This could be very bullish for silver going forward.

COMMERCIALS COVER NEARLY HALF OF REMAINING SHORT SILVER POSITION IN PAST WEEK!

Gold & Silver COT Report 6/14/13

Commercial longs added a total 1,581 contracts and covered 1,798 net total shorts to end the week with 48.21% of all open interest, a decrease of +0.55% in their share of total open interest since last week, and now stand as a group at 25,100,000 ounces net short, which is a decrease of just under 17 million net short ounces from the previous week-
Meaning the commercials have reduced their net short position in silver by 40% in just the past week, and by over 90% from their highs near 225 million ounces prior to the announcement of QE∞ last year!

Large speculator longs increased by 458 contracts and picked up 2,111 net short contracts decreasing their net long position to 18,515,000 ounces, a decrease in their net long position of just over 8 million ounces from the prior week.

Small speculators sold off 359 long contracts from their total and picked up 1,367 additional short positions for a net long position of 6,585,000 ounces a decrease of over 8.6 million ounces net long from the prior week.

Silver price was non-eventful until Friday of the COT week when it appears a commercial short covering dropped price all the way to Friday closing, more than $1

Somewhere along the way, speculators picked up another 3,500 shorts as open interest trends remained intact as speculator go more short and commercials go more long.

Silver swap dealers are now over 107 million ounces net long so the dealers are not betting silver will go lower but it appears the speculative traders are trying to force price lower by picking up new positions and reinforcing a lower price.

In gold, there was short covering by the producer merchant whereas the short covering in silver was split between the two commercial traders so my guess is that silver led the way to the bottom last Friday. Gold speculators added over 6,000 new short positions so expect price to trend downward even though we saw some upward momentum today at the end of the week.