On the heels of continued wild trading in major markets, the bullion banks have just covered more of their gold & silver short positions.  There is also an important note about the selloff in the mining shares.

Short Covering In Gold & Silver!
February 9 (King World News) – As we close out trading for the week, there has been short covering in the gold and silver markets

The commercials covered a large number of short positions in the silver market (see chart below).

Large Short Covering In Silver!


After the recent action in silver, it will be very interesting to see the next COT report.

Long-Term Look At Silver
Here is a longer-term look at the commercial positions in the silver market (see chart below).

23-year chart of commercial silver short positions


You can see that commercials once again covered a bit of their short positions in the gold market (see chart below).

A Bit More Commercial short covering in gold


After the recent action in the gold market, it will also be very interesting to see the next COT report for gold.

Long-Term Look At Gold
You can take a look at long-term commercial short positions in the gold market (see 23-year chart below).

23-year chart of commercial gold short positions


I thought it was also important to share Bill Fleckenstein’s note about the continued selloff in the mining shares:

The GDX and most individual miners were smacked again today for the seventh day in a row and the tenth out of eleven, so the selling has gotten quite lopsided. Both the miners and gold are so out of favor that people who dislike them probably assume that gold is doing worse than the stock market this year, which is not the case. Of course, none of the facts we could trot out matter one iota now until psychology changes, but I can’t believe that is too far away.

Stay Disciplined
The sentiment is also extremely negative right now and that is very bullish from a contrarian perspective.  If you are accumulating physical gold and silver, just continue to purchase at the normal times each month if you are dollar cost averaging.  Don’t be distracted by the manias that are starting to crack. Instead, stay disciplined and don’t try to outsmart the market as you continue to accumulate.  For those of you who are accumulating your favorite high-quality mining shares, continue to dollar cost average in February.

ALSO RELEASED: CAUTION: Three Of The Greats Just Issued Warnings About Friday’s Trading CLICK HERE TO READ.

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