ed steer comments on the commitment of traders. the set up for silver has not been as favorable since it was under $5/oz.

I was really delighted with the Commitment of Traders report a week ago Friday...but when the new one was released yesterday, I was amazed at how much things had improved since then. The bullion banks in the Commercial category improved their net short position in silver by 4,903 contracts. They did this by covering 2,242 shorts and going long an additional 2,661 contracts. They accomplished this at the expense of both the Non-Commerical tech funds and the small traders. The tech funds pitched 1,036 long positions and went short an additional 2,245 contracts, for a total change of 3,081 contracts. The difference came out of the Non-Reportable category (small traders)...where their net long position was reduced by 1,622 contracts. Total silver open interest fell 2,723 contracts (to 95,873 contracts) for the week which ended at the close of Comex trading on Tuesday the 21st.

In gold, the bullion banks in the Commercial category decreased their net short position by a very substantial 16,950 contracts. This they did by covering 8,838 shorts and going long an additional 8,112 contracts. Once again it was the tech funds in the Commercial category and the small traders in the Nonreportable category that was the food supply for the bullion banks as they rang the cash register the same old way. The tech funds tossed 5,142 longs and went short 2,481 contracts, for a total change of 7,623 contracts...and the small traders pitched 7,134 longs and went short a substantial 2,193 contracts, for a net change of 9,327 contracts. Open interest declined 4,024 contracts to 319,472. The link to the current COT is here.

And, without a doubt, the COT structure has improved even more since the Tuesday cut-off for Friday's report. In a telephone conversation with Ted Butler, he said that he would have to go back five or six years when silver was under $5/oz. to see a COT set up like this one. He feels (and I totally agree) that once the bullion banks have covered the last short they can possibly get, they won't be there to go short the next price rise. And if they're not, we'll have record silver and gold prices in a flash...along with the prices of a lot of other things. That might have occurred on Friday if JPMorgan/HSBC hadn't stepped in when they did.

In my commentary yesterday, I mentioned that the wild price swings we saw on Thursday were the sorts of price action that one would see at major tops and major bottoms. Well, it's my personal opinion that the lows for this move are now in for both gold and silver. Yesterday morning's price capitulation in both metals looked like a bottom to me, so I'm calling it the way I see it. The positive finish to the HUI (in stark contrast to the rest of the US equity markets) was further confirmation.

http://caseyresearch.com/displayDrp....