this is from ed steer of casey research:

As Ted Butler keeps saying...and I totally agree...silver is the centre of the bullion banks’ universe. The real purpose of the attack on the gold price was to get at the silver longs...so JPMorgan/HSBC could cover as many of their short positions as possible...and their plan is working just fine. Not only are the Non-Commercials and Nonreportable traders selling their long positions...but they are going short as well...in both gold and silver. The bullion banks may also be going after the hedge funds that are still long in the OTC market...which is obviously who they were after in the last quarter of 2008. The last derivatives report from the OCC proved that.

The open interest numbers for Thursday were very revealing In the face of huge price declines, o.i. numbers in both metals rose. In gold, o.i. rose 3,614 contracts to 339,757...and silver o.i. rose 374 contracts. Huge price declines, combined with rising open interest, is almost always a sign that the Non-Commercials and Nonreportables are selling longs and going short...while JPMorgan/HSBC USA et al cover short positions and go long. Friday's open interest numbers [when available on Monday] will most likely show a continuation of this pattern.

However...because all this activity occurred on Thursday and Friday...it won't show up until the Commitment of Traders report next Friday...April 24th.

Talking about the COT, the new one on Friday was underwhelming. I wasn't happy about it, and Ted told me to take another pill. After some explanation, I must admit that he was right...the real price declines in silver didn't start until Thursday...long after Tuesday's cut-off for yesterday's COT report. Silver actually rose most of the time during this past COT reporting period. The real improvements won't show up until next Friday's report.

In this latest COT...the bullion banks decreased their net short position in silver by 723 contracts while the tech funds in the Non-Commercial category decreased their net long positions by 835 contracts. The other 112 contract increase in net long position [don't forget...the longs and the shorts must balance] came from the small traders in the Nonreportable category. The link to the full-colour silver COT report is here.

In gold, the bullion banks actually increased their net short position by a smallish 286 contracts. The tech funds in the Non-Commercial category went longer still...increasing their net long position by 2,083 contracts. To balance it all out, the small traders increased their short position by 1,797 contracts. As with silver, the real damage didn't start until after the Tuesday cut-off for yesterday's COT report. The easy-to-read, full-colour graphics-intensive gold COT report is linked here.

http://www.caseyresearch.com/display...