Silver as an investment

Still Struggling With Silver Open Interest

Be prepared for the next great transfer of wealth. Buy physical silver and storable food. / By Turd Ferguson / Thursday, February 14, 2013 at 4:11 pm

Maybe you can help me to make sense of these numbers?

I think you know that the current open interest situation has me perplexed. First of all in gold, since last Thursday, price has fallen by over $26 yet total OI has risen by over 6%, from 420,766 to 446,274. So, who is shorting so much that price is falling? Perhaps more importantly, who is on the other/buy side of those trades? Unfortunately, the deliberately opaque CoT will provide only a few clues.

But what really has me bugged is the OI of silver, specifically since late 2010. Why then?

  • QE2 was announced in early November of 2010.
  • It began in December and proceeded along at approximately today’s QE∞ pace of $85B/month until June of 2011.
  • Silver rallied through November and December 2011.
  • It corrected for three weeks in January 2011 before stopping at “Turd’s Bottom”.
  • It then rallied through March on speculative buying.
  • It spiked in April as fears of a “commercial failure” sparked Cartel short covering.
  • In late October of 2011, MFGlobal collapsed and took with it nearly $2B in clients assets as well as the integrity of the CME and the futures markets as a whole.
  • When QE2 ended in June of 2011, price was near $35. When QE∞ was announced in September of 2012, price was still near $35.


Thanks to BrotherJohnF