I said I wasn’t going to produce content today, but then the most blatant act of market rigging transpired last night, impacting silver particularly, and so here we are.
On Thursday night, the entire trading platform of the Chicago Mercantile Exchange (CME) went down. The excuse given was that the triply redundant cooling systems for the servers all failed.
Besides being a very unlikely and exceedingly rare event all on its own, it was the timing of the shutdown that raised a lot of eyebrows. It happened precisely at the moment silver powered past its old high point.
And then, right after that, a big sell program was initiated in the London physical silver market, dragging silver’s price down by more than a buck in a few minutes.
My main hypothesis is that the silver market was in complete disarray, somebody was blowing up, maybe even the entire silver market structure was breaking down, so they pulled the plug to buy time to sort things out.
Well, if the intent was to signal to the other market makers that the CME ‘had their backs’ and that it was time to slam silver, that message did not land. Worse, it may well have backfired:
From a longer-term perspective, silver has nothing but air above it now.
As I’ve long said, my expectation is that for silver and gold (and probably the other PM’s too) will be “before and after” stories.
by westcoastjan