from Harvey Organ's blog -

"Tomorrow is the big jobs number, and as usual, the bankers have decided to bomb gold and silver as a setup to this big monthly report."


http://harveyorgan.blogspot.com/

HOW do the bankers bomb gold & silver ?

I gather it has something to do with "shorts".

What is a short ?

Is it an offer to sell at a lower price, call it price "X".

Or is it some kind of paper contract, where, if the price does not fall, and the customer asks for delivery, the holder of the short has to buy the physical metal at the lower price ... which could be very expensive if the price spikes.

Also, what are the legitimate uses of a short ? I can understand a silver manufacturer wanting to make a contract to deliver at price "Y", which might be lower than the current market price. I can also understand a dealer like APMex sitting on 1 Million ounces of silver and wanting to protect themselves against a fall in price. So they buy an option of some kind. If the price falls, the option pays off. It the price doesn't fall, well then you're in the enviable position of having 1 million ounces of silver with a higher price, and your options are worthless.