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Are you still wondering why gold plunged so far and so fast?

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Even though gold closed down $28.60 at $1,628.60 and silver closed down $0.20 at $30.73, Monday was a very good day for us bulls. Sunday night in the thinly-traded access market, gold hit a low of $1531.90 and silver was mugged down to $26. Quite a strong showing from that point on, I say.

The reversal is continuing as I finish writing the daily at 5:30 A.M. on Tuesday. The latest price for gold is now $1,675.70 and for silver it is $32.87. We still have a long way to go to get back up to a range that will make me comfortable, but since bottoming on Sunday evening, gold is up $144 (9.3%) and silver is up $6.87 (26%). It looks like the damage incurred by the latest margin increase by the boys over at the CME is behind us.

Are you still wondering why gold plunged so far and so fast? All you have to do is look at what happened to margin requirements over at the Comex.

Gold margins were rising 21%. In addition, silver margins were raised 18% and copper, 16%.

An initial position on a 100-ounce gold contract will cost $11,475 up front.

This is the third margin increase for gold since August. Put together, the increases have totaled 55%.

To say the game is rigged in favor of the large bullion banks, who are perpetually “short” gold and silver, is an understatement. BUT, as usual, the demand for PHYSICAL gold and silver increases in direct proportion to the size of the fall. It didn’t take long for gold and silver to come roaring back – now let’s see if the uptrend continues. The KEY $1,650 “Angel” set forth by Jim Sinclair has been passed and it now becomes “support”.

I checked with a few of the brokers and all of our wholesalers are back-ordered for at least three weeks on silver and can promise no better than a four week delivery. As you can see, the physical silver market is on fire. In each of the last four days our business is four times greater than normal. A lot of my readers are paying attention to what I write. This is THE best time to buy gold and silver that I have seen in a long while and you may never see bargains like this again.

The premium on junk silver bags is the highest it has been in over a year. Our wholesale cost is rising several times a day on silver (and less on gold). Try to imagine how difficult and expensive it will be to buy gold and silver down the road when precious metals become the favored asset class of the investment community. You will wait weeks or months to take possession of your metals and you will pay many percent above spot and be happy to get whatever you can. That day is coming.

Finally, don’t forget about Platinum. It is still selling nearly $100 an ounce BELOW gold. That is very uncommon. Platinum almost always sells at a premium to gold. It looks like a great buy to me.

 

 

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