this is from the latest got gold report:

The LCs seem to be extraordinarily aggressive in the reduction of
their net short positioning for gold, perhaps not as aggressive for
silver, but believe it or not the silver LCNS today of 47,960 contracts
(with silver in the $17.70s) is only 10,160 contracts higher than the
February 9, 2010 silver LCNS low of 37,800 contracts – when silver
was then only in the $15.40s. For further comparison, today’s silver
LCNS is only 14,759 contracts higher than the July 21, 2009 LCNS
nadir of 33,201 contracts as silver tickled the $13.50s.

One can well understand then why we believe that any further dips in
silver are likely to be surprisingly well bid as the LCs are very highly
likely to be motivated to further reduce their net short positioning. It
is only a question of time before the pent up long side seeks to
exploit that condition. If confidence in overall markets continues to
heal we expect that the summer doldrums for silver will end early this
year.

Gold really hasn’t corrected all that much in U.S. dollar terms, only
about 7%, but we believe the COT data shows and shows clearly that
the largest of the largest commercial “hedgers” and short sellers are
much less confident of lower gold (and thus silver) prices than they
were just four weeks ago.

The COT data this week strongly increases our confidence to
“pounce” should gold and silver enter our expected support zones
shown in the linked charts in our full Got Gold Report, but if we do so
it will only be with tight, new-trade trailing stops for peace of mind
and protection. Our confidence is definitely increased, but not our
recklessness.

We continue to believe that silver is strongly undervalued relative to
gold.

http://www.gotgoldreportsubscription.com/COTflash20100725.pdf