Silver is still in 5 cent backwardation between spot and May, when they should be trading a parity given 1st notice for May silver is Friday. Also, I mentioned to you that we were contacted by our futures broker, RJ O'Brien, yesterday asking us if we were going to take delivery on our May silver position, which is already funded. That is the first time they've ever called us ahead of 1st Notice to see what we were doing. Given the big drawdown in Comex silver, 573k ounces yesterday mostly from the "eligible" category which tells me that people safekeeping their silver at Comex wanted to take custody, I find it a bit suspicious that we were being "felt up" by the Comex to see what our intent with May silver was.

This latest paper attack has Larry Summers' footprints all over it, especially given that silver had run up over a buck in a week and was very overbought technically AND this is the final week where specs will be unloading May contracts if they don't intend to take delivery. Perfect set-up for Summers to order a paper attack, which started early Monday with paper smacks at Hong Kong close, a.m. London Fix and Comex open - a hat trick, as I can't recall them every smashing the paper market at all three favorite attack times in one night. We've been adding AGQ all the way down on this pullback in our fund, because that position will be a home run by the end of May or June, given that it's 2x the return on silver.

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Bizarro world! Last night, following the gold raid, the market went comatose and barely traded. Same thing happened again this morning. No free market trades like that.

The good news for the day is that gold held PIVOTAL support right above $880 and moved convincingly away from that level, closing well off its lows.

The gold open interest only fell 157 contracts yesterday, indicating new Gold Cartel shorts were instrumental in the price drop. The silver open interest fell 889 contracts to 94,721, as longs decided to exit rather than roll over ahead of first notice day on Thursday … a prudent move in retrospect.

When Comex closed, spot silver ended the day SEVEN CENTS OVER MAY SILVER. As far as I know, this severe backwardization is unprecedented since the Hunt days. While you would never know it from today's price setback, this tells us there is a fuse out there which could ignite silver at any time.