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Gold & Silver Snap-Back from Sharp Lossesby Peter A. Grant
May 20, AM 
Gold fell in overseas trading on Monday, led by silver which plummeted to new 2-1/2 year lows. There were indications from Asia that an "unidentified investor" sold a large amount of silver when the CME's Globex platform opened. The CME Group later confirmed that silver trading was halted four times overnight.So another big sell-off, perhaps perpetrated by a single large seller in the paper market. Sounds hauntingly familiar. The following was posted at the ZeroHedge blog early in Asia: Not a moment after someone was slammed with a massive margin call following the hit of 102 USDJPY stops as we noted moments ago, was that same someone(s) forced to dump a whole lot of silver in thin, no volume trading taking out the entire bid stack on what can only be described as "get me the hell out and pay me anything" liquidation, sending the precious metal to just over $20, before yet another round of buying programs kicked in, and sent it right back up, allowing those quick enough to capitalize on some foolish macro trader's blowing up to pocket a huge profit before Japan has even woken up.The dive in silver pulled the gold market down to within striking distance of the mid-April low at 1321.22. However, as ZeroHedge suggested, prices didn't stay down there for long. Both silver and gold snapped back sharply. By mid-session in New York, silver had staged nearly a 10% rally from the $21.16 low set overseas, regaining the $23 level. Gold losses stalled shy of the 1321.22 support level and then rallied all the way back to $1399.60, an intraday rally of more than $60 (4.6%). This comes on a day when the U.S. debt ceiling is put back in place, following a brief suspension. While Treasury thinks that they can get us through the summer by employing extraordinary measures, the gold market has fared pretty well generally speaking as the world has limped from debt crisis to debt crisis. Perhaps today's volatility is the metals market acknowledgement that we still have a major debt problem on our hands, and it simply is not going to go away. NEWSLETTER SIGN-UP Opinions expressed in commentary on the USAGOLD.com website do not constitute an offer to buy or sell, or the solicitation of an offer to buy or sell any precious metals product, nor should they be viewed in any way as investment advice or advice to buy, sell or hold. USAGOLD, Inc. recommends the purchase of physical precious metals for asset preservation purposes, not speculation. Utilization of these opinions for speculative purposes is neither suggested nor advised. Commentary is strictly for educational purposes, and as such USAGOLD does not warrant or guarantee the accuracy, timeliness or completeness of the information found here.
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