Silver has now acted very well all year, even holding key support at $18, while gold plunged through its key support at $1140 yesterday and even $1120 at one point this morning. I asked Dave from Denver…

Hi Dave
What do you think is going on in silver? It is trading like a totally different market so far this year?
Do you think it could have anything to do with the CFTC?
B

Bill, that's a really good question. You know I'm completely skeptical that the CFTC will do anything on the metals. How can they w/out causing major pain to JPM? I've been wondering for the past few weeks if maybe some of these big hedge funds have been putting on a short gold/long silver trade to exploit the high ratio. That could be part of it. Also, as the price of gold goes higher, the "poor man's gold" aspect of silver will kick in and small buyers will buy silver over gold. I know my friend who is a local bullion coin trader told me yesterday that finding supply at the wholesale level and from individual sellers is hard right now. I also think the GATA doctrine that the physical market will overrun the paper market eventually is starting to have some influence.

On another note, JB has been referring to huge demand for gold in Japan. It hit me this morning that Japan's Govt is in at least as much financial trouble as the U.S. is and now the new Prime Minister is calling for a weaker yen. There's a lot of savings over there that can flow into gold and silver if the populace decides that it's time to run from the yen.

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Yes, it’s very difficult for me to believe the CFTC will do anything about JP Morgan. But perhaps the issue will surface in some way. Dracula can’t stand the light of day and neither can JP Morgan’s short silver position. If so, it could set off bells and whistles, which the CFTC might have to respond to.

Seems to me silver is GONZO if it can clear $18.75…