Regulators and Exchanges Permit Manipulation
This manipulative activity is also permitted by regulators and exchanges in the equities market via dark pools that spoof and front-run millions of unsuspecting penny stock day traders who seem caught up in the race to catch the elusive Red Queen of a good trade.
In the meantime, the bullish fundamentals for higher silver and gold prices are slowly but surely forcing their way into the psyches of the few market participants whose minds remain open to that possibility.
On the surface, the alleged ‘not-for-profit’ seller(s) has created the illusion of a bear market — fanned by a slew of market experts who fall right into line by describing a hundred reasons why the selling might have occurred — without ever getting close to stating the real reasons that the crash happened.
Practically every notable move lower comes from concentrated short sellers intentionally destabilizing the market to force precious metal prices down, although the so-called exports never seem to see it this way. Furthermore, no matter how blatant the sudden dumping is, it is almost always painted and viewed publicly as a 'longs selling' event.
If all of that were not enough, predictable sell-offs almost always occur after margin announcements. As a case in point, maintenance margins were lowered last week, thereby providing an incentive for unsuspecting momentum or technical oriented longs to enter the market.
As usual, these weak longs were quickly harvested in less than two trading sessions after the margin announcement was made. Traders operating on margin face considerable pressure to put up more money or exit their positions — typically ultimately dumping their positions at a loss. This is exactly why this harvesting goes on month after month.
Open Interest Offers Better News
The good news, or the flip side, is that open interest has remained high in the precious metals futures markets, despite the numerous downdrafts. This indicates that stronger hands are accumulating.
Uncharacteristically, dips have been bought aggressively — often intra-session — which seems especially unusual for silver.
Furthermore, awareness is growing among futures traders about retail and wholesale shortages developing in the physical market — combined with the widespread acceptance that central banks of the developing world are accumulating gold at a feverish pace.
This ongoing process is leading more and more investors to wonder why they are not also accumulating silver and gold for their own portfolios.