It appears we had a secret buyer in the silver pits yesterday who has quite the crush on silver. This just might be the first sign of investor hoarding or industrial stockpiling. As the value of silver increases, more and more people will trade in their paper certificates for real physical silver. Such activity will put even more stress on the silver shorts.

Great recovery in gold and silver this morning despite the blatant NY cartel attack. It seems the attacks are becoming increasingly more shallow and short-lived.

Regards - VHF

Wednesday, February 27, 2008 5:32:57 AM

Author: Robin Bhar, John Reade UBS Metals Daily

New highs in gold and silver

Gold at the Comex close was $946.00-46.50, after trading as high as $947.50-48.00 and as low as $933.25-33.75. An open well above Europe's $926.50 low turned out to be a good omen. Strong US PPI data then pushed it up to $938 where initial resistance was found. A drift back to $935 was met by buying before the pm fix ($937.00). Thereafter, the stronger Euro, crude oil, and certain base metals showed the way higher; minor stops were hit at $938 and $942 along the way. The close, up $8 from yesterday, was strong. With the impact of the IMF chatter apparently absorbed, gold seems destined to test and break last week's all-time high of $953.60 very soon - perhaps tomorrow. Supports are $935, $925 and $910, with resistances of $955, $962 and $975. Silver closed Tuesday's Comex session at the $18.71-74 high, a whopping 60 cents, or 3%, up from its open and low. What started out as a gradual push higher courtesy of a New York investment house reached $18.30. Gold, which traded and held above $941, then did its part and helped pave the way to $18.50. At that point, an aggressive buyer stepped in - twice - and sent silver surging to the highs. Light support comes in at $18.50 and then $18.00 with higher highs probable.