keep saying silver is not for the faint hearted. But even by silver’s standards this past fortnight has been breathtaking.
The rally from $8 to near $50 has taken some 30 months. In just five trading days, as silver slid from $50 to $33, 40% of that rally was given back. It was the biggest weekly fall in silver since 1975.
Three days later, silver was up another 20% back near $39. Yesterday it was selling off again in a similarly dramatic fashion.
Talk about a white-knuckle ride.
They say the bull does everything he can to throw you off. But this one has an excess of testosterone or adrenaline or whatever it is that bulls have…
What drove the fall in silver?
Much of silver’s fall has been blamed on the fact that the owners of the Comex (Chicago Futures Exchange), CME, announced that the margin requirement on silver was to rise by 84%. In other words, if you were betting with borrowed money, you had to put a bigger deposit down.
This will no doubt have caused any leveraged traders to make a move towards the exit. This move quickly became a rush, which became a stampede. In total, five margin hikes were made in nine days.
Regular readers will know that I don’t have a lot of time for the various rumours you hear that suggest the silver market is manipulated. Not because I think they’re false – I don’t know – but because there’s not a lot I can do about it, except shout.