this is from ed steer of casey research:

Open interest numbers on Thursday's vertical spikes in both silver and gold were quite amazing. O.i. in gold jumped 8,224 contracts to 344,626...which is quite a bit. Silver also went up a respectable 1,334 contracts to 97,077. It's difficult to tell with all the switching going on, as to who was doing the buying and the selling. Normally the tech funds [in the Non-Commercial category of the COT] would show up as buyers once the 50-day moving averages were broken to the upside. But on Thursday, both 50-day m.a. were still intact...and weren't even broken on Friday's trading action.
So...who was going long? Maybe somebody was covering a big short position and hiding behind a curtain of spread trades put on at the same time, in order to hide their tracks. It seems like I'm always waiting for one more Commitment of Traders report to see what the bullion banks have been up to.

Speaking of the COT...the one that Ted and I were waiting for was released yesterday at 3:30 p.m. Eastern time. In a sentence...the silver numbers were spectacular, and the gold numbers were disappointing. In silver, the bullion banks in the Commercial category covered a whopping 3,275 short positions plus they added 412 long positions as well...for a net increase in long position of 3,687 contracts In the Non-Commercial category, the tech funds decreased their net long position by 2,808 contracts. The hundreds [if not thousands] of small traders in the Nonreportable category decreased their collective long positions by 879 contracts as well. The full-colour COT report for silver is linked here.

The tech funds are now at their second-lowest net long silver position in the last 15 months or so. The last time the COT in silver was configured in this way, the silver price was around $8.70 the ounce. Now we're sitting at $12.90. Is this bullish? You betcha!

Both Ted Butler and myself were disappointed with gold. The bullion banks in the Commercial category increased their net long position by only 3,901 contracts, while the tech funds in the Non-Commercial category decreased their long position to the tune of 1,528 contracts and to balance that out, the small traders in the Nonreportable category decreased their long position by 2,373. The full-colour COT report for gold is linked here.

As I've been saying for a month or more...the only fly-in-the-ointment is the huge net gold short position that the major bullion banks still hold. The dichotomy that exists between gold and silver in the COT report is a little unnerving. Is this the best the bullion banks could do in their attempt to clean out all the gold long positions so they, in turn, could cover their shorts? I don't expect we'll have to wait too long for an answer on that.

As I mentioned back in the first paragraph, yesterday was options expiry. It's a rare occurrence when gold and silver prices rise [or are allowed to rise] into this event. I consider it to be bullish. First day notice for delivery into the May silver contract is Thursday, April 30th. One way or another, next week should be interesting.

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