Not since November of 2008, during the heat of the 2008 Panic, has there been a smaller commercial net short position for silver futures. We can say that as of Tuesday, the largest, best funded and presumably the best informed commercial traders of silver futures had taken the price downdraft opportunity to very strongly reduce their short bets for the second most popular precious metal.

I'd be interested to know what industrial consumers are doing right now. Taking advantage of low prices to stockpile for future production seems logical at these levels. You get a double advantage really - you secure future supply, plus you have a financial investment to help out the balance sheet. I have no idea how many of these co's are buying on the spot vs. locked in contracts, but it should have some effect as far as establishing a floor.

I really don't see silver going much lower here. Maybe you get a spike down to the low 20's but I can't see it lasting more than a day or two, if that. FWIW, I'm a buyer down here, but I also tend to be early, so we may have a bit more to weather before we head back up.

ebear