Bill Murphy and Adrian Douglas on Midas tonight:

What a day! The US jobs report came in better than expected, which led to the usual Gold Cartel drubbing of the gold price. Gold was slammed down to $1237, a pretty good hit. Meanwhile over at the silver ranch, its price was hit pretty good too, down to $19.46. But, while gold struggled, silver popped right back to the $19.58 level, down only a handful of cents on the day.

About that time Adrian emailed me saying there were no silver deliveries yesterday, which had me instantly salivating. Twenty three years ago I was gearing up to make a play for the copper market after building a position for more than a year. The price had been stuck in a 55 cent to 60 cent range when the spreads between the contract months (contango) began to narrow. It might have even gone into backwardation, which means the front Comex months traded over the back months … indicating physical market tightness. Then one day in early May of 1987 there were NO deliveries, which got me jumping up and down and buying hundreds and hundreds of cheap copper options, as "the trade" thought copper was going to be dead price-wise because of the introduction of fiber optics. The Trade (the copper industry) forgot to take Asia into account. Well, copper roared from that day on, until the stock market crash, but then it went right back up, ending the year about $1.46 per pound.

I will never forget that day… NO DELIVERIES!

Adrian followed up shortly with this email…

Bill,

I sent this alert to Premium Subscribers of marketforceanalysis.com with silver at 19.54 this AM.

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There were ZERO delivery notices issued in silver yesterday. There were only 9 notices the day before. On First Notice day (Aug 31) there were only 292 issued against 3,002 contracts of Open Interest. This is VERY bullish.

This is another sign that a physical shortage is growing. The shorts have an interest to make deliveries quickly to stop paying insurance and storage fees on the bullion that they have sold through their short position. The fact that there is a dearth of deliveries is a big red flag. The price action is confirming this as silver is once again outperforming gold.

The cartel can not solve this problem with paper. A big move is close at hand.

Regards

Adrian Douglas