Summary
Most recently JPMorgan has been rapidly accumulating silver bullion.
The other big player, SLV, has been reducing its silver holdings. However, this week SLV added vast amounts of silver.
The paper silver market (silver futures) is overcrowded now - the total open interest stands at its highest reading in history.
In this article I am trying to explain why JP Morgan is hoarding silver and what it means for investors.
In my previous articles I emphasized that the silver market is very hot now. Interestingly, although this week the prices of silver have been going strongly down, the physical silver market is sending very intriguing signals. Let me discuss these fresh developments.
Silver prices
Since the beginning of this week silver prices have gone down by 2.9% (at the time of writing this article silver is trading at $17.44 per ounce). In other words, silver prices continue their downward trend that started on April 17.
During that period (April 17 - today) the silver / gold ratio have been following silver prices and now the ratio stands at its strong support at around 1.39:
Source: Simple Digressions
In my opinion, the pattern drawn by the market is typical for a bear market or a correction in precious metals prices.
Now, during bear markets or corrections in precious metals prices the investors are cutting their silver holdings. However, not this time.
The silver bullion market is sending bullish signals
Everybody knows that JPMorgan (NYSE:JPM) is an active player on the gold and silver markets. What is more, there are many conspiracy theories on JPMorgan manipulating gold and silver prices. Well, I do not want to discuss these theories. My articles are based on facts and figures so let me show a few interesting figures.
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