It looks like gold has passed the test and made bottom, now it’s silver’s turn.  Silver has acted quite poorly over the last 10 days while gold put in a base.  The interesting thing is that silver’s open interest on the COMEX has risen during this time which means the poor action should be attributed to fresh shorts as opposed to long liquidation.  The Bollinger bands are as tight as they’ve been for 5 years and hedge funds appear to all be on one side of the boat… under-invested and even short.

As I wrote 2 to 3 weeks back about gold having an “important day”, I believe that today is the same for silver.  After being down roughly 50 cents, it is beginning to turn.  Should silver close unchanged or even positive today, the shorts will truly have something to worry about.  “Outside” days are rarely allowed in either silver or gold.  Gold had its turn a couple of weeks back, let’s see if silver can perform a repeat and turn in its own “outside day.”  Should this occur and silver begin to act better, I think that short covering will begin (and be forced) in earnest and physical buyers will step up purchases in fear of missing the boat.  When (if) the Cypriot banks open tomorrow, we will probably see long bank lines and possibly violence in living rooms across the globe.  This can only add to the current “uneasiness” and bleed more fiat into physical metals.  We watch and wait.