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Have Asian buyers checkmated silver shorts?

Eric King of blogged that his sources say Asian buyers effectively have checkmated the silver shorts.  No doubt about it, there is a major battle going on in the silver markets.  Volumes are at record highs, and volatility is extreme.

Many clients ask who’s doing all the selling.  CFTC’s COT reports suggest it’s the usually suspects, the bullion houses.  But, a better question may be who’s doing the buying?  Eric King says it’s some Asians, who have brought some really big money to the game.

Undoubtedly, the Fed’s announcement of Quantitative Easing 2, with one noted analyst saying it could bankrupt the Fed.  QE2 has made many people revaluate their desire to hold dollar-denominated investments, such as US treasuries.

2 Responses to “Have Asian buyers checkmated silver shorts?”

    • Bill Haynes

      I ended without an answer because I don’t know the answer. We will know in a few weeks if the bullion houses are checkmated.

      Gene Arernsberg, in his latest GotGoldReport, notes that despite silver’s surge in price that the large commercials actually REDUCED their short positions. In previous significant run-ups, they added to their shorts. The LCs not piling on suggests that maybe they are not confident that silver will see significantly lower prices in the immediate future. Said another way, maybe the LCs are afraid to short silver at even these levels.

      Only time will tell, which, again, is not an answer.


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