Silver Starting Another Leg Down — Bull's Euphoria Remains Unshaken

Silver is down another 5-6% today, as I suggested it would happen during the past 3-4 days.
Here are a few quotes to show how much bullishness is not impaired.

At the same time, the USD has starting to rally, as expected. This could be the start of a major top.

(Yahoo Breakout — 11th of May) — Ryan Detrick, senior technical strategist at Schaeffer's Investment Research, brought his A-game back for another session of investable ideas. With so much attention being focused on the sudden cooling of the formerly-hot commodities markets, it seemed like the perfect place to start.

"I do not think the rally in commodities is over. If anything, this sell-off could be a buying opportunity," Detrick says. His confidence seems to be a cocktail, if you will, that comes in the form of one part part technical analysis, one part economic confidence and one part contrarianism. When you sum it up, you get a pretty potent case for things like copper, coal and precious metals.

While silver appears to have put in a short-term base after shedding half its value, it's far from clear how strong that base is or if another wave of selling by the so-called hot money is still ahead. Detrick argues that everyone knew silver was ahead of itself and overbought, but that the underlying story is still intact -- only at a better price again.

And from ZeroHedge who adopt a hyper-inflationist point of view every time they get the opportunity:

(ZeroHedge — 10th of May) (Bloomberg) -- UBS AG’s gold sales to India so far this year are more than 10 percent higher than in the same period last year, the bank said today in an e-mailed report.

(Bloomberg) -- Gold could break through $1,600 an ounce in the next six months, Mark Cutifani, chief executive officer of AngloGold Ashanti Ltd., the world’s third-largest producer of the metal, said.

“We think the fundamentals are even more robust than last quarter,” he told reporters on a conference call today.

(Bloomberg) -- Silver, which plunged 27 percent last week, still is poised to climb to the “very important” price of $50 an ounce by the end of the year, according to technical analysis by Bank of America Merrill Lynch.

“You’re still in an uptrend, despite the sharp sell-off” as shown by an intermediate-term trend from the lows on Aug. 24 and Jan. 28, Mary Ann Bartels, the head of U.S. technical and market analysis at Merrill in New York, said yesterday in a telephone interview. “The uptrend was not broken.”

Note that Silver and Gold production are increasing, so whoever still believes we are running out of silver must be mad.

(Bloomberg) -- Gold output in China gained 27 percent in April from a year ago to 61.1 metric tons, according to data released today by the statistics bureau. Silver output increased 2 percent to 930.6 tons, it said.

(Bloomberg) -- [...] “I’m bullish on gold despite its current levels,” Hal Lehr, Deutsche Bank’s managing director for cross-commodity trading, said in an interview in Buenos Aires. “It could reach $2,000 an ounce in the next eight months.”

(Reuters) - [...] "Gold is generally benefiting from the return of confidence from investors," said Darren Heathcote, head of trading at Investec Australia. "They are very happy buying on the dip, as we see the same old problems hanging around."
[...]
Silver prices plunged more than 25 percent last week and gold nearly 5 percent, prompting buying in the physical market in Asia, dealers said.

"We saw buying when gold dipped below $1,500 from China, India and Indonesia, but not much scrap selling, as people are still bullish on gold," said a Hong Kong-based dealer.

Full disclosure: I bought some puts on the AUDUSD a few hours ago when the AUD was around 1.0850... Wait & Pray