Silver Open Interest Appears to have Bottomed on 12/8

Open interest in silver increased by 1,252  contracts (6.26 million paper ounces) Wednesday to 105,245.  Open interest appears to have bottommed on 12/8, with open interest hitting a low of a mere 94,999 contracts.  OI has increased nearly every day since 12/8, and has now risen 11% from the low of 95,000.  While silver's price has bottomed at least 3 week's later (if today's lows near $26 prove to be the bottom), the sustained recovery in open interest may well be a leading indicator that the worst of silver's correction may be nearing completion. 

Silver is now trading in contango from spot through the Dec 13 contract, entering backwardation with the July 2014 contract, and increasing to a .554 discount for the July 16 contract vs. spot.

Daily Settlements for Silver Futures (FINAL) Trade Date: 12/29/2011
Month	Open	High	Low	Last	Change	Settle	Estimated Volume	Prior Day Open Interest
JAN 12	26.925	27.380	26.385	-	+.082	27.274	132	370
FEB 12	27.065	27.400	26.150	-	+.082	27.294	82	112
MAR 12	27.080	27.475	26.145	27.355	+.081	27.315	34,103	58,999
MAY 12	27.140	27.390	26.270	-	+.076	27.358	488	9,129
JLY 12	26.985	27.500	26.500	-	+.073	27.394	452	3,557
SEP 12	26.985	27.000	26.670	-	+.074	27.424	264	2,490
DEC 12	27.070	27.575	26.565	-	+.072	27.460	430	13,875
JAN 13	-	-	-	-	+.072	27.458	-	9
MAR 13	-	-	-	-	+.072	27.453	-	1,156
MAY 13	-	-	-	-	+.071	27.436	-	1,078
JLY 13	-	-	-	-	+.071	27.414	-	3,211
SEP 13	-	-	-	-	+.071	27.373	-	165
DEC 13	26.885	26.885	26.705A	-	+.071	27.310	11	8,002
JLY 14	Backwardation-	Starts-	Here-	>-	+.070	27.174	-	791
DEC 14	-	-	-	-	+.069	27.103	-	1,451
JLY 15	-	-	-	-	+.074	26.953	-	227
DEC 15	-	-	-	-	+.079	26.853	-	585
JLY 16	-	-	-	-	+.079	26.720	-	38
Total							35,962	105,245