Today I looked at the opening premiums and there was
a $2.89 disparity in silver. I’m not talking gold. When spot silver was
trading in London at $29.61, silver actually traded at $32.50 (in Shanghai).
If you take an equivalent Comex contract, and I
realize spot isn’t Comex, but if you take an equivalent 5,000 ounce Comex
contract, that equates to a $14,430 premium per contract. I mean it’s
ludicrous. There are reasons why you may or may not have a premium in Shanghai,
but not to that extreme.
Shanghai (softened but) still closed at a $6,100
premium to equivalent Comex contracts. So what we’re saying here is that the
divergence has now become ridiculous. I mean these high and low closing
premiums literally illustrate the massive divergence between the paper market
(and the physical market).
And, Eric, this is on an exchange (Shanghai) that
within the next two years is actually going to become the world hub of physical
gold and silver trading. It’s going to have its own fixes. So I think they
(the manipulators) really pushed it a little too far today.
You’ve (also) got the short-selling algorithms, and
they have absolutely no or little if any input relating to the physical market.
So if this price turns against them, they are not going to understand why it has
turned. They won’t understand the fact that central banks have been buying 6,
12, 20 (tons of gold), and I still haven’t even got the numbers for today, but
there was very large physical take-up (today as well).
So when it (price) turns, they are not going to
understand what’s happened, they will just follow it. But the concern to the
bullion banks (here) is they are fully aware of the physical drain, and I
absolutely guarantee you that they are going long on this final stage of the
selloff.
Price up to now has really been assisted by (US)
government defense of the dollar in the over-the-counter FX gold markets, but
the central banks (out of the East) and the bullion banks are (now) jointly
buying this discount.”
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