APR 20, 2018
JPMorgan’s enormous physical silver holding puts it in a unique, market-controlling position. After paper shorting for years while acquiring a gigantic long physical position, signs of the shackles coming off the silver price are emerging.
An enormous retail short position, a gold/silver ratio over 80, ramping industrial demand, falling production supply from mines, and one of the most powerful coiled-spring/consolidation charts you’ll ever see (the sort of which have preceded silver’s past volcanic upward price explosions) have yielded a dream setup in silver.
Silver prices have been locked in a price channel between $16 and $18 per ounce for a couple years now. Add a bit of leeway to that price range, and we’ve been seeing a pretty flat market for going on five years.
Mine supply increased for 13 years straight through 2015. Both 2016 and 2017 saw production fall.
Meanwhile, industrial demand — which consumes about 60% of world supply — registered its first rise since 2013, largely thanks to increased use in solar power cells. Solar growth is poised to soar in the years to come.
Even jewelers and cutlers, which account for another quarter of total usage, have posted increases.
But while the silver bears are willing to plod on with the status quo, there really isn’t room to push prices further down. Silver is about as cheap as it ever has been, especially when compared to gold.
In short, while the supply and demand fundamentals have switched to a bullish outlook, investors were overly skeptical or just ignorant, and were willing to sell into the market in the $16-to-$18-per-ounce range.
The easy money from shorting silver is coming to a close, and a massive short squeeze is being plotted by the megabank that practically invented "how to profit by suppressing prices."
Keep a close eye on the silver market and look into investment opportunities. JPMorgan will pull the trigger, and it is only a matter of when. We’re in the calm before the storm.