In Sydney, Australia, on Friday morning, I was inside a bullion shop buying silver bullion when I looked over to the television screen on the wall reporting the financial news of the day. Silver prices had crashed to US$14 per ounce! At the time I didn't pay too much attention to it because I was busy focussing on my purchase.
Later in the day, I noted that the cause of the sudden drop in the price of silver was the result of a huge sell order, worth $450 million.
This Zero Hedge article, suggests the Japanese government is to blame, and it's linked to their bond buying efforts.
And the following explanation might move me into the tinfoil hat crowd, but I have watched the strong relationship between the Yen and precious metals for too long to believe it is a coincidence. Somehow, and I am not sure of the exact details, the Japanese government is using precious metals as part of their monetary policy. Now they might be doing it through the Postal Service Pension plan (GPIF) - after all, they have openly admitted to the BoJ buying JGBs from the plan, and the postal service pension investing in foreign stocks with the proceeds. There might be some sort of similar arrangement with precious metals. Who knows? I certainly don’t, but I just don’t believe this tight relationship can be explained by chance: