Silver dropped below $20 today

[SilverForBrains]

This is why I don't play the stock market any more. nothing makes sense.

Silver was in the low thirties when the Fed first started the current round of economic stimulus (dubbed QE3). If I recall correctly, it jumped about a dollar each time he hinted at the possibility of it. Maybe another .50-$1 when they actually implemented QE3, but that was really the last price peak, around about $34 I think it was

So how the heck is silver dropping below $20 on rumors from Bernanke that they might end QE3? the price was above $30 before they even started talking about it!

 

[lastleg]

It might be that China is having problems from over-expansion and may dump PMs on the market
bringing down premiums. Who knows?

 

[jim4silver]

It might be that China is having problems from over-expansion and may dump PMs on the market
bringing down premiums. Who knows?

I don't know for sure, but I don't believe there is any phys being dumped anywhere per se. It is paper markets being played. One interesting theory I read online is that large buyers of phys gold are pushing down the paper price and then redeeming shares of GLD (which can be done if you have enough of them) for phys held by the GLD itself. So someone is taking delivery of large amounts of phys from the GLD and maybe silver from the SLV too (I don't know if you can redeem in SLV or not?) as the price drops.

All that tonnage is going somewhere though, and at relatively bargain prices. Maybe when they run out of the phys at the various warehouses the price goes up?

Jim