Metals Meltdown...

The high-to-low range of silver today was 20%. A bit of old-style volatility, to put it mildly... The contagion effect spilled into gold, palladium, copper and a few other base metals. This was to be expected, as there was virtually no short base out there (to provide short-covering support), and, consequently, any long liquidation, given the stellar performance of these metals year-to-date (silver being up well over 50% YTD until this morning), would have been met by nothing but empty air.

Nobody and I mean nobody can tell me that they reaaally know the fundamentals of those metals. It's just a pure speculative thing of hot money chasing something quite illiquid and in limited supply. These markets are therefore very prone to corrections like this and while one can make the usual "China argument" about "every metal" going through the roof, one needs to be careful and see at what price one is buying all these volatile commodities. Otherwise, it's just a greater fool's bubble -- of the 90s-Internet-type. Caution is needed, as the market taught a painful lesson to a lot of overly-exposed commodity funds today.