by Market Harmony » Mon May 30, 2011 10:55 pm
Precious metal speculators make their money in silver and hold it in gold. Silver is poor mans gold. It gets no respect. That is why we see volatility both ways. The BSD's try to outdo one another and not one of them ever wants to be holding the bag when the reversal hits. That's why gold is currently safer than silver. The fundamental reasons are thrown out the window when egos get involved. When egos get involved in micromarkets, then large swings occur as these big players increase and decrease their amount on margin. When the COMEX sees too many trades on margin, then they get scared and reel in the price by increasing the amount of cash that the BSDs need to put up in order to play with their buddies. This margin requirement just makes BSD's close out their silver trades.
This same situation does not occur in the gold market. It is actually bigger (more players), which makes these tremendous swings like we saw in silver only possible as a black swan event in gold... where all traders run simultaneously into a better store of wealth. (Is there one?)
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