by Mark O'Byrne, Gold Core: – Silver’s plunge is nearing completion – Bloomberg analyst – Silver’s 10% sharp fall in seconds remains “mystery” – Plunge despite anemic global supply and strong demand – Total silver supply declined in ’16 – lowest level since ’13 – Silver mine production down in ’16, first time in 14 years – Total silver supply decreased by 32.6 Mln Ozs in 2016 – Supply deficit in 2016- fourth consecutive year (see table) – “Falling knife” caution but opportunity presenting itself
Silver has had a torrid time of late with a the “flash crash” seeing a massive $450 million silver futures sell order pushing silver 10% lower in seconds and follow through selling later Friday after the better than expected U.S. jobs number.
The electronic futures silver and gold exchanges continue to ‘wag the dog’ of the global silver and gold markets … for now.
If one had just looked at the short-term trends of silver at the end of 2016, you would have thought we would be mad to predict that 2017 would be a bearish year.
At the time it appeared as though silver was in a new bull market and in the early months of 2017 the price climbed by around 9%. But since April silver has handed back its gains and some and it is now down 3% for the year.
This has been counter intuitive to gold and silver investors alike who are looking at an economy filled with macroeconomic, geopolitical and indeed monetary uncertainty and central banks who appear increasingly fallible as the months go on.
Some were left wondering how much lower silver could go when last Wednesday it fell through the important $16 level for the first time in 2017.
In addition, the silver price weakness was given an extra push two days later when it collapsed by 10% in a matter of seconds. The reasons why this happened are still unknown, if it was a mistake then no-one is owning up to it and if it was a result of a desire to shift off $450 million worth of silver futures in minute then we will never know.