This month is definately shaping up differently than how things have panned out in the past for the metals trading. Every other month that I can recall for the last few years has seen increased shorting from the commercials as the gold and silver options expiry date approaches. Usually the thursday or friday prior to options expiry we seen the metals head sharply lower, regardless of how much strength they have demonstrated during that month. And the monday/tuesday of options expiry week is a bloodbath most of the time.

This time around we have seen several attempted raids but they lasted less than a day before the buying interest swamped the selling presure from the commercial shorts. Stop losses have not been hit and no mass liquidation of open positions has occurred.

We could still see this later today or tomorrow, but for now it sure looks like the scam has been busted. Too many people are trying to establish leverage to the metals right now to have the market driven lower by a handfull of malignant shorts.

The debate on whether or not the ETFs are actually buying the metal is irrelevant on the basis of this discussion. If the ETFs are in fact buying real bullion, then their activity is sopping up some of the bullion that would otherwise be for sale to investors elsewhere in the world. And if they are not buying real bullion, but are in fact just buying futures, then the stampede into the ETFs is part of the reason why the Cartel is getting stuffed.

My guess is that if we do not get the big washout this month that we have seen almost every other month, then we are definately off to the races both for the metals and the PM juniors. Investors are not stupid and after having our pockets picked for years, many people have come to the same conclusions that I posted above. Therefore, people tend to wait until after options expiry to do any new buying of metals and shares of juniors, since history has shown that it is cheaper to buy after the takedown. There is probably a lot of buying on the sidelines right now. When those buyers step up and enter the market in the next week or so, we could have a nice upside move.

I was going to wait until friday to buy more ECU since I expected that would be the lowpoint for the down move. Not I am not so sure. The lows may already be in. JMHO...

cheers!

mike