in this article timothy silvers conludes that there are many reasons for silver (and gold) to perform well in the months ahead. the charts he mentions didn't make it into this post, but can be found by following the link at bottom:

Why do I still recommend silver, given its poor performance compared to gold since summer? Silver is still down 45% from its highs, while gold is only down 10%. Silver has rebounded over 35% from its lows, while gold is up about 28%. Typically, when gold goes up, silver goes up by a larger percentage. I think that will be the case again this year as investors focus less on silver’s industrial demand and focus more on its investment potential and lower cost to gold. Another factor is that about 80% of silver is mined as a byproduct of other metals mining. Many mines are being shut down or production curtailed for tin, copper, zinc, etc. I expect this will reduce the supply of newly mined silver in 2009. That should be enough to offset the reduction in industrial demand.

I usually mention the number of silver futures contracts held short on the COMEX by commercial traders. In August I mentioned that there was still overhead of short positions that could drag gold and silver down further. While I was expecting that gold and silver would hold their value better during the financial chaos, in fact they did get sold to raise cash along with many other quality assets. The major overhead of commercial short positions is no longer there in silver and significantly reduced in gold. This chart shows that open interest (total contracts outstanding, blue line) is the lowest it has been since 2004. Non-Commercial long contracts (green line) is at a very low level, as it the Commercial short position (red line). These low readings always precede rallies for silver. Another way of looking at it is that there are fewer weak hands (speculators and non-commercial hedge funds) holding silver long that may be forced to sell. This paints a bullish picture for the metal going forward.

http://news.silverseek.com/SilverSee...