What Happened in Gold and Silver is Stunning

Today billionaire Eric Sprott told King World News that a staggering 500 million ounces of paper silver traded hands during the takedown in the metals this week. Eric Sprott, Chairman of Sprott Asset Management, had this to say about what took place the day of the plunge in gold and silver: “I can only imagine it’s the same forces that for the last twelve years have been at work in the gold market, trying to keep the volatility very large on the downside. As you are aware, we hardly ever get days when you get an intraday $100 rise in gold. When we look back at what happened (on Wednesday) we saw huge sell orders in gold and silver.”

Eric Sprott continues:

“When I look at the silver market in particular, in a 30 minute span we had sellers of 225 million equivalent paper ounces, in a market that in one year the silver miners only produce 800 million ounces. So again, it’s the paper markets overwhelming the physical market. It’s stunning to me that on a day like Feb. 29th we traded 500 million ounces of silver.

No rational person could believe it had anything to do with the real market for silver...

“That was all just on one exchange. God only knows what happened on the LBMA and the SLV and all of these other vehicles where paper silver is trading hands....

It was a smack down and unfortunately anybody who is running a precious metals fund (or invested in one) had basically all of their performance stolen in literally a one hour downtrend. It keeps investors uneasy and it’s unfortunate for a market that’s gone up for twelve years and has been the best performing asset over that time period.

James Turk always says, ‘It’s a managed retreat here. The price of gold and silver go up every year, but they don’t want it to get out of hand.’ As everyone is aware, on Wednesday, silver was breaking out, gold was approaching $1,800 and I just think it wasn’t allowed to happen because central banks try to keep control over precious metals so people don’t see them as an alternative to paper currencies.

All of this happens on the same day in which the LTRO lent out another $800 billion, which is just ridiculous. These things always seem to happen, Eric, sort of countertrend, that whenever you think something should go up, pretty well every time the price goes down. Because, the authorities don’t want a linkage between monetary irresponsibility and the price of precious metals going up. So they whack it on a day when it obviously should have gone up.”

This is a tremendous interview where Sprott breaks down exactly what took place this week and what to expect next in gold, silver and other key markets. The KWN audio interview with Eric Sprott will be available shortly and you can listen to it by CLICKING HERE.

Source: http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/3/3_Eric_Sprott_-_What_Happened_in_Gold_&_Silver_is_Stunning.html