Chinese Speculators Set the Stage for Gold and Silver Crash (1)

In the history of the silver market, prices had traded above $40 an ounce for only a handful of brief periods before last year. On Friday, exhausted traders watched in shock as the precious metal plunged by that much in less than twenty hours.

For weeks, traders across the metals world have spent their nights glued to screens as prices for everything from gold to copper and tin seemed to break free from the gravity of supply and demand fundamentals, spurred higher on a wave of hot money from speculators in China.

And then, in just a few hours, the ...