Our kind of day, or it was until the bums showed up with one of their silly attacks again. Gold and silver began to explode in the Access Market yesterday following the Fed’s notes and Ben Bernanke’s press conference. They kept on going up through the London and Comex trading hours.

The news of late could not be more bullish and yet of no surprise to veteran Café members. What is occurring is exactly what the contributors to this column have been pounding the table about for some time. The real surprise is why is it surprising to so many on Planet Wall Street and in the mainstream gold/silver world.

Gold and silver were on fire, rising to $1539 and $49.55 respectively. It appeared both were going into launch mode when The Gold Cartel showed up with one of their patented PLAN B assaults following the physical market pricing for the day at the PM Fix, which came in a sturdy $1535. And then…

How ridiculous! How many times the past week have these clowns done the same thing. The charts are exactly the same. The good news is they are only slowing down the gold ascent, not stopping it. Even after their raid today, gold closed sharply higher than yesterday’s Comex close and made an all-time new high Comex close.

There has to be sheer panic in the silver short world. At one point today the price of silver was up a stunning $3.5 over its prior Comex close. Veteran Café members will recall how many times I said these sort of daily moves were coming … and that was when a $1 move up was a really big deal. Despite a $2 drop off its highs, silver still closed well above yesterday’s Comex close and is still the name of the game these days. Get ready for some serious silver fireworks.

The open interest changes are most revealing. The gold open interest rose 7678 contracts to 537,810, as the specs pour in on the long side. It will take 120,000 more of them before gold takes out its OI high of last year. Where will that sort of buying take the price? The silver open interest fell a very steep 7497 contracts to 135,844. The move by The Gold Cartel and JP Morgan to shake spec longs out of their positions ahead of first notice day for the May contract worked. That said, the raid failed miserably as far as the strong hand holders are concerned and its effect on the price, as silver was in new high ground this morning … and the JPM gang is still MEGA short. Oh boy, are they in trouble.

In THAT regard, play close attention to the following superb input from one of our London sources who is very plugged in on the metals scene. "Graeme" has more fuel for the precious metals fire, which only makes the potential moves up even more explosive…

Platinum

JPMC has gone long physical platinum by taking net delivery through Comex of at least 58,200 troy ozs since last summer. Possibly another 5,000 ozs at the close of the April delivery. In April Deutsche Bank also got into the long physical game taking delivery of 9,700 ozs. Something seems afoot. Lately, silver has been moving from the deliverable category at Comex into the non deliverable category, with deliverable now down to just 33% of Comex inventory. The official cover story by the exchange is that this just reflects the holders of paper warrants who have not converted them into electronic warrants which are deliverable. A mere recording switch by the exchange. So that's alright then, except it isn't. The holders of the paper warrants have made a conscious decision to keep holding them so as not to be deliverable. In effect they have protected their holding from being liquidated by the exchange in any coming fiat currency crisis.

Two large banks have started swapping paper for physical precious metal, and on a deliberate basis. Officially JPMC stopped prop trading last October, but the prop desk traders just moved over to closely allied hedge funds. it is most likely that they are the ones still accumulating physical platinum via JPMC. A prop desk in all but name. So why Platinum? The market is much thinner than the other PMs, with annual production smaller, demand is rising as diesel truck growth rises across Asia, and in London the bullion banks are probably heavily short Platinum via their fraudulent unallocated account system. JPMC and now DB think they see a big inflation ahead and the easiest way to play it is via accumulating physical Platinum. They are further constrained against doing the same in gold as it would put them directly opposite the Fed and BUBA and the ECB, incurring ire to say the least, sending a signal that they have lost faith in the dollar and Euro. JPMC can't do it in silver since it is the largest short! It would signal the end of the short manipulation. DB probably isn't willing to appear to be squeezing JPMC lest it bankrupt them.

Both banks were probably hopping to acquire a lot more platinum before getting noticed, as their positions are still tiny in dollar terms relative to the amount of cash they can use to build inventory. My take on this is that we are seeing the start of an end run around fiat currency. China's CB acquires most of the gold mined in China. Russia's the same in Russia. Both only updating gold holdings sporadically after the fact. The leading western CBs still have a lot of gold that they could sell, but have probably already leased most of it and are unable to deliver much. In silver they hold no inventory at all. JPMC is effectively on its own. That may be why they are trying an offsetting Platinum hedge.

To me, this is explosive for PMs. Two leading banks are using physical accumulation to get around the paper shorts on the exchanges and the "unallocated" scandal in London. Since this process started last year, my guess is that they are hedging against next year's US election, the rout of the euro via bailouts, and the rout of western fiat currencies via QE programs.

Other explanations are possible, but this isn't happening by accident.
Graeme

Behavioral Finance Report

*By one account after another inflation is beginning to soar in the US, yet the yield of the 10 yr T note is back down to 3.32% thanks to market manipulation by the Fed. Could there be any more bullish recipe for gold and silver?

*The sharp uptick in the US jobless number today (see below) is extremely troubling for the US economic big picture. Despite all the QE and other stimulative measures by the Fed, it has yet to engender any kind of serious change in our employment picture. Meanwhile, inflation is taking off and the dollar is looking ghastly. Stagflation is here (also see below).

*What the average US citizen is looking at hit me over the head today as I took my taxi from the Munich airport to the Marriott. Realizing I would need some money, I gave the currency exchange people $100 and asked for euros. I got 51 (yikes), but I thought it would still cover my cab fare. Wrong, it was 63 euros including tip. The bottom line is it cost me well over $100 for my cab ride to my hotel which was not that far.

As long advertised in this column, the standard of living for the average American is about to go into the toilet. Reductions of 35% or more are right around the corner.

*The PPT makes sure the DOW goes up and up and up. But, with the dollar tanking, inflation taking off, and the US employment situation remaining dismal, how long can the PPT get away their market manipulation?

*Gene Sterling read the riot act to The Gold Cartel again and ordered another duplicate read to calm down budding gold/silver furor. There are too many pundits saying the sharp move up in gold is a repudiation of Bernanke. That is a serious NO NO in BF land.