Political Metals (PMs)

Spot silver surged to an all-time high of $49.79 per ounce in the international market, surpassing its previous all-time nominal high of $49.45 in 1980. Going into the COMEX, it was taken down to $45.66, did  v-shaped recovery and then to a low of $44.62 during far East trading hours. Within 24 hours, it moved $5.17 or 10.5% off its all-time high.

At the COMEX,

Silver had its biggest volume day in history yesterday…a fact that should surprise no one with the way the price action unfolded. Net of all roll-overs, silver traded 134,000 contracts yesterday…the first time that it has traded more contracts than gold…ever.  Ed Steer

With gold & silver near their all-time highs, silver still in backwardation and the FOMC meeting this week, extreme volatility (in both directions) is to be expected going forward, and holders or potential holders of physical silver will do well to avoid thinking of your silver holdings as an investment.

Volatility & counter-intuitive price actions are the order of the day for any holders of gold & silver. When you see an apparently “unexplainable” price movement in gold or silver, it’s when you have to start viewing them as Political Metals to be held and owned rather than Precious Metals to be invested in.  Otherwise, you’ll either never get on-board the PMs bandwagon, end up loosing lots of sleep if already on-board, or worse still, doing the unthinkable – sell in a panic during a bull market hoping to buy back lower. >> More

With these extremely volatile moves, it’s timely to check out how analysts from both sides of the Political Metals divide are reading into the markets. Read Two Sides of a Coin.