Silver Short Squeeze in Progress
Kitco Commentaries | Opinions, Ideas and Markets Talk
Featuring views and opinions written by market professionals, not staff journalists.
A few weeks ago, I alerted you to the bullish situation being created in the silver market since the global equity panic ended on February 9th. A few hours ago, the silver price began to take off like a scalded cat without any recognizable catalyst, other than the reasons I spoke of in this article. Based on the extreme bearishness of the speculator positions in the latest silver Commitment of Traders report, the price of silver can rally very quickly and far beyond what fundamental and technical analysis projects."
This silver short squeeze could easily drag gold along with it and break the safe haven metal out of a huge rounded bottoming pattern which has been building below $1375 for nearly five years. The rounded bottom in the GDX, which I alerted you to last week, may have been the warning of these bullish developments taking place this morning.
If you have positioned yourself accordingly while this set-up was taking place, I would strongly advise ceasing to trade until the sector becomes extremely overbought on a weekly basis.