The brutal selloff in silver continued Thursday, bringing its four-day decline to 25%.
Thanks to rising margin requirements at the CME, silver was already in retreat (as Breakout has covered earlier) when The Wall Street Journal delivered a body blow Wednesday with its report about precious metals selling by George Soros, John Burbank and other big-time money managers.
Of course, there's two sides to every trade, and WSJ reporter Greg Zuckerman reports on the "showdown between guys like Burbank and Soros who are much more bearish, and guys like John Paulson who are holding on [to metals] and own a lot of it."
Zuckerman further notes a difference of opinion between the newly minted bears. Whereas the team at Soros Fund Management (led by Keith Anderson) believe the Fed will act soon enough to cut off inflation and are making more of a strategic sale, Burbank is convinced gold and silver are good long-term plays. "He's paring down and a will come back in later," Zuckerman says.
Meanwhile, Paulson is "much less convinced the Fed will be able to cut short inflation," he says. The WSJ reports Paulson still has most of his personal money in precious metals; earlier this week, the fund manager predicted gold will hit $4,000 an ounce in the next three to five years.
If he's right, this recent pullback in gold and silver is the buying opportunity of somebody's lifetime.
What are your thoughts on the selloff in silver and other commodities? Let us know in the comment section below, or send an email to email@example.com.
- John Paulson
- Soros Fund Management
- precious metals
- George Soros
- Keith Anderson