Silver - COT structure increasingly bullish, July 15th 2005

With silver trading roughly in the $6.80-$7.05 range the past week the COT structure has gotten increasingly bullish. Commercial net positions now stand clearly at levels which have in the past 16 months preceded comparatively strong up moves in price. Commercial longs stand at multi year highs.

Even though the COT structure in gold doesn't out right scream 'buy', things have improved on that front too, with commercial short positions declining towards 200.000 contracts. 

The role of the COMEX in silver and gold might be declining in the not too distant future, with news like Futures and options added to Dubai gold trade coming out. All this bodes well for gold and silver IMO, but the day when COT reports won't give us quite as clear buy and sell signals as the past couple of years might also be drawing closer.

That said, I believe we are well positioned for the next major move up in both silver and gold in the second half of this year.

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