From Ed Steer:

Well, the gold chart looked pretty bleak very early Friday morning...with gold touching the $880 level in London as I turned my computer off from writing Friday's rant. I must admit that I turned the computer back on about lunch time yesterday with some fear and trepidation, but was pleasantly surprised that the price I'd seen last night [just before the London a.m. fix] was the low tick of the day. From there it worked its way a few dollars higher...right into Comex floor trading in New York. But a tiny attempt to run to the upside into positive price territory, that started just before noon Eastern, ran into another not-for-profit seller about an hour later. From there, gold sold off quietly into the close of electronic trading on the Globex. According to the usual New York commentator, estimated volume was 50,990 lots with a switch effect of 7,874 contracts.

Although it may not have seemed like it at first glance, the real 'wow' chart of the day was silver once again. It [like gold] ran into the mysterious 3:00 a.m. seller and sold off right into the London silver fix, which is 12:00 noon...7:00 a.m. in New York. The moment that the silver fix was in, the price got nailed for 20 cents in a matter of minutes. Ted Butler said that this smack-down [most likely by JPMorgan] blasted around 1,000 Non-Commercial long positions out of the water. From that obvious low point, silver began a quiet but intense rally that moved it into positive territory for the day...but obviously, it too, attracted the attention of the same not-for-profit seller as gold did...and at precisely the same time. Nothing free-market about all this. The last three days of silver trading are on the Kitco chart below. The blatant in-your-face price management of the last couple of days is obvious for all to see.

click to enlarge

Open interest changes for Thursday's big slide in both gold and silver are [as I said yesterday] difficult to interpret because there are so many switches. Gold's o.i. dropped 2,582 contracts to 329,066...which on the face of it, wasn't a lot. Volume was a stiff 89,245 contracts. In silver, o.i. actually rose 44 contracts to 89,263. Volume was reasonably heavy...23,749 contracts. It is impossible to get an accurate handle on what Thursday's o.i. numbers mean until next Friday's COT.

The new COT came out yesterday...and it was as both Ted and I expected. There was deterioration in both gold and silver. In silver, the deterioration was a bit more than expected. The bullion banks increased their net short position by 2,289 contracts...as all the traders in the other two categories went long...or reduced their own short positions. The net short position in silver increased to 137,300,000 ounces...up a hair over 11 million ounces for the prior week.

In gold, the changes were very small. The bullion banks increased their net short position by 3,811 contracts as the tech funds and small traders went [net] longer. The bullion banks are now net short 15.3 million ounces of gold...that's as of Tuesday's cut-off. It certainly has declined since then. Yesterday I estimated it to be around 13 million ounces.

Silver deliveries continue. Yesterday...1,339 contracts were delivered. The big issuer was Deutsche Bank Securities [1,000 contracts]. The biggest receiver/stopper was the Bank of Nova Scotia [814 contracts]. There were quite a few smaller receivers and stoppers as well. It was a busy day. In gold, there 55 contracts delivered.

Comex-approved warehouse stocks rose by 591,896 ounces. I now have the U.S. Mint's closing eagle numbers for April. On Thursday they added a smallish 500 one-ounce gold eagles to April's numbers bringing the final total up to 147,500. In silver, they added 38,500 to bring April's silver eagle totals up to 2,518,000...the second biggest month of the year. There were no changes in GLD or SLV either.

It was a sort of 'nothing' day in the precious metals...as most of the world was shut down for the May Day holiday. Even the usual New York commentator had nothing of interest. One of the only decent gold stories I could find was one posted over at Kitco. It's from Business Intelligence in the Middle East. The article is entitled "Falling gold mine production will support prices". It's sort of a re-hash of what you may have already read...but on a slow news day...it's the best I could do. The link is here.

There's not a lot of 'other news' either. I have three stories today which may, or may not, be of interest to you. The first one is from Bloomberg. It appears that the FASB [Financial Accounting Standards Board] is about to approve a rule that will add hundreds of billions of dollars worth of 'assets' and liabilities which banks and other companies have been hiding off their balance sheets. The rule won't take effect until next year...but if/when it does, we'll find out in a real hurry where all the bodies are buried. It will be ugly. The headline reads "FASB to Act on Off-Balance-Sheet Rule Change by June, Herz Says". I thank Casey Research's John Grandits for sending it along...and the link is here.

The next story is from creditwritedowns.com and bears the heading "CDS contracts and the implosion of several Eastern European economies". It's very well written and not hard to follow. There is also a link at the end of that piece entitled "Insight: Kazakh banks fall foul of CDS" by Gillian Tett from the Financial Times that's an absolute must read as well. If you get the idea that things are imploding over there...you would be right about that. I thank Craig McCarty for 'two-stories-for-the-price-of-one' story...and the link is here.

And lastly in a story at marketwatch.com, comes this news item filed from Tokyo. The headline pretty much says it all. It reads "China gold buy raises eyebrows for all the right reasons". The link is here.

The new systemic risk to the system is the U.S. Congress. -- James Robinson III, ex-CEO of American Express

Here's another 'blast from the past'...this time from 1978. A timeless classic from a great artist. Please turn up your speakers and then click here.

Another week come and gone. Everything out there is right out of Alice in Wonderland. It doesn't make any difference whether you take the red pill or the blue pill...and as the quote goes in Hotel California..."you can check out any time you want, but you can never leave." If that's the way you're feeling about things right now...I can certainly empathize and sympathize.

As I mentioned yesterday, I'm off until May 14th, and I'll see you then.

All of us at Casey's Daily Resource Plus hope you enjoy the rest of your weekend, and we [except for me!] will be here bright and early Tuesday morning.

Casey Research correspondent-at-large Ed Steer is a keen observer of the financial scene and a board member of GATA.org.