The Real Reason Silver Price Collapsed Today

Over the last month, silver price has been trending higher, but that is clearly not the case today. The markets are reacting to something big, and we're going to get into exactly what's going on right now. New to buying gold or silver, SD Bullion makes it simple with no order minimums, clear pricing, and discreet shipping. Trusted by hundreds of thousands, sdbullion.com, where America buys physical gold and silver. Thank you so much for watching. I do sincerely appreciate it. Today is Friday, August 28th, and we have some massive news to cover. Let's start off with silver. It's currently sitting at $67.59. It's down $2.21 or just over 3% on the day, but look at these swings. It went all the way up to $71 an ounce and then dipped to 66. That is some massive volatility. Let's take a look at gold. Gold is also down for the day, currently sitting at $4,490. It is down $122 or 2.65%. And let's look at the gold silver ratio. It is moving slightly higher because silver is moving down faster than gold. One other thing that I want to point out is that the strength of the dollar exploded higher today right at 10 a.m. Eastern. So what exactly happened to cause this? Well, Fed Chair Kevin Warsh spoke today at Jackson Hole. Look at this headline. Fed Chair Warsh signals rate hikes may be needed with U.S. inflation stubbornly elevated. And listen to this clip of him speaking this morning. So here is my standard. We must be confident that underlying inflation is moving to our objective clearly and at sufficient speed. Otherwise, we have work to do. That's our job. That's our mandate. And that's our charge to keep. As you can see here, the markets responded negatively to the idea of a rate hike. And it seems like the market is trying to price one in currently. If we take a look at CME Group's FedWatch tool, you can see they are now predicting a 60% chance that rates will go up at the next meeting on September 16th. Just a 40% chance that rates will remain the same. So with the meeting just a few weeks away, the markets do not have a lot of time to digest the information that was put out today. The CEO of the Scottsdale Mint shared this on X Today. Warsh gave no explicit signal on the timing or direction of the Fed's next rate move, which is true. The markets might be reading into what he said a little bit too much. MBA Economics shared this. I'm listening to the speech myself. He has said a whole lot of nothing. He is monitoring the situation, rest assured. Just words, no action. More inflation is coming. I can see through his words. The Federal Reserve is trapped. They can't use any tool to fix the bond market or the economy. Buy the dip in gold and silver like your life depends on it. The U.S. dollar will be unrecognizable in the coming years. And Peter Schiff shared this today. Warsh admitted 65 months of high inflation are the Fed's fault, yet failed to acknowledge the government's shared responsibility. Despite tough talk on inflation, his failure to mention the soaring national debt or Treasury's operation twist shows he won't do anything to rein it in. And when we look at the U.S. national debt, it is quite troubling. You can see it. We are now over $40 trillion in debt. And if we go back in time just 10 years, you can see that the U.S. national debt was less than half of what it is right now. So it is doubled in a decade and it's growing at a faster and faster rate. One interesting thing to note is that if the Fed does decide to raise rates, then the national debt is going to get more expensive. Take a look at this graphic here. The Fed raises rates, Treasury yields rise, debt rolls over, interest bill jumps, deficit and debt grow, which by the way is compounding. I think it's safe to say that at this point, the Fed is trapped between a rock and a hard place. And if they decide to continue to fight inflation by raising rates, this is going to have the trickle down effect of raising the national debt. And ultimately, this death spiral only has one inevitable ending. And I'll tell you what, it is not good for the dollar. So for now, the dollar does appear to be strong. And this is weighing heavily on the markets, especially gold and silver. But long term, I think things will be much different. Rashad Hajiyev posted this on X today. After today's false breakout, which was a bait, we know post fact silver went on to form a breakdown. After all this calamity, I expect buyers to push silver back into formation ASAP. Today's false breakdown is likely going to be a catalyst for silver's rally to $79 mark by early September. He also said the gold to silver ratio is trading within a bearish ascending triangle. It could be about to go down to 62 with horizontal support around 52. So what would that mean for precious metals prices? Well, if gold is at 4.9 thousand and the ratio is 62, silver price should be around 79, which is in line with what he said earlier. And if gold goes up to 5.2 thousand and the ratio goes down to 52, silver price should be around $100 an ounce. That could be on the horizon for next month. And by the way, even when silver hit its absolute low during the recent 55% correction, it did not even touch the parabola. And if we turn back the clock just one year, as James Anderson points out, silver was grinding out the 30s, about to break into the 40s, we were so excited for it to hit 50, and spot gold was like 3300 an ounce. Spot gold silver ratio was near nosebleeds in the 90s. We are in a much different place today. One other thing that appears to be going on right now is that the premiums in Shanghai are back. Look at this post here, Shanghai silver premium surges above $9. Silver prices rose to nearly $80 an ounce in Shanghai Thursday evening. And by the way, they were also right around $80 an ounce today when silver surged up to 71 here in the US. So this is something that we did experience when silver was going to that all-time high when silver was above $100 an ounce earlier this year. We saw massive premiums for silver in the east that is starting to come back now. So I think this could be a signal for higher gold and silver prices. And like I've been saying for a while now, I think silver could go back to that all-time high that we saw earlier this year and even surpass it going as high as $150 an ounce before the year is over. So while gold and silver are moving quite a bit lower today, I think it's certainly possible that this could be short-lived after the markets have had time to digest everything that Kevin Warsh said at Jackson Hole. And if for some reason there is no rate hike in September, we could see gold and silver explode higher. And by the way, I recently put out a video over at Harry's Coin Shop talking about how stackers are dumping their silver right now. If you want to check out that video, I highly recommend it. It's one of my most viewed videos for the year. I do want to say thank you so much for watching and I will see you all in my next one. Silver Dragons out.