ed steer on the huge increase in open interest in gold and silver:

Now for the open interest numbers. I said yesterday that Wednesday's gold o.i. numbers would be "u-g-l-y". In actual fact, they were beyond u-g-l-y. Gold o.i. rose by one of the largest amounts that I've ever seen in the ten years that I've been involved in the precious metals market...26,051 contracts. Total open interest is now 410,754 contracts, and yesterday's volume was a very large 165,302 contracts. Silver was better, with o.i. rising 'only' 1,629 contracts to 108,300 contracts of total open interest... on volume of 33,296... which is a lot.

It should be obvious to anyone that this price rally in gold is being met with ferocious resistance from the bullion banks, who are going short against every long placed. Without a doubt, they piled on the short positions again on Thursday... and I won't be going too far out on a limb to say that we are very near to having the largest net short position in gold in the history of the Comex. That's about 265,000 Comex contracts, or 26.5 million ounces of gold... more than one third of 2009 gold production held short by a handful of bullion banks. And two U.S. bullion banks are short about 18 million ounces of that total. Where the hell is the CFTC???

And, as I mentioned yesterday, because all this price action began on Wednesday, none of what's been happening since the Tuesday cut-off, will be in today's Commitment of Traders report. And, to add insult to injury, today is also the release date for the Bank Participation Report for positions held also as of the Tuesday cut-off... so none of this action will be in there either. Coincidence??? Not bloody likely.

As you can imagine, Ted Butler and I spent a fair amount of time yesterday talking about this whopping increase in open interest. Neither one of us were happy campers. But we both agreed on how it was going to end. Either the bullion banks get totally overrun and we have the much vaunted "Commercial Signal Failure" or, at some point down the road, the bullion banks [who will then be short even more obscene amounts of gold and silver] will engineer a sell-off and we all get our heads handed to us... again. There's just no other way out. It's only a matter of timing as to which way this all ends.

http://www.caseyresearch.com/displayGsd.php