headed? How much longer can it last? Something has to give and when it does, it will go down in history.

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