When we last posted on this, James H sagely commented that silver is a stacked game, only for the brave. Right on cue, something odd is happening - silver has lurched into backwardation.
I don't rule out for a minute that hanky-panky is afoot, which is reason enough for great caution. Nevertheless, for myself, I am still taking this as a buying opportunity: I'll let you know my average buy-in price in due course.
My reasoning ? Purely MHO, but I take the view that (a) strategically, there is probably a decent floor (Chinese at al diversifying) and (b) technically, I'd generally interpret backwardation as a signal of near-term shortage - though admittedly it has been coupled with spot-price softening in both gold and (to a lesser extent) silver itself.
So - a potential danger-signal for sure, but personally it suits me OK at the minute (see the 2011 predictions).