Ed Steer: New Shorts Will Be Rocket Fuel for Silver Price
Tom welcomes Ed Steer back to the show, Ed writes a weekly subscriber column on the precious metals markets.
Ed begins by discussing manipulation in metals and why the dollar index is also ‘heavily managed’. When considering the amount of money being created the dollar should be much weaker.
During the past few months, the flows of physical gold into ETFs have declined. However, silver continues to flow into the ETFs and big players are likely involved.
The four largest traders are trying to exit their short positions. We’re down to four large banks and successfully managed to run palladium down. These banks use short positions to manipulate commodities. Palladium is very easy to manipulate because of its small size.
He explains how small traders are hoodwinked into joining short trades. We see this now with some managed money traders. When the market finally shifts these players will be forced to cover at a loss. This will drive the price higher.
The current silver short position represents 184 days of world production. If a similar position existed on crude someone would be in jail. Sooner or later prices will blow up and the WallStreetSilver crowd has them cornered. “Metals prices are going to heights that we can’t even imagine right now.”
Physical silver remains tight and available supplies remain quite low. When large players get involved we could see an explosion to the upside. Increased demand for large 1000 oz bars occurs could quickly cause futures prices to rise. It’s only a matter of time before this occurs.
Ed outlines the increasing demand situation for gold from India and China. What happens from here will be crucial although silver continues to lag.
Massive inflation is coming as central banks have now entered a period of “print or die”. There is no way they can avoid inflation and this problem is now here to stay.
Talking Points From This Episode
- Dollar and metals manipulation.
- Palladium and short positions in metals.
- Physical silver supply and demand for gold in Asia.
Time Stamp References:
0:00 – Introduction
0:38 – Dollar Headwind
2:13 – Depository Metals
4:13 – Engineered Prices
9:45 – Very Bullish Setup
11:07 – Sizes of Shorts
16:36 – Retail Silver Market
20:47 – Large Bar Market
23:00 – India & Gold Demand
26:33 – Inflation or Deflation
27:31 – PVC Pipe Pricing
29:01 – Wrap Up
Ed’s interest in precious metals began about 35 years ago during the final upside blow-off in silver and gold when the Hunt brothers tried to corner the silver market back in the very late 1970s, culminating in the high price spikes in both those metals in early January of 1980.
He made a lot of money during that period and lost a lot when the whole thing came crashing down. Almost 20 years passed before his interest in precious metals was revived. Even with the Internet in its infancy in 1999, it didn’t take long to discover that all was not as it should be with gold and silver prices.
In early 2000 Ed ran into GATA and silver analyst Ted Butler on the Internet, and the rest, as they say, is history. He wrote commentaries for Bill Murphy over at lemetropolecafe.com for several years, and eight years ago, David Galland over at Casey Research was kind enough to ask Ed to write for their company, which he has done ever since.
After 15 years of watching, analyzing, and writing about the precious metal market, Ed says, “I know a thing or two about it and, as I’ve already stated, the first thing I found out was that gold and silver prices were and are being actively managed.” A state of affairs that has now become obvious to all except for the willfully blind. This price management scheme has now extended into platinum, palladium, and copper during the last few years and this, amongst many other things, is what I write about daily.