The Commitment of Traders report for April 1st shows that commercial short positions in silver futures outnumber long positions by about 2.5 times. Speculators large and small have taken the opposite side, with long positions for large speculators outnumbering shorts by nearly 5-to-1.
The consensus opinion about silver is that the commodity is overbought, but that there is no particular reason that the metal’s run will stop. In its Silver Market Update for April 3rd, SilverSeek.com says that the acceleration in the collapse of the fiat system worldwide is gathering pace and there may be no stopping it. That report also notes that this will end with hyperinflation and a state of acute crisis that ultimately brings a gold standard with silver possibly playing an important role.
That may be over-stating the case somewhat, but there’s no denying that silver has been on an unprecedented run since late last summer. To add fuel to the fire, short covering by big traders with large short positions is keeping the run going. SilverSeek.com concludes with some important food for thought: “If gold now breaks higher – above recent highs and the restraining shallow trendline shown on its 2-year chart, silver could get to perhaps $50 on this run before it pauses for a more serious rest.”
The iShares Silver Trust (NYSE: SLV) has risen about 2% today to $37.57, while miner Silver Wheaton Corp. (NYSE: SLW) is up about 3% to $44.08. The Global X Silver Miners ETF (NYSE: SIL) is also up about 2.4%, to $28.83.
Earlier today we showed how this gold/silver ratio had narrowed back to the lowest level in the last 20 years.
Paul Ausick
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