Trader’s Narrative

Forget gold and gold stocks. It is time for silver to shine in the precious metals’ sector.

At least that’s what the Commitment of Trader’s report is telling us.

Lately the commercials have been been net short the least number of contracts in five years. Since they are almost alwas net short as part of their usual business, what matters is whether they are really, really short or just a little bit.

Right now the most knowledgeable players in the silver market want to limit their exposure to a potential rise in the price of silver.

The last time they had this nominal contracts net short was in the summer of 2003 when silver was less than half of what it is now. Even more meaningful, the small speculator isn’t excited at all. Eventhough the price of silver has shot through the roof, they are holding their smallest net long position in years.

In contrast, we are seeing the exact opposite in gold’s Commitment of Trader’s report.