And within the paper markets, "the commercials" - fabricators and big banks - have consistently fooled speculators like hedge funds into going long or short at exactly the wrong time.

The data series that tracks this relationship is known as the commitment of traders report (COT), and it's been a pretty reliable indicator of precious metals' short-term trajectory.

Right now that's bad news for gold and especially for silver, because the speculators - who, remember, are usually wrong at the extremes - are exuberantly long the latter, implying that the silver recovery is due for a correction. Here's a recent piece from well-known metals trader Dan Norcini: