"Once the tinderbox is lit (in this extraordinarily dry forest), the price of silver could take off to $40 very quickly, and then shoot for $80 per ounce in the not too distant future. Once silver takes out $31.25, the price is likely to accelerate in short order and head towards those numbers. Prices could even double from that, but it will take a much longer period of time."

*Then today I received a phone call from a sophisticated Café member who is in the gold/silver business. This person asked me about a client who was having trouble getting his $5 million silver order delivered. He is getting one excuse after another why he is not getting his physical silver. The question to me was about the manufacturing dates these days for silver being delivered … meaning that what is delivered are current date bars … because there just isn’t any silver around in size to be delivered. SMOKE is everywhere. It is billowing and is advertising the coming silver fire.

*Now, for nearly two months I have been bringing to your attention what a problem JP Morgan has with their silver short position. We do not need to rehash it all. But knowing what is coming, it would make sense for JPM to cover what they can, while they can. It won’t mitigate their problem, but it will cut their exposure.

*One more time! It won’t be too long before the investment sharks in the world realize just how tight the physical silver market is and that JPM has a problem with their short position. Once this becomes apparent, with no equivocation, these sharks will go after JPM … especially when there is growing talk of DELIVERY DEFAULTS beginning to surface. This, among other things, will expose JP Morgan’s market manipulation role all these years.

SILVER REMAINS EXPLOSIVE!

From a technical analysis standpoint, it doesn’t get much better than this. Gold took out its key level of $1650 and then turned around in short order, taking out that key resistance level right above $1675 and managed to close above it … erasing The Gold Cartel’s prior efforts to prevent it from doing so. We had an outside day reversal to the upside involving two critical price points. That is a rare occurrence.

While gold briefly took out its key $1650 level, silver stayed well above its key $30 level. The buyers were waiting for the dip and were right there stepping up to the buy plate. And buy they did, taking silver back up to its recent multi-month highs at $31.20 and change … then taking off from there to a $31.55 high. Therefore, the stellar silver close through its resistance level confirmed what gold did, accomplishing the same outside day reversal to upside.

Gold made a new high for the day on its close and silver closed not far from its high. It is important to keep in mind how the shorts have pounded away at gold and silver for a long time now. Anyone who is still short has a losing trade on the books for the moment.

We have spent some time via this commentary covering how powerful the gold and silver charts are … with the operative word being explosive. Here they are:

Daily gold