Gold Market Wire (February 1, 2021) - It is well known in thePrecious Metals market that Silver is ripe for manipulation. Not thetype that is hyped usually – i.e. “JP Morgan has been sitting naked short on the market for years”, which we give zero credit to, but instead, the upside manipulation, like that of an un-nameable buy and hold equities magnate, as well as other the other small manipulations that occur every few years. The reasons are fairly straightforward. The Silver market is thin, it is prone to public hysteria (like now) and has a ready coterie of professional market makers/traders who love to juice things to the upside, and are pros at knowing when to turn and dump. COT is reknowned at this technique. (And we should like to mention that “spoofing”, while reprehensible to those who actually like free markets, doesn't really qualify as "market manipulation" proper - as it usually lasts for a few seconds or minutes only.)

Today's Reddit pumpers present the advent of a new breed of manipulators, outside of the professional trader class. They are elements of the public bundled together and, yes, they can be a force to be reckoned with in a thin market like Silver - that has the public on the edge of its seat. Are they “front-running” a real move in the market? Yes, they could be. Are they playing with fire? Definitely. Markets can turn quickly when the original pump turns to dump... and, it should also be remembered, law suits are America's favorite pastime. Are we likely to see more upside action in PMs over the next few years? That's likely.

But we choose to sit this one out. Following these type of moves (arranged on chat pages everywhere over the weekend) is almost always a fools errand. Here, your core position must suffice. Leveraging up with margin on moves like this, in a market as psychotic as Silver is a death wish. Runs like this almost always pull back.  But if you decide that “this is it”....a phrase almost always denotes the opposite...buy only in cash, and whatever size you decide on, cut it in half before you execute. We are up 8% in Asian trade this morning, and almost 20% in three sessions. The gap this morning is clear, no doubt, but this is not an orderly rally, and therefore, we remain suspect. Gold (a much deeper market), up a little over 1% - is not giving chase, in the slightest. If you want an example of an orderly rally, look at Wheat and Corn as examples.

Crazy markets demand caution.

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