Silver Short Squeeze

Posted by Adam Hamilton - Zeal Intelligence

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“Silver has suffered a miserable year so far, bludgeoned by gold’s unprecedented selling anomaly. The exceptional weakness in both metals was greatly exacerbated by futures speculators piling on short-side bets. But with silver shorts hitting record extremes, a super-bullish short squeeze now looms.Any rapid silver rally is likely to spook the highly-leveraged futures traders, sparking a massive stampede to cover.”

“Futures speculators’ total short positions in gold recently soared to wildly-outlying record highs. The only way these radically excessive shorts can be closed is by buying offsetting longs, and the sheer quantities required are gargantuan. And as the gold price surges on this heavy buying to cover, the silver price will follow it higher. Gold short covering will likely provide the initial spark to ignite the silver short squeeze.”

“This first chart looks at the silver-futures net positions held by large speculators, small speculators, and commercial hedgers over the past 9 years or so. The weekly silver price as of each Tuesday (the day that the CoT reflects positions) is superimposed. Silver-futures speculators have waxed extremely bearish in 2013, which is certainly understandable. But these guys’ collective bets are a strong contrarian indicator.”

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… much more HERE