As noted by J.B. below, silver margins have risen again, which represents an almost unprecedented 45% rise in only 5 days. This must represent a red alert for the COMEX boyz.

Regards - VHF

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We Buy On Dips!

J.B. Slear

November 17, 2010

We start our hump day with a positive mark in the metals. Gold is higher trading at $1,340, up $1.60 Dec contract. Silver is also higher by 26.2 cents at $25.485. US$ is also higher by 6.7 points. We might be finished with the pullback, at least the charts show the dips have reached a strong point of support. We’ll see. The real story is behind the scene of the prices. Fort Wealth has entered into another physical purchase of a contract of Gold. We watched the Open Interest in Gold go from 197 (on Monday) to 44 Tues. That means 153 contracts were delivered on Tues. Now, as of this writing, open interest in Nov Gold (the deliverable month) has climbed again to 67. As the markets jerk us around and our governing bodies stall the inevitable, smart buyers are jumping in on the dips and removing the metals from these criminal banks. Also of note, the margins where raised on both Gold and Silver, and are in effect today. That means in 5 trading days, Silver margins have increased almost 45%. That’s smoke of the fiery kind!! The last time I saw something like this where the margins are raise so quickly was back in 1996, when Corn was in a whirlwind. Bad weather and demand made Corn go to life of contract highs.

Paper markets are rebounding today as are the Treasuries. It’s going to get to a point real soon where the Treasuries are going to implode on themselves real soon. This time it seems the further out treasuries are falling first. Usually it’s the short term that falls first, but things are errr different. Grains and Softs are mixed and the Petro products are lower. This is simply a roll over move in Petro. Everyone is rolling out of Dec contracts and getting into the further months. Ironically, right after the rollovers are done is when we get the reports about how commodity prices are falling. Right after that comes out on the Cyclops, prices start to spike. My take on the G20 meeting is a complete bust!! Every country for itself, which means we’re gonna see far more physical buying in the weeks to come. Stay Strong!!