Gold flat-lined throughout Far East trading and only showed life when London opened. Virtually all the gains in the gold price were in by the time the traders in New York showed up for work.

Although gold made a new intra-day high for this move, the price was capped the moment London closed. Only about $3 of gold’s excellent move on Friday was in New York trading. However, it’s nice to see a $900 handle on the gold price once again. Let’s see how long it lasts.

Silver appeared to show little enthusiasm, but it continued to work its way slowly higher from the moment that Globex trading began in the Far East on Friday morning. The three small rallies that occurred in New York trading were all sold down by some not-for-profit seller. According to Kitco, silver made an intra-day high of $17.08…but it got sold hard at the London close, and actually finished lower in price than when it opened on the Comex. The silver price really wanted to break out strongly, but someone (or more than one someone) was there to make sure that that didn’t happen. Can’t have silver strongly confirming the gold price break-out, now can we?

Open interest for Thursday was interesting. In gold, o.i. rose 4,412 contracts, so Thursday’s price run-up was not due to much short covering. It now appears that it was mostly new buyers. Were they the tech funds? Don’t know…but maybe…probably. The price action next week should tell us a lot, as we broke above the 20-day m.a. by a substantial $19 yesterday.

In silver, the o.i. increased a minuscule 8 contracts. Friday’s price close was less than a dime above its 20-day m.a. If the tech funds were responsible for the 3 short rallies in silver on Friday, they got stuffed right away. Heaven only knows how high the silver price would have gone if those previously mentioned non-for-profit sellers hadn’t been lurking about.

The Commitment of Traders report for positions held as of 13 May 2008, didn’t show much of anything in silver. The ‘technically inclined’ in the Non-Commercial category went net short another 1,100 contracts or so…and the Commercials added 191 long positions and covered 688 short positions. Almost a big zero all around. In gold, there was a little more action. The players in the Non-Commercial category added 5,090 contracts to their long position and went short a further 8,119 contracts. The bullion banks (Commercials) added 7,051 longs and 1,920 shorts during this reporting period. It will, of course, be of great interest to see who went long (and short!) in the $35 price increase we’ve had in the last two trading days of this week. Concentrations? Currently, the bullion banks (’8 or less’ traders in the Commercial category) are short 78% (silver) and 76.5% (gold) respectively, of the entire Comex silver and gold short position. The CFTC sees nothing wrong with this at all.

One thing of note in the gold world yesterday…Dennis Gartman has gone long gold once again. He hasn’t always been right about picking tops, but he’s had an uncanny knack for picking bottoms. It will be interesting to see how this turns out. Needless to say, we will all be delighted if he’s right…yours truly, included!

Since today is Friday…as I write this…I’m cleaning out my in-box, and couldn’t resist passing along the following set of pictures. I remember the eruption of Mount St. Helens back in 1980 very well. We even got a little ash as far north as Edmonton, where I live. Another volcano, this one in the Andes Mountains in Chile, decided to erupt two weeks ago…and a dozen excellent photographs are linked here.

As usual, I’ve got two stories today. The first one is from mineweb.net and is a report on first quarter de-hedging by the gold miners. It’s entitled “Global gold hedging declines by 4.8 Moz in Q1/08 to 22.0 Moz”. The link is here.

The second story is somewhat off the beaten track. Actually I was surprised that an article like this would show up at all…especially on Bloomberg. It’s an exposé on Jacob Zuma, who is poised to become South Africa’s next president. Having been in Africa and seen some of the tribal politics of that continent first hand, you’ll excuse me if I have some deep reservations about how his tenure may unfold…think Robert Mugabe in Rhodesia…now Zimbabwe. I have no investments in South Africa…and don’t plan on any…ever. The link is here.

Political language is designed to make lies sound truthful and murder respectable…and to give the appearance of solidity to pure wind. – George Orwell

Today’s fun youtube.com video idea came from another reader of my daily rant. But I found a version that I liked a little better…and that’s the one that’s posted here…but a big thank you to Karen for coming up with the piece in the first place. The link is here. Enjoy!

With consumer confidence reported to be at a 28-year low, the Dow only managed to lose six whole points. If it had been a 35-year low…or greater…without a doubt, the Dow would have been up triple digits. Maybe something like that will happen next week.

Enjoy what’s left of your weekend, and all of us at CDR+ will see you here on Tuesday morning.

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

Source: And then there’s this…Saturday, May 17th, 2008