Volatility on Gold & Silver at 30 year highs

I would advise extreme caution to anyone trading Gold/Silver right now. Volatility has peaked in recent weeks at records not seen since the 80's. Silver has been trading in a $5 range (5000 ticks) since last night. Gold's been trading in a $130 range (1300 ticks). I'M not even messing with futures right now. I was tempted to sell a Gold contract when it dropped to $1700 last week but because there's so much damn volatility and uncertainty in the marketplace, Gold could've easily risen back to the $1800's today.

For the long-term investors, you should be buying these dips. Investors sitting on the sidelines a month ago were dreaming of a sell off. Well now it's here; take advantage by buying the physical bullion and not just paper contracts.

So here's my take on the recent selloff. I don't think this was a correction, I don't think there was a manipulation, I don't think that metals were overbought, and I don't think the metals are now in an intermediate bear market. I've been thinking of the absolute worst case scenario for every human being on the planet but I didn't want to believe it until now, and that's a liquidity crisis like the one we had 3 years ago. During the last liquidity crisis everything tanked. It was a race to 0. No financial firm wants to deal with counter party risk at all and that includes futures contracts on Gold/Silver, not physical bullion but the paper contracts that determine their everyday spot prices. You have to remember that everyone trading futures are trading on margin. So in the event of a liquidity crisis, in essence a run on all assets, the major players will all want to liquidate. Example: GS and UBS are both traders in the Gold pit. Everyday they play against each other on the trading floor. GS is short one day and UBS is long another, vice-versa vice-versa. They've been doing business with each other for years. All of a sudden the news (rumors) comes out that UBS is insolvent; GS happens to be holding paper contracts from UBS at the time. GS doesn't want to wait or risk to see if UBS really has the cash to settle up on their contracts, therefore GS simply liquidates (sells) all of the Gold positions they've been holding. THAT'S how you see a $400 correction in Gold in a matter of 2 weeks. I believe this is taking place now amongst firms all over the world. Numbers released from Greece/Europe keep getting worse, week after week. They are prepping for a freeze/default in the marketplace but have no idea when/where the breakdown will occur but they speculate it will happen soon. I wish these clowns in Europe would just figure out a way to tell the market what they plan to do already. The sooner they restore confidence to the marketplace, the sooner Gold will start treading back to $2000/oz.