I’ve been going back and forth with GATA’s Bill “Midas” Murphy (Lemetropole Cafe Midas Report) about the significance of the unusually high silver futures open interest on the Comex right now.
Historically, a high open interest in silver is associated with short term market tops because the hedge funds have gotten negligently long silver futures and the market manipulating big banks have taken the other side with extreme-sized short positions.
This time around the situation is the exact the opposite. The hedge funds are now historically short silver futures and the banks and silver producers (mining companies who hedge production using futures) are either net long silver or are sitting with historically low hedge positions.
I wrote an article for Seeking Alpha detailing the data showing the set-up as described and explaining why silver may be set up for a big short-squeeze move higher: Is Silver Set Up For A Short Squeeze?
There’s also a couple ideas for taking advantage of the set up, plus one of my research ideas – Almaden Minerals (report linked at the top with technical analysis from DenaliGuide) – has quite a bit of silver in its Ixtaca gold-silver project.