Silver and gold had some smallish gains in Far East trading on Friday morning, but once London opened, the upward momentum vanished...and then was extinguished the moment that the Comex in New York began trading. The bottom in both metals occurred shortly after 10 a.m. NY time. The ensuing rally lasted for a couple of hours before it flat-lined into the close in after hours trading on the Globex.

Once again, the 50-day moving average in gold was challenged, but not penetrated. Without doubt, there was more long liquidation on Friday...but how much won't be known until Monday morning. Options expiry is at the close of trading on Monday. If this is the best the boyz can do...then things could get real interesting from hereon in.

Open interest in gold rose 3,697 contracts on Thursday's smallish price gain. It's not possible to read anything into that, so I won't even try...and I don't have the silver o.i. number for Thursday.

The Commitment of Traders report held no real surprises. In silver, the tech funds in the Non-Commercial category pitched 2,300 of their long contracts, and the bullion banks in the Commercial category covered 2,239 short positions and pitched 129 of their long contracts...so they improved their position by 2,110 contracts. In gold, the tech funds sold 9,764 longs positions and covered 1,634 of their shorts for a difference of 8,130 contracts. On the other side of the ledger, the bullion banks went long 2,036 contracts and covered 7,480 shorts...improving their position by 9,516 contracts. This leaves the bullion banks still short a massive 345 million ounces of silver and 23.7 million ounces of gold...hardly much of an improvement at all, considering that gold is down $60 and silver is down $2+. Is this the best they can do, or are they saving it for August? As far as concentration ratios go, the '8 or less' traders/bullion banks are short 81% of the entire Comex market in both gold and silver. Without question, there has been further improvements in the COT numbers for both gold and silver since the Tuesday COT cut-off, but as I've mentioned several times earlier this week, we won't find out until next Friday...which is forever in such a quickly changing market. Here's the link to the latest COT report. Click here.

Talking about the '8 or less' or '4 or less' traders in the COT, here's a very interesting chart that's been updated from an essay Ted Butler wrote last year. It shows the number of days world production that the 4 largest and 8 largest short traders hold in a variety of commodities. Both silver and gold stand out like a sore thumb. I thank Carl Loeb for doing the heavy lifting on this.

click to enlarge

A couple of financial tidbits to ponder. In the land 'down under', the National Australia Bank took the bit between its teeth and wrote down its exposure to the US property market by 90% in one fell swoop! $1.2 billion suddenly morphed into $120 million...and over $1 billion went to money heaven. And talking about money heaven, things are looking rather grim over at Washington Mutual these days as "many creditors have quietly been pulling funds" from the Seattle-based thrift.

The first story today is from Bloomberg. It's hard not to think of April Fool's day when I read stuff like this. Someone is dreaming in Technicolor if they think this will fly. The headline reads "Congress Pursues $80 Oil With Trading Limits, Disclosure Rules". Something tells me that we're not in Kansas anymore, Toto. The link is here.

The second story is about gold. In a story written by Frank Tang of Reuters that was released late Friday afternoon, the headline reads "Gold options point to $1,200". From his lips to God's ears! It can start anytime! The link is here.

Every government interference in the economy consists of giving an unearned benefit, extorted by force, to some men at the expense of others. - Ayn Rand

In today's 'blast from the past' we return to the "land down under" mentioned in a previous paragraph. Turn up your speakers and enjoy. The link is here.

As usual, there was absolutely no follow-through to the downside allowed on Friday after Thursday's big Dow sell-off. The markets wants to die, but the President's Working Group just won't let them. But it matters not. Wall Street and the entire US banking system isn't worth a thin dime...and one of these days, all the efforts of the PPT won't mean a thing.

Enjoy the rest of your weekend and I'll see you here on Tuesday morning.