'Pick a Number' on SILVER as Shorts Set to BURN in 'Unstoppable' Rally: Ed Steer

Key Concepts

• Wash, Rinse, and Spin Cycle: A recurring market manipulation tactic where large commercial traders (the "Big Eight") artificially suppress prices to force speculators to liquidate long positions and cover shorts.
• The Big Eight: The eight largest commercial traders on the COMEX who hold massive short positions and are accused of manipulating precious metals prices.
• Bonfire of the Silver Shorts: A term coined by the late Ted Butler describing a scenario where short-covering becomes a self-reinforcing, parabolic rally, potentially leading to triple-digit silver prices.
• COMEX: The primary futures exchange in New York where global gold and silver prices are currently set.
• Physical vs. Paper Market: The disconnect between the price of physical metal (often trading at high premiums in China/India) and the price of paper futures contracts on the COMEX.
• Good Delivery: The standard for gold bars acceptable in international markets; Steer notes that much of the U.S. gold reserve may not meet these standards.

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1. Market Manipulation and Price Suppression

Ed Steer argues that precious metals markets have been disconnected from reality for decades due to systematic intervention.

• Mechanism: The "Big Eight" commercial traders use the COMEX futures market to "slice the price salami" to the downside. By hammering prices, they force non-commercial traders to "puke up" their long positions.
• Current Status: Steer notes that the Big Eight have covered 43,000 short contracts in silver and 88,000 in gold since early 2024. He believes their short positions are at record lows, setting the stage for a massive, unhindered rally once they stop suppressing the price.
• The 200-Day Moving Average: Steer is closely watching the 200-day moving average for gold. He suggests the "powers that be" may attempt to push gold below this level to trigger further liquidation, which he views as a "mother of all lows" buying opportunity.

2. The Shift to Eastern Markets

A central theme is the transition of commodity pricing power from the West to the East.

• Shanghai Premiums: Physical silver in China has recently traded at a 10% premium (and as high as 18% in the last six months). Steer clarifies that this is not due to VAT, but rather a reflection of massive physical demand in China and India that the paper-based COMEX price fails to capture.
• Future Outlook: Steer believes that once China successfully wrests control of commodity pricing from the West, the manipulation will end because the Chinese market is based on physical supply rather than paper derivatives.

3. Geopolitical Instability and the Dollar

Steer views the current global conflict as a struggle between a "declining West" and a "rising East."

• De-dollarization: The BRICS nations are actively seeking to exit the "Pax Americana" financial hegemony. Steer views the conflicts in Ukraine and the Middle East as part of the West's attempt to maintain control over a shifting global order.
• Straits of Hormuz: Steer describes the current war as "perpetual" rather than a conflict meant to be won. He warns that if the Straits of Hormuz remain restricted, global energy prices will face severe upward pressure once current reserves are depleted.
• Bond Market Intervention: Steer argues that the 10-year Treasury yield is being artificially capped at 4.50% because the U.S. cannot afford the interest payments on its $40 trillion debt. He asserts that in a free market, rates would be significantly higher.

4. Gold Reserves and Audits

Regarding the potential audit of Fort Knox:

• Skepticism: Steer believes an audit is unlikely because the "powers that be" will not allow it.
• Quality Concerns: He notes that much of the U.S. gold is not in "good delivery" form (it consists of coins from the 1933 confiscation) and that an unknown portion is likely encumbered by leases or swaps.

5. Mining Stocks and Investment Strategy

• Underperformance: Steer notes that mining stocks have been "hinky" and have not tracked the price of metals as expected. He suspects these share prices are also being managed.
• Valuation: Despite the manipulation, he considers major and junior producers to be "real bargains," trading at a fraction of their true value.
• Advice: He encourages investors to ignore the "rigged game" narrative and focus on the long-term reality: paper currencies are failing, and the rush into hard assets is "unstoppable."

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Synthesis and Conclusion

Ed Steer’s perspective is that we are in the final stages of a long-term fiat currency experiment. He maintains that the current price of gold and silver is a "total hallucination" maintained by artificial interventions. The key takeaway is that the "Big Eight" commercial traders have significantly reduced their short exposure, meaning the next major rally will likely not be met with the same level of suppression. He predicts a "three-digit silver price" and $10,000 gold, not as a result of mere speculation, but as a necessary correction to the structural deficits and the inevitable collapse of the current monetary paradigm.