despite the run up in silver (and gold) over the past month, the open interest hasn't gone up much. according to ed steer of casey research, there is still plenty of room for more speculators to take positions in the metals before the next sell-off is engineered.

Open interest on Wednesday's big gains in both gold and silver held more surprises. For a $28 gain in gold, an open interest increase of only 5,859 contracts [to 356,717 contracts] is not a lot. Silver had an even bigger surprise in store, as o.i. fell 123 contracts to 95,896. The rallies in both metals on both Tuesday and Wednesday smell of bullion bank short covering...with those that were short covering, going long as well, to hide their tracks. Wednesday's o.i. numbers won't be in the COT until Friday, February 20th. It's reassuring to see open interest not doing a lot while the price climbs. We're a long way from the past record highs in open interest before we had a 'correction' in the price. Let's hope that holds true this time. Gold volume yesterday was around 112,000 contracts...net of switches.

The following commentary [and graph] is courtesy of Bill Murphy, the proprietor at LeMetropoleCafe.com..."Love the following charts of the price of gold versus gold open interest. Gold has broken its downtrend line, but the gold OI has not yet, perched right on it. What is so fascinating and confirming recent analysis in this column, notice how far the gold open interest is off its high. It is astounding, which means there is room for hundreds of thousands of specs to pile in and take gold hundreds of dollars higher, well past $1,200 per ounce."

http://caseyresearch.com/displayDrp....