Gold closed at the comex today at $1432.90 for a gain of $23.60. Silver also advanced finishing the comex session at $34.61 up 81 cents. Our banker friends will not sleep well tonight as they ponder their next move.

In silver as I have pointed out to you on many occasions, the collective short position of all the banks is around 7 billion oz. This is made up of 4 billion oz in forwards which is the actual borrowing of metal and selling it forward, and 3 billion oz of naked calls against non existent silver. I would love to be a fly on the wall hearing what they plan on doing late tonight and tomorrow.

And now for silver:

I will report that all months are still in backwardation. The total silver comex OI rose by 735 contracts to 136,214 from yesterdays reading of 135,479. With silver's stellar performance yesterday I guess we lost quite a few banker shorts. The front delivery month of March saw its open interest drop from 4250 to 2833 for a loss of 1417 contracts. The deliveries yesterday were only 250 contracts. Since the OI rose a net 735 contracts -250 deliveries or 485 contracts, we no doubt had considerable cash settlements of approximately 1000 contracts or 5 million oz and no doubt a handsome profit to the cash settlers. The new front month of May saw its OI rise from 82,657 to 84,753 for a gain of 2096 contracts. It seems that the cash settlement boys put their newfound cash into the May contract and they pray that they can play again in May and receive fiat with a handsome premium. The estimated volume at the silver comex was very good at 52,137 today. The confirmed volume yesterday was excellent at 63,649 contracts. The volume increase shows demand increasing. The drop in the front delivery OI is due to cash settlements and then reentering the May futures contract.