Over the past several months, there have been comments from various sources calling for the bottom in gold and silver. There have been a couple of people that have stated this is not the case. One of those people is Jeff Nielson of Bullion Bulls Canada and writer for Sprott Money. Jeff, beginning in February, has gone so far as to call the upswing in silver, in particular, as well as gold, as being a “fake rally”.
I sat down with Jeff to get an update to our conversation from March 24, 2016 when he stated the same “fake rally”. In March, Jeff explained it like this:
Currently, what’s taking place in bullion markets, over the short term, we are in the middle of a fake rally. My premise for that is really simple. As we’ve seen the metals prices advance the price of gold has been leading silver, but in any legitimate precious metals rally, the price of silver always leads the price of gold. This is a rule of precious metals markets for a very simple reason. By dollar value the silver market is much, much smaller than the gold market. Jeff Nielson, The Daily Coin
This call goes against the contrarian view point – contrarian to the contrarian! Jeff even stated the pullback would begin at this time:
If you want to crash metals prices and they are already at bargain basement levels then you have to march them up a bit first, if you wanna give them a really good crash. So, it’s take them up so you can push them down even harder and faster. Maybe that harder and faster is starting today (Editors Note: Gold was down approximately $24.00 and silver was down approximately $0.60 when we recorded this on March 23.) My sense is this is a little premature, my sense is this will be a false takedown, if you will, and then we’ll see metals prices quickly bounce back again to assume their pseudo rally and the actual take down will occur a few weeks down the road. – Jeff Nielson, The Daily Coin
This has proven to be precisely how it played out. It was three weeks ago when the Federal Reserve began their nonsensical talk of “raise interest rates” – “don’t raise interest rates” and the metals have been on a downward spiral ever since.
The metals are another of the (now confirmed) manipulated markets. They move according to the people that pull the levers and produce the “news” which points the “HFT” trading algorithms in the direction that is desired. The “trading” then begins to move prices in the manner which benefits the people/companies at the very, very top.
Fast forward to today. As Dave Kranzler of Investment Research Dynamics explains on the Silver Doctors Metals and Markets Weekly Wrap, all the news that has been produced over the past three weeks has all been specifically to attack the gold price and, equally, the silver price. The one exception to this overall economic/financial news cycle is the BLS labor report on Friday, June 3. This one piece of news stopped gold and silver from sliding further, at least for the moment.
Prices are generally moving down and we are just a few days away from the Federal Reserve meeting. The precious metals market will, in all likelihood, continue moving downward. The only question is: will gold and silver reach new lows or test the low that was established in December 2015?
Jeff seems to think the metals, especially silver, could revisit lows that have not been seen for several years. Gold, in his opinion, could retreat to $1,000 per ounce before it’s all over, and silver could revisit a single digit trading number. Can you imagine $9.99 per ounce for silver? Would there be any physical silver available at that price? My guess is absolutely not. I believe the physical markets would seize up and Jeff believes this as well. Jeff has some ideas on how the people in charge may handle such a situation.
This interview is not to be missed. As the title implies, we are reviewing the market from a different perspective and discuss aspects of what is potentially coming down the pike. We should challenge ourselves everyday to reach a stronger, deeper understanding of how these rigged markets move and pay close attention to the clues the oligarchs share through their memos, meeting minutes and public dialogue. We are all here to learn and we hope you learn something from this conversation.
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