I am not authority, just a small investor who on occasion speaks his mind:

It is my opinion that short covering has been mostly accomplished in the gold and silver arena. Any spurts in the price is most likely due to buyers that are impatient and grasp at enough of the stuff to temporarily drive the price up. Of course, the Cartel brings up more papaer PM to lower the artificial price. That is what has kept the prices so low. If it were not for the "Paper" shinanigans the price of gold would shurely be above $1000 and would not have dipped below$900. It is the acceptance of this paper by some buyers that has enabled this extent of control of the price.

Substance does matter, only some are fooled into accepting bogus substances. That is the crux of the problem. Once a sufficient quantity of buyers refuse the paper the whole thing will collapse like a large set of dominos. The so called financial crisis is just an example of same (bogus mortgages etc.).

Just one example, Look at GWR1's (Bloomberg) post today "Gold demand rose 18%", things are turning around, just too slow for many of us.

Be it the Chines or the Arabs, they all want and do buy on the sly without wanting to drive the PM prices up. They are still receiving huge quantities of dollars and need to convert those to more secure assets. Physical such as PMs but they are short in supply so the price would go up, and then there are properties, be they buildings, corporations, working mines ( oils and metals) or assets in the ground. It is still in their interest not to bring the dollar down too soon. Why kill the gooose if it still lays golden eggs. You cut it's head off once the eggs stop.

Obama promisses to close the Guantanamo prison, a bold statement. Will he be just as bold with US finances. I noticed last night that the Big Three Auto manufacturers did not get as easy an ear in Washington as did the banks before the election, this is still with GW at the helm. Obama hinted at revoking some of Bush's legislation, Wow. Signs of change.

Paraphrasing Nessus, Amen.