Now that Gold is over $1,600, will Silver break $50?

COT Data

Last week the Commercials (based on the COT report) were 37,490 contracts net short. The previous week 33,451 net short and the week before that 29,166 net short, a 52-week high. You can see on the weekly chart below how liquidation by big money helped drop the price of silver. If you can’t see this email me at Gary@CRBTrader.com for further explanation. Right now we see new buying from Managed Money and new selling from producers. Watch the price as swap dealers become net short again.

Commercial Net Tracker instructions: This form tracks the Commitment of Traders (COT) data for the commodity futures market. This form "looks" at the most recent five weeks of COT data and provides visual indications of the data. A) If the current value is at a 12-month low, the cell will display a red/burgundy background. B) If the current value is at a 12-month high, the cell will display a green background. C) If the current value went from net negative to net positive, the cell will display a blue background (indicating a bullish condition). D) If the current value is both a 12-month high and also went from a net negative to a net positive, the background will be green. You should view the data with green backgrounds to determine if they also went from net negative to net positive.

If you need help understanding how to understand how to use the COT report to your benefit, please email me at Gary@crbtrader.com and put COT report in the subject line. Please include your name and telephone number in the email.

Proceed to Page 3 for this week's detailed fundementals charts...

Fundamentals

Learn about silver (from the Silver Users Association)

DEMAND 2004 — In 2004, total fabrication fell 2% to a six-year low of 836.7Moz. This figure is more than the amount of newly mined silver (634.4 Moz), however, scrap metal accounts for approximately 25% of the world's consumable silver. Industrial demand has grown with the increasing use of electronics and electrical uses. From mirrors to paints, and dental alloys to coins, silver is used in numerous areas. Today industrial uses account for 44% of worldwide silver consumption.

• Sterling silver is used for jewelry, silverware, etc. This alloy
  contains 92.5% silver, the remainder is copper or some other metal
• Photography
• Dental alloys
• Bactericides
• Solder and brazing alloys
• Electrical contacts
• High capacity silver-zinc and silver-cadmium batteries
• Silver paints are used for making printed circuits
• Used in mirror production and may be deposited on glass or metals by chemical deposition, electrodeposition, or by evaporation
• The iodide is used to seeding clouds to produce rain
• The nitrate is used extensively in photography
• Coinage metal
• Solar Energy Panels
• Super-Conductivity Research

Have a prosperous trading week.

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