forced sales by hedge funds have been a popular explanation for the price declines in silver and gold. no doubt this deleveraging is part of the story, but not all of it. the manipulation via short sales on the comex is still alive and well. this is from ed steer:

In the bizarro world of open interest we live in these days, the huge smash-down in gold and silver on Thursday produced an increase in gold open interest of 8,016 contracts! So what's all this nonsense in the press about gold falling because of "fund liquidation" on Thursday? This is the sort of drivel that passes for intelligent gold commentary these days...and it's pure BS! Silver o.i. was up 81 contracts on its big losing day. There are only three reasons why open interest rises: 1) a long position being placed, 2) a short position being placed, or 3) a spread trade put on...long one month, short another month. (A spread trade means nothing in a COT report, as the trade is by the same entity...and this entity holds both sides of it.)

Now for the latest Commitment of Traders report. Despite the best efforts of the '1 or 2' US banks in bashing silver, they were only able to improve their position by 2,658 contracts...and this they did by covering 2,451 short contracts and going long another 207 contracts. And after the great thrashing laid on the metal since the Tuesday cut-off (see graph above), one would think that the big Comex shorts have improved their positions even more. It's been many years since I've seen a silver COT report that looked like this. It's absolutely amazing. These have to be pretty close to the lowest numbers on record. I hate to say it, but I hope the boyz can keep a lid on the silver price until after this Tuesday's cut-off, because next Friday's COT will be another sight to see.