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Copper Catcher
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USA
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 Posted - 08/11/2010 : 21:00:45
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The Days Of Silver Manipulation By The Bullion Banks Are Coming To An End
By David Levenstein 5 August 2010
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During July, silver prices were severely tested for support. And, even though the long-term 200 day moving average as well as the key support level at $17.50/oz were both breached a few times, the price of silver managed to crawl back above this level and close the month at above $18/oz level. On numerous occasions I have mentioned that even though I am extremely bullish on silver, prices can be very volatile as the silver market is prone to manipulation by the US bullion banks (large commercials).
Long-time silver investors are well aware that there a tendency for the prices of precious metals such as gold and silver to trade sideways to lower, hitting bottoms by mid-August. And, as we have seen prices plunge over the past few weeks I am certain many silver investors have cause for concern as they see this sideways pattern in price continue. However, there are many analysts who will tell you that August is the perfect time of year to bargain shop for physical holdings. And, once we enter the northern hemisphere autumn months, the prices of gold and silver should recover from their lows as the buying season resumes in many regions of the world in particular India.
On July 23, the Wall Street Journal published an article about Wall-Mart Inc. According to the article, Wal-Mart Stores Inc. plans to roll out sophisticated electronic ID tags to track individual pairs of jeans and underwear, the first step in a system that advocates say better controls inventory but some critics say raises privacy concerns. Starting next month, the retailer will place removable "smart tags" on individual garments that can be read by a hand-held scanner. If successful, the radio-frequency ID tags will be rolled out on other products at Wal-Mart's more than 3,750 U.S. stores.
Wal-Mart's broad adoption would be the largest in the world, and proponents predict it would lead other retailers to start using the electronic product codes, which remain costly. Wal-Mart has climbed to the top of the retailing world by continuously squeezing costs out of its operations and then passing on the savings to shoppers at the checkout counter. Its methods are widely adopted by its suppliers and in turn become standard practice at other retail chains. Each RFID tags (radio frequency identification), contains silver.
In July sales of the US Silver Eagles were 2,981,000 making the total for the year 21,149,500. And, the The Perth Mint is going to increase the annual mintage of its popular 1oz Australian Kookaburra silver bullion coin. A mintage ceiling of 500,000 has been set for the 2011 release following the sell out of all 300,000 2010-dated coins. The coin also sold out in each of the preceding two years.
Investors should also be aware that the Commodity Futures Trading Commission (CFTC), intend to introduce position limits on all metals including gold and silver. In several interviews, Bart Chiltern, the commissioner of the CFTC made it very clear that he will be imposing limits and investigating the use of exemptions of these limits. Over the years, it has been evident that bullion banks such as JP Morgan have abused these exemptions. They are meant for companies that intend to use the futures markets to hedge production, and not for speculation. This news is very encouraging, and in time to come, we should see an end to the price suppression of silver.
TECHNICAL ANALYSIS
As can be seen by the circle in the above chart, each time the price of silver has breached the 200 day moving average it is bounced back above the line. While the price remains sandwiched between $17.50/oz and $18.50/oz I believe that as we head towards the cyclical lows we should see a break above the 50 day moving average, and the key resistance level of $18.50/oz
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The Days Of Silver Manipulation...
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