In today’s pre-market action, the iShares Silver Trust ETF (NYSE: SLV) traded above $23/share, an all-time high for the fund since its inception in 2006. Like the SPDR Gold Shares ETF (NYSE: GLD), the silver fund has been on a steady rise for the past two years. SLV, in fact, has more than doubled in two years, while GLD has risen about 60% in the same amount of time.

Like its gold counterpart, SLV holds silver bullion. As of yesterday, the fund held 10.085 metric tons of silver, a level it has held for the past few days. The NAV for the shares at yesterday’s close was $22.53, a bit more than 1% less than the closing price of $22.84.

The run-up in silver prices may be about to end, though, according to Chris Mack of tradeplacer.com writing for Mineweb.   Mack points out that the large banks that have controlled the price of silver are now closing out their positions at a loss, and that hedge funds and traders “that never even thought of silver before will begin to squeeze the shorts.”

Historically the big banks have sold short into the face of price rallies in silver, when everyone wanted into the silver trade. Once the rally ended, the banks went back in, bought up the short positions again, and started the cycle over again.

This time, according to the Commitment of Traders reports, the banks covered 2,297 contracts and bought 989 long contracts in the week through Oct. 5, when silver prices rose $1. According to the historical pattern, the banks should have increased their short positions, but that didn’t happen.

Banks are still short more than 62,000 contracts, but if silver prices rise by just $1 per week and the banks continue to buy around 3,000 contracts per week, it will take them more than 90 trading days to cover the outstanding contracts. However, if the squeeze is on, it could all happen much faster.

Mack’s conclusion is that this time is different, and that the opportunity to pick up silver at low prices may not exist. For the SLV ETF, though, the ride probably won’t be as bumpy. Its silver purchases can likely wait until the turmoil passes.

Your Guide to Profiting From Asia’s Explosive Growth.  For access to the best-kept secrets about investing in China and the rest of Asia, plus the hottest stocks to buy and sell, sign up now for Robert Hsu’s FREE Investing Newsletter, Asia Insider. It’s sent right to your email inbox every week — absolutely FREE!