It doesn’t get the press of gold, copper or
even iron ore, but silver has gone crazy. Not since the Hunt brothers were
trying to corner the market has it been
so erratic – and on the strangest of excuses.
As Marketwatch reports the spot silver contract was up nearly 7% last night to $US12.56 an
ounce after diving 9.2% on Monday and plunging almost 14% on
Thursday. That’s a wild ride in any rodeo.
But stranger than the volatility is a key
excuse being offered for it: the launch of another commodity fund, specifically
a silver exchange-traded fund run by Barclays Global Investors. The price
plunge was put down to disappointment that the fund hadn’t kicked off or might
not need to purchase much silver when it does, while last night’s surge was on
expectations that it was about to start and would still have to purchase metal
If anything is an indication of a bubble,
this must be it. Barclays ETF simply buys silver and then sells shares
representing the silver to the public – hardly rocket science. It’s just one of a wave of commodity funds
making it easier for punters to play at the casino, but doing nothing else.
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Someone wake me when it’s over. In the
meantime, I’ll be preparing to melt down Aunt Flo’s candle sticks when the next
silver ETF launches.