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Silver Shorts Holding On By A Thread

By Andrew LaneCommoditiesApr 20, 2021 07:25AM ET
www.investing.com/analysis/silver-shorts-holding-on-by-a-thread-200574106
Silver Shorts Holding On By A Thread
By Andrew Lane   |  Apr 20, 2021 07:25AM ET
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The fundamentals for silver have never been stronger. The double edged sword of the white metal with its industrial and investment appeal should lead to higher prices in the very near future.
 
Since February 2021 and the well documented silver squeeze, there has been an army of folk around the world that have brought to light what an undervalued commodity silver is. WallStreetSilver gains around 1000 new members weekly, each encouraging the next to buy physical silver in the hope of squeezing supply. And it is working there is no doubt about that. The Perth mint appears to be defaulting on deliveries. Major websites around the world are out of stock of retail coins and bars. Anything that is left on the shelf is attracting a huge premium. Some dealers are not accepting delayed orders at current prices, given the risk associated with the squeeze.
 
Such is the momentum gained through this movement, there are several big name Youtube channels that are in the midst of lawsuits against the banks that are, and have been carrying out brazen price manipulation in public view. The CFTC admitted in an interview lately that it would be problematic if the price of silver was to have gone up in February, as London was less than a week away from being emptied of supply. How is an institution that is supposed to investigate crime in markets making statements like that? Do they have huge short positions in Silver? Conflict of interest anyone?
 
The Comex in the last few months has seen record outflows that they aren’t used to because up until recent times, paper trading was settled with cash when contract month expired as no one every stood for delivery. Now the retail stackers are swallowing up supply, the dealers are having to go to the Comex. So how much is left? Unfortunately, getting the truth out of the Comex is like trying to herd cats – it won’t happen. Insiders are saying that the situation has become extremely delicate in the last few months. Basic maths could determine above ground supply is dwindling, and mines cannot produce quick enough. Recent estimates call for demand to far outweigh supply this year.
 
Industrial demand has never been stronger. With Biden’s green plan around the corner, and the ramp up of EVs, Silver is in demand. Just in the last few weeks, car production at two major manufacturers has ceased for certain models, as there is a lack of chips available to the market. Nissan (OTC:NSANY) has had to furlough staff at their Sunderland plant, and Subaru (OTC:FUJHY) has made similar cutbacks. Tesla (NASDAQ:TSLA) admitted recently that production has waned due to lack of electronic components. The fundamentals are bulging at the seams. And that is just the industrial side. The monetary appeal of silver with low interest rates, money printing, inflation, geopolitical concerns and dollar debasement couldn’t be better aligned. Silver has long been a hedge against inflation.
 
So what will it take for the price of silver to skyrocket? Two events: Banks unwind their well documented short positions and go long, and Comex/LBMA defaults. When you ask yourself, who in their right mind is selling physical silver back to the Comex at these current price levels, given the fundamentals for Silver, you don’t need to be a genius to realise it is all paper trading.

I've heard an argument against silver increasing in price recently as green technology would become too expensive. Solar panels will be unaffordable as will electric vehicles. Let me put it to you this way. Palladium is heavily used in the automotive industry in catalytic converters. Four years ago it was trading at $560 an ounce. Today it is almost five times that. Palladium suffered the same fate as silver for years with huge players shorting the market. They lost their battle. Consider what could happen with silver.  

With the shelves empty at dealers across the globe, the main exchanges struggling to cope with demand, and global silver retail movement gaining traction, this could happen very soon. When silver breaks $30 dollars an ounce and we have a weekly close above that level, the big institutions that have been short silver for years, will have to throw in the towel or face mind blowing losses. It can’t be that long to wait in what could be the last in a generational buying opportunity.

Silver Shorts Holding On By A Thread
 

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Silver Shorts Holding On By A Thread

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Comments (10)
Bharat Dubey
Bharat Dubey Apr 21, 2021 12:59PM ET
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great analysis..
Paolo Bertozzi
Paolo Bertozzi Apr 21, 2021 3:32AM ET
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this is what happens when the short system collapse. Shorts can not last forever so I saw this in may 2019 together with the proximity of the end of economical cycle (that push in massive QE and push up PMs) and since then I am buying miners (gold silver platinum) and physical. Just waiting for silver DDay.
atulit bal
atulit bal Apr 21, 2021 12:46AM ET
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MAHA JHANOO ARTICLE
Hadi Hamza
Hadi Hamza Apr 20, 2021 6:54PM ET
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Good article, thanks for that
Hadi Hamza
Hadi Hamza Apr 20, 2021 6:53PM ET
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Good article, thanks for that
craig smith
craig smith Apr 20, 2021 4:47PM ET
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Excellent article and very insightful!
Lasse Maltensson
Lasse Maltensson Apr 20, 2021 12:43PM ET
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Plz push down silver even more so we apes can buy even more at discount prices. Thanks Goldman
Gary Ha
Gary Ha Apr 20, 2021 12:04PM ET
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big community spirit on WallStreetSilver - they mean business - the cartel should be worried....
hans gaaikema
hans gaaikema Apr 20, 2021 9:39AM ET
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👍
Paul Barron
Paul Barron Apr 20, 2021 9:15AM ET
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👍
 
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