ed steer may not be convinced that the open interest going up while the price of silver is going down implies short covering, but it makes a lot of sense to me that the shorts are taking their profits while they can. i don't do short term predictions, but for the long term, this looks like a good entry point for silver, and just about any stock that has the word silver in its name. it will be interesting to see if the silver etf has better luck getting its hands on physical silver than the rest of us.

From Ed Steer:

The gold price flat-lined throughout the Far East until 3:00 a.m. New York time, when a gentle sell-off commenced. This continued until the boys in New York showed up for work, where it rallied until London closed for the day...and that was the end of that. The silver chart had virtually the same pattern as the gold chart...you could almost overlay the two...or mistake one for the other. As I've said in this rant before, silver is a precious metal that just happens to have huge industrial uses. The fact that gold and silver have the biggest net short position of any commodity on the Comex should confirm that for anyone who has a modicum of intelligence.

The changes in open interest in on Wednesday's big up-day in both metals are as follows...gold o.i. rose 5,480 contracts and silver was down 772 contracts. Silver was up 29 cents on Wednesday and o.i fell? Is someone short covering? We'll find out next Friday...not today.

Is the correction over? I'd bet yes, as the boys would really have to hammer the prices down past the previous lows of a few days ago to get any further tech fund liquidation. Neither Ted Butler nor myself feel that they've got what it takes to get it down more than we've already seen.

In silver news, the silver ETF did not liquidate one single ounce of silver during the $5 drop in price we just had. Here's what Ted Butler had to say when I asked him about the ETFs in an e-mail exchange we had yesterday afternoon...."The ETFs have been interesting though. GLD has held firm as far as holdings, with no decline during the sell-off this week, which is unusual. SLV has not only held at record levels, but added 2.5 million to a new record yesterday. Looks like more may be added soon as a result of volume last couple of days." It's a good bet that SLV is having real trouble getting enough silver to meet its obligations. This is something I intend monitor carefully from now on.