Volatility is normal
Gold and silver have been marked down sharply over two days. If you have been shaken by the speed and magnitude, then that is the market makers' objective.
So what’s going on?
Market makers and bullion banks have been badly squeezed by the recent rise in gold and silver. In theory, they are long in London and short on Comex so have even books. We cannot know if this is true of all of them (unlikely) and we are talking about derivatives, not bullion. No financial institution wants to hold bullion unnecessarily, because it ties up capital. But it is bullion which is now demanded in London.
Whether market makers and bullion banks are acting in concert to bash the market matters not. The commencement of a market correction would have been spotted by all of them, and they would have withdrawn their bids and even sold some positions to help push prices lower. And as nervousness spreads on falling prices, buyers just stand back. Given the enormous rises in price since mid-August, sudden falls of 5—10% are normal in this context, but it is likely to have shaken out a few panicking sellers allowing the shorts to close some of their positions.
For them, the last two days have been very profitable both on trading volumes and mark-to-market wise.
Furthermore, unless you are running a book in London or Comex and have the valuable information to hand which goes with it, it would be foolhardy to try to call the turn. Leave that to someone else.
Long experience of being whipsawed in various financial markets has educated me to a) not make specific price forecasts, and b) buy or sell if it is right to do so and not rely on gut feel, forms of analysis, or your personal ouija board. Traders more sophisticated than you lose money in these markets.
Given that this volatility is aimed at dislodging weak bulls, you must have a good reason for holding gold and silver, if indeed you do so. Providing that knowledge is the objective of MacleodFinance.com.
Then you can smile at the antics of other market participants and sleep easy at night!
Thanks for your reassurance Alasdair!
Perfectly said Alisdair. Thank you. Today is simply validation of what we saw coming. As Jessie Livermore said, ‘Be right, and sit tight’.
Another thought I have shared with my circle is be aware of the growing responsibility we will have to rebuild our communities once this fiat scam breaks. It falls to those who can… to do. And that means us. Try to not get shaken out. Hold firm.