Only one rational explanation behind Gold and Silver's fall on Friday. When the market is up big, money leaves GLD and SLV to go into Stocks. The market is obsessed with QE being drawn out another month or two. Pretty scary approach. What they fear they know will materialize, yet just put it off for a little while and they're enthusiastic. That is reckless investing. Reminds me of previous crashes.
I'm certain that the drop in silver price has drawn the attention of side line money, who've been waiting for this. I wouldn't be surprised if Soros and others were quietly buying or prepared to buy.
The Gold Silver Ratio is too high. I know bears chose to disregard this historic tool, but I sure don't. Silver is pretty cheap compared to Gold.
The cost to mine exceeds the price of silver. Production expectations are too high.
Recycle is down and will go down even more.
Record Mint Sales. Expect even higher demand after this flash crash.
Jewelry sales are up. Demand is higher.
The world population grows and with it demand.
World retail is buying.
The only real sellers are through the ETFs. The Sellers are Hedge Funds who are interested in one thing, what is a better trade today. Clearly they were right, the market is up big and PMs are down big. It will change.
Haven't heard of too many mines closing so far.
The mines try and survive by cutting cost and reducing spending to a minimum and increase tonnage to try and reduce their average cost,
Mine production will not go down until the weakest players go BK and mines start closing.
You have mentioned a retracement to the mean! What time scale is your mean based on?
Why it will change: The risk reward ratio in Silver is very high. The stock market will start to price in QE reduction and rotation will occur. Fundamentals are strong for Silver. Demand is high across the board, except for ETF redemptions, which have been draconian. Supply is questionable due to cost to mine and reduced recycle.
Technically a retracement to the mean can be expected. I can't predict another Silver Crash, but price favors buys at this level, if you have more than a one day approach. Accelerated buying could occur at the drop of a dime. Once it starts I expect Silver to retrace 50%. By then QE expectations would be solidified and the next bull run will likely occur. Catalyst would be rotation out of bonds and stocks into gold. A Hyper bull market could occur if focus is placed on the real issues.