Silver comes crashing down

THE silver price slumped at midweek after a two-day rally that saw it reach an eight-year high.
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Silver futures topped $30 an ounce on Monday amid buying from retail investors. Comex futures dropped 9.3% overnight to $26.70/oz.
"In Metals Focus's view, the reasoning behind the push that the initial Reddit posts encouraged was poor. First and foremost, we do not believe there is systematic/structural naked shorting of silver (and gold) by leading bullion banks," consultancy Metals Focus said.
"We struggle to see logic in such behaviour and are confident that if it was truly taking place, we would have come across some evidence of it in our field research.
"We also believe that the size of the silver market makes cornering it - which is ultimately what the proposed co-ordinated buying hoped to achieve - extremely difficult.
"This does not mean that such efforts cannot have an impact on silver and other precious metals prices. As the past few days have illustrated, concentrated investor buying can certainly fuel strong rallies. These, however, are likely to be short-lived, in the absence of more structural bullish factors. In the current environment, given an already bullish silver outlook, Reddit-type investor campaigns, could also bring forward the forthcoming rally."
Gold was also lower midweek, dropping about $30 to $1838/oz after hitting a two-week high on Monday.
Miners weighed on the TSX as the only sector to fall. The silver sector slumped 17%, while gold miners were down 2.7%. US stocks rose by 1.4% and ASX futures were up 57 points.
At midweek, base metals were lower and iron ore was down for a third consecutive day.