The imbalances at present seem so huge, that I would not be surprised if we get a repeat of the Volume Investors Inc. collapse. That firm went belly up in 1985 when they could not cover quickly enough their huge short position in gold, which not only wiped out the firm’s capital, but caused big losses for others as well. So as I see it, the shorts in silver - and gold too for that matter - are walking on a knife-edge, flirting between the illusion of solvency and collapse.
Clearly, the big test for gold will be to clear the $1,312 area. For silver, the big hurdle is around $20.30.