Confluence of recent events

... Remember that Friday was a huge day in silver, up about $1.20 on the Comex and something like $1.60 by the close of the Globex. I was looking for a rise of just 500-1000 contracts because I felt the rally was primarily EE short-covering. If the rally was Sprott-induced, it should have been about 4000-5000 contracts. The actual number was 2350 as total OI rose from 102,055 to 104,406. Hmmm. What does this mean? Upon review and reflection, I think I am wrong and everyone else is right. 2350 is a lot of new open interest, particularly considering where OI is now versus April last year and taking into account the outrageous margin levels.

I think this implies a further rally in silver. A good rush of new money based upon the strong, Sprott fundamentals. $33 should only be a "speedbump" and silver should, instead, move toward $35 and onto the Battle Royale line near $37. ...
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Those looking/hoping for QE3 should continue to closely monitor the declining POSX and U.S. treasuries. Right now, both are beginning to give indications that overt QE may be coming sooner rather than later.
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Yes, Iran will likely exchange some of the gold for other things like gasoline. Some of the gold. Some. The main thing is this:

• Less global demand for dollars. Less demand + more supply = downward price (gold positive)
• India will certainly act to purchase gold to replenish supply "spent" on Iranian oil (gold positive)
• Another step on the path toward dollar irrelevance as reserve currency (gold positive)

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h4rdware said:

I always wonder at people trying stunts like this. Silver collects traders' heads like trinkets. It must be a form of twisted entertainment.

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each physical ounce of gold refined from mine output or scrap turns over, changes hands, around nine times between mine and ultimate user or investor. SO, if the gold multiplier is nine, then the ratio of paper gold trades to physical trades falls to 11:1, instead of 100:1.

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