After an absolutely awesome crest, the silver wave has collapsed.
In surfing vernacular, the action is referred to as a plunger - “Plungers occur when the wave collapses in a short period of time. The energy release is sudden and can be highly dangerous."
Here is a photo (courtesy of Kitco) that depicts the damage done thus far...
This evening, at 8:49 pm in New York, the bid price for spot silver touched $56.99. More damage could be ahead, as the potential for spillers exists, which can release energy more gradually but still in a negative fashion.
GOLD BOAT CAPSIZES
Heavy damage was inflicted on others in the immediate vicinity of the killer wave. A large boat of gold traders was capsized, but reports indicate there are fewer casualties and the damage, while heavy, appears less severe than that suffered by the silver surfers...
ANALYSIS AND COMMENTARY
Both silver and gold are in the throes of an unwinding that is mostly attributable to a reversal of previous excesses. When you ask someone about the fundamentals for either of the two metals, the common answer includes lip service to snippets about gaps in consumption vs. supply, the Fed and interest rates, revaluations (repricing) to "absorb" debt loads, etc.
Unfortunately for those who bought at higher prices, those same "fundamentals" aren't keeping the sinking ship afloat. Talking about them now might assuage hurt feelings after the fact, but it doesn't restore price losses of 30-50 percent.
Investors are price-conscious and fickle. They are usually not interested in value. They want to know when the price of something is going up, and by how much. Sometimes they want to know the reasoning, i.e., why. The 'why' is mostly an afterthought. Usually, 'why' enters the conversation after the price goes down when it was expected to go up.
That is when investors and their advisors start talking a lot more about fundamentals. Since the fundamentals they talk about don't always apply to gold and silver, whatever logic they use tends to be faulty because it is based on incorrect assumptions. This leads to unrealistic expectations.
Some of those unrealistic expectations were fulfilled, albeit temporarily, when silver surpassed $100, and gold exceeded $5000. The aftermath can sometimes reverse the entire excess of those unrealistic expectations.
How much of silver's leap from $30 to $120 in 9 months was unrealistic? (see Do the Fundamentals Justify $100 Silver?) How much of the gold price increase from $3500 to $5500 in 5 months was unrealistic? (see New Closing Low for Gold - Again)
Kelsey Williams