“It’s too early to tell whether the speculative silver edifice has toppled over, but there’s at least a fair chance that it has. From what I hear, the silver smelters are busy melting down silver trays, silver tea sets, silver knives and forks, anything the public can dig up in the way of silver.

The public seldom gets it right, but this may be one of those rare instances when the public’s reaction to new highs and a towering parabolic structure is correct. “ Richard Russell Dow Theory Letters

Soros, Other Hedge Fund Managers, Dumping Precious Metals

It’s been a horrid week for silver as three margin requirement increases in just over a week, along with the bursting of the speculative fervor seen last week, looks to have pushed silver over the edge (for now). The WSJ is reporting this morning, that some prominent hedge fund managers – led by George Soros – have been dumping the metal. Recall Soros said “gold is the ultimate bubble” in January 2010 … only to have it be revealed in his next fund disclosure that gold was amongst his largest positions. [Feb 17, 2010: George Soros Calls Gold a Bubble, then Stocks Up On It] Not a coincidence as money managers now have to expect Fed induced bubbles, and play them – with everyone assuming they can get out at the door, once the music stops. It appears the parabolic move that silver enjoyed the past few weeks – after a steady climb from August 2010 when Bubble Bernanke declared he is adding inflating asset values as the Fed’s third mandate – Soros (and a few others) decided the music was stopping. At least for now.

For silver and gold bulls the news is still positive. Infamous John Paulson says gold is headed to $4000 …

Via WSJ

• Silver prices plunged, suffering their worst one-day drop in dollar terms in three decades, as investors fretted that rising trading costs could cripple a market exhibiting signs of froth. Silver’s fall of $3.50, or 7.6%, and a 1% drop in gold prices Tuesday came as some major investors have been selling. George Soros’s big hedge fund, a firm operated by high-profile investor John Burbank and some other leading firms have been selling gold and silver, according to people close to the matter, after furiously accumulating precious metals for much of the past two years.

….read much more HERE