*Silver prices have fallen 34% since Feb. 24
*The three major US stock indices all halted limit down
What a night after the Fed pukes all over themselves with an emergency rate cut and new QE program. The equities never bought in, opening limit down overnight. The metals opened up big and have slowly melted down all night. The first to break was silver, then platinum, and now gold is lower. They're liquidating any assets they have, even gold, silver, platinum, palladium. Last night the Twitter battle was on and today alone, silver delivery on the Comex exchange are down more than 17% in premarket trading to $11.77 intraday, with 54000 contracts changing hands.
There has been much talk about gold prices, but less so about the implosion of silver prices, which have fallen 34% since Feb. 24. While gold bugs thought that gold was going to $1,700. It may get there some day, but $1,456 is here in intraday. Platinum futures fell 20% to $562.10 and palladium futures fell 5% to $1,428 an ounce.
The stock markets futures contracts on the three major US stock indices all halted, limit down. That's despite the decision by the Federal Reserve on Sunday to cut interest rates to near zero and resume quantitative easing, policies that were strongly supportive for gold prices during the last financial crisis. Silver and gold fit into that plan, where people buy guns, food, bathroom supplies, maybe a generator. That’s their preparedness plan for a potential financial crisis.
The market and price action are ugly. As we have stated over and over again, gold is not a safe-haven play to equities; today it’s not a safety play for anything. We remain short across the board and will not be buying anytime soon. At this stage, we're almost sure recession will hit the global economy. The longer this virus stays, the more countries announce emergency measures, the more the lockdown period continues, the more sentiment will worsen.
(Disclaimer: This analysis is only for educational purpose and is not and must not be construed as investment advice. It is analysis based purely on economic theory and empirical evidence. Readers are requested to kindly consider their own view first, before taking any position.) Date: 16-3-2020