"Some of you wrote to me about the sharp sell-off in silver on Friday, asking if it was a special day after Thanksgiving sale. Although I did treat it as such, it was a bit more than that. In fact, it was one the most overt examples of intentional disruptive trading on the COMEX that I have ever witnessed. On extremely light trading volume, prices were suddenly rigged lower in the early hours before the COMEX‘s traditional opening. (My friend, Ed Steer, reminded me that volumes for Friday were even lower than posted, as it covered two day’s trading). Because volume was so low, not much forced-liquidation occurred, but it was still a blatant example of what’s wrong with the COMEX, owned by the CME Group, Inc.
I know there were plenty of legitimate-sounding excuses for the sell-off (like dollar strength), but the fact that silver always seems to suffer the largest percentage declines on these days is more than coincidental, in my opinion. We’ve all come to accept the fact that silver is more volatile than just about any other commodity, including gold, but I would ask you to think about why that is the case. I think we accept silver’s great price volatility because we have witnessed it repeatedly and have come to expect it; not because there is any legitimate reason for that volatility. Sure, silver is a small market, but there are plenty of smaller markets that are not near as volatile. Sure, silver is both an industrial commodity and investment precious metal asset, but how the heck would that account for it having such extreme volatility? I challenge you to come up with a legitimate reason why silver is so volatile, aside from we’ve come to expect it."
cheers rose
