This is Not the Silver Breakout You’re Looking For!

Every once in a while, one regrets not acting sooner, not acting soon enough. In our case, we did not publish this Tuesday evening. We should have. Today the price is down, and others may also call for lower silver prices.

Oh well. They are not calling for that, based on the same indicator we observe – the silver basis.

 

Silver Price Basis Chart

 

 

Look at that moonshot!

basis = future(bid) – spot(offer)

cobasis = spot(bid) – future(offer)

As the price has risen since February 25, from under $24, to yesterday around $27, the basis shot up. It went from 0.67% to 4.18%.

 

Silver Buyer Beware

Folks, it does not get any clearer than this. The big price rally in silver was driven by big buying of silver futures.

NOT physical metal.

This is not a bullish sign. Those who buy futures are playing with leverage. In the best of times, they will sell to take profits. And in volatile times, they may need to sell to cover margin calls. Even when the silver price is rising, they may have margin calls on other positions in their portfolio. Or they may just be more jittery. We discuss these market dynamics, including our price forecast for silver this year, in our free Gold Outlook 2022 Report.

Argentum emptor cave.*

*Silver buyer beware

 

Dr. Keith Weiner is the president of the Gold Standard Institute USA, and CEO of Monetary Metals. Keith is a leading authority in the areas of gold, money, and credit and has made important contributions to the development of trading techniques founded upon the analysis of bid-ask spreads. Keith is a sought after speaker and regularly writes on economics. He is an Objectivist, and has his PhD from the New Austrian School of Economics. He lives with his wife near Phoenix, Arizona.

 

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Dear Readers!

You may have noticed that our header carries ab black flag. This is due to the recent passing of the main author of the Acting Man blog, Heinz Blasnik, under his nom de plume 'Pater Tenebrarum'. We want to thank you for following his blog for meanwhile 11 years and refer you to the 'Acting Man Classics' on the sidebar to get an introduction to his way of seeing economics. In the future, we will keep the blog running with regular uptates from our well known Co-Authors. For that, some financial help would be greatly appreciated. A special thank you to all readers who have already chipped in, your generosity is greatly appreciated. Regardless of that, we are honored by everybody's readership and hope we have managed to add a little value to your life.

   

Bitcoin address: 12vB2LeWQNjWh59tyfWw23ySqJ9kTfJifA

   
 

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