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Moving forward it’s possible we see downward pressure in silver. There is a rumor that China is putting on massive paper short positions while demanding physical delivery from the COMEX, this would explain the huge withdrawals of silver out of the COMEX.
The idea behind China’s strategy is to never honor the paper short positions and obtain as much physical silver as possible at cheaper prices. This would be a great way for China to payback the US for all the worthless US Treasuries we have sold.
It is difficult to tell what silver prices will do from here. The next time we move past $30 with authority we will likely head to $37.50. On the down side we have support levels at $28.50, $28, then $27. Long term we will be north of $100 an ounce but getting there will be volatile. Continue to accumulate but pay close attention to the physical silver market.
