Silver Robust as CFTC Commissioner Alleges Manipulation

Gold

While gold fell marginally yesterday (down 30 cents) on dollar strength, silver rose by over 1% (by 28 cents to $23.81/oz) after a senior CFTC Commissioner alleged that major silver market participants were involved in manipulation and suppressing the silver price. Overnight and this morning there has been weakness in equity markets internationally and in commodity markets with suggestions that risk aversion may have picked up ahead of the FOMC decision next Wednesday.

Gold is currently trading at $1,333.74/oz, €963.96/oz, £841.80/oz.

Gold (orange), Silver (yellow) and Gold/ Silver Ratio (white) – 40 Years. Click on the image to view full size

Silver

Silver looks very well technically and continues to play catch up with gold which has already risen by more than 50% over its 1980 nominal high of $850/oz (see chart above). The gold to silver ratio has fallen below 57 (56.3 – 1332/23.68) with 55 and 50 looking potential targets in the coming months. Throughout history the gold/silver ratio has been close to 15 and the average in the 20th century has been around 45. The relative undervaluation of silver to gold and the fact that it remains less than half of its (nominal) record price in 1980 is leading to strong demand for poor man’s gold internationally and in Asia particularly.

Silver is currently trading at $23.73/oz, €17.16/oz and £14.98/oz.

Silver – 40 Years (Weekly). Click on image to view full size.

The US commodity futures regulator is looking into claims by a former JP Morgan trader in London that JPMorgan Chase was involved in manipulative silver trading, The Wall Street Journal reports, citing a person close to the situation. Reuters reports that in recent months, Commodity Futures Trading Commission (CFTC) lawyers have interviewed employees of JPMorgan in its metals trading business, the newspaper said. Along with JPMorgan, CFTC lawyers have also interviewed industry traders, commodity executives, experts and employees of other metals trading firms, The Journal said. Ray Bashford, a spokesman for JPMorgan in Hong Kong, said the bank had no comment when contacted by Bloomberg News today.

It is hard to know how important Chilton’s comments are with regard to the ongoing silver manipulation allegations.

They suggest that he himself agrees with the Gold Anti-Trust Action Committee (GATA) allegations that silver prices are manipulated. If the CFTC prosecutes those who may have manipulated gold and silver markets (as Chilton urged today) and violated commodities laws then it could lead to further volatility and higher prices. This would especially be the case if the large concentrated short positions on the COMEX, held by banks such as JP Morgan, were forced to cover their positions.

This may lead to a short squeeze that could propel silver above $30 and towards its nominal high of $50/oz in the coming months.

Platinum Group Metals

Platinum is trading at $1,693.75/oz, palladium is at $623/oz and rhodium is at $2,225/oz.

Mark OByrne

Also on news-goldcore-com

Videos

Expect $2,500 – $3,000 Gold In Next 12 Months

The 5 Major Trends That Are Shaping Our Economic Future

Patrick Karim on gold, inflation and the next break out

Blog posts

When The Weight of Inflation Becomes Too Much 

In a comment to MarketWatch last week we said that traders this week would be most focused on the CPI report that came out yesterday. In that very report, Inflation came in hot, above expectations, and posted its biggest monthly increase in August this year. It’s up 3.7% from a year ago. However, markets didn’t […]

READ MORE

Expect $2,500 – $3,000 Gold In Next 12 Months

It’s that time of the month again when we bring in a top chart analyst to take us through what they’re seeing in the markets, right now. This month we have the brilliant Gareth Soloway. Gareth explains why he’s watching the US Dollar, what he means by “Good news is bad news” and when we […]

READ MORE

Should We Worry About The Strong US Dollar?

Over the August period, it’s easy for people to switch off and to some extent, it might feel like the precious metals have been doing the very same! However, if you look at the YTD performance of gold across key currencies in the World Gold Council table provided below then you will take some heart […]

READ MORE

Featured

The King and Queen will be Gold and Silver

READ MORE
Newsletter
Category
Archives
Popular

No posts available

Videos

Expect $2,500 – $3,000 Gold In Next 12 Months

The 5 Major Trends That Are Shaping Our Economic Future

Patrick Karim on gold, inflation and the next break out

Blog posts

When The Weight of Inflation Becomes Too Much 

In a comment to MarketWatch last week we said that traders this week would be most focused on the CPI report that came out yesterday. In that very report, Inflation came in hot, above expectations, and posted its biggest monthly increase in August this year. It’s up 3.7% from a year ago. However, markets didn’t […]

READ MORE

Expect $2,500 – $3,000 Gold In Next 12 Months

It’s that time of the month again when we bring in a top chart analyst to take us through what they’re seeing in the markets, right now. This month we have the brilliant Gareth Soloway. Gareth explains why he’s watching the US Dollar, what he means by “Good news is bad news” and when we […]

READ MORE

Should We Worry About The Strong US Dollar?

Over the August period, it’s easy for people to switch off and to some extent, it might feel like the precious metals have been doing the very same! However, if you look at the YTD performance of gold across key currencies in the World Gold Council table provided below then you will take some heart […]

READ MORE

Featured

The King and Queen will be Gold and Silver

READ MORE