Silver did something it rarely does last night … leaping up 15 cents with gold fairly quiet. It was noticeable. After falling back to the unchanged level once Comex opened, it moved up steadily right off the bat … and actually led gold higher. It also took out a downtrend, which should set up a move to $14 and $14.50 as a first objective….

May silver
http://futures.tradingcharts.com/cha...

As mentioned here time and time again, silver "The Mule" is like no other market out there. It will make its move in its own good time. After stubbornly acting lousy for a very long time, the price can suddenly go berserk and move up $3 in one swoop. If the major short, JP Morgan Chase, gets spooked, look out above. We will see that swoop, as they will have few sellers to handle their shortcovering bids. In essence, they can be trapped.

And some comentary on the latest GFMS report:

Try not to laugh when reading this next quote….

QUOTE

In the case of silver, the OTC market offers an additional advantage to investors. Specifically it provides them with an avenue to tax free silver, in countries where physical purchases are taxable. For instance, in Europe investors can accumulate silver free from Value Added Tax, as long as the metal is in the form of unallocated as opposed to allocated metal accounts. As a result, many players who, were it not for the tax considerations, would normally purchase physical silver, are drawn into this segment of the market to avoid paying tax, at the expense of somewhat higher counterparty risk.

END

You probably failed not to fall off your chair laughing. The OTC market apparently allows you to accumulate non-existent silver so as to avoid paying VAT which is only levied on real physical silver. So the Cartel can manipulate markets with virtual silver and not even have to pay tax. How convenient! Apparently though owning exotic paper derivatives that are somehow related to silver have a "somewhat higher counter-party risk"!!!!

The "experts" at GFMS omit to mention that the OTC derivatives market for contracts of maturity of less than one year is actually considerably bigger in dollar value than all the silver mined annually in the world…now calling that "somewhat higher counter-party risk" is like saying that stepping on a land-mine can cause you some inconvenience!

GFMS goes to great lengths in the report to extol the virtues of silver ETF’s. Considering their not too well disguised antagonism to silver it would be fair to conclude that silver ETF’s are not 100% backed by silver. This is how they describe ETF’s "Silver ETFs are essentially securities that are listed on stock exchanges, which are fully backed by positions in allocated metal". "Positions" in allocated metal!! What sort of nonsense is that? A "position" in something sounds like some sort of trade…a derivative perhaps? One of those wonderful derivatives that don’t require you to pay any VAT for example?

Nowhere in this supposedly world class authoritative report (according to GFMS!) do they mention Goldmoney.com. Could it be because goldmoney.com holds 100% allocated metal for its customers audited by a third party?

GFMS has something of note to say about silver leasing

QUOTE

Facilitated by the wider revolution in the financial services sector and fabricators’ desire to remove the cost of silver stocks from their balance sheets, the amount of silver on lease exploded during the 1990s and the first part of this decade. From the perspective of flows of privately owned bullion stocks, a gradual change of ownership has taken place: stocks that were previously owned by the industry have been unwound, passed to, primarily, investors and then borrowed back. The fact that, in contrast to the gold market, where the bulk of liquidity is provided by central banks, most silver lending is sourced from private sector stocks