Gold didn’t do a lot on Friday, but silver definitely had a mind of its own. It rose throughout the Far East and Europe, but ran into a not-for-profit seller at 9:00 a.m. New York time.

This sell-off lasted until noon, then lo and behold, the price took off again, but it was capped just before the NYMEX close. But all in all, it wasn’t a very exciting day, as everyone just wanted to get the heck away from work and enjoy the long weekend. I’m sure there weren’t a lot of people around after lunch.

Thursday’s open interest showed that gold o.i. rose 497 contracts (probably more shorting) and silver dropped 1,390 contracts.

The Commitment of Traders report for positions held as of May 20th are as follows. The bullion banks in the Commercial category went net short by an additional 3,187 contracts and the Non-Commercial/Tech funds went net long by an additional 3,028 contracts…so the bullion banks matched the tech funds almost contract for contract. The bullion banks went short against every long that the tech funds placed. The ‘8 or less’ traders (bullion banks) in the Commercial category are now net short 77.2% of the entire Comex silver market…a small increase from the previous week’s report.

In gold, there were some really big changes. The Commercial/bullion banks increased their net short position by a monstrous 37,584 contracts while the Non-Commercial/tech funds went net long 29,181 contracts. Not only have the bullion banks matched every change by the tech funds, they’ve also added a bunch of new shorts on top of that. And since Tuesday’s cut-off, Ted Butler feels that the bullion banks have added another 10-15,000 contracts to their net short position during the last three trading days of the week. The ‘8 or less’ traders (bullion banks) in the Commercial category are now net short a new record amount…an absolutely grotesque 81.4% of the entire gold short position on the Comex.

None of this warms the cockles of my heart one iota. Nothing has changed on this week-old rally, as the bullion banks continue to go short against all longs in both gold and silver…although the deterioration in silver wasn’t anywhere near as bad as it was in gold.

Since it’s a long weekend, I’ll really stretch the outside of the envelope with three stories. The first one is a front page story from Friday’s Wall Street Journal…the last place that one would expect to find a story such as this. It’s about the shortage of silver eagles…and without doubt, this story will help fan the flames of desire even hotter than they already are. It’s entitled “Losing a Mint: Curb on Coin Sales Anger Collectors” and it’s linked here.

The second story is one that I promised yesterday about JPMorgan and the woes in Jefferson County, Alabama. I wonder if it will be the first county to declare bankruptcy…as Vallejo, CA was the first city to do so. The item is from Bloomberg and is entitled “JPMorgan Swap Deals Spur Probe as Default Stalks Alabama County”…and the whole ugly mess is linked here.

And lastly, another story involving JPMorgan. Their CEO, Jamie Dimon, definitely had some unhappy thoughts to share at a UBS financial conference in New York earlier this week. This is one of the first indications I’ve seen, from a large American financial firm, that this will be no garden variety recession…and things, as he said, could get “really bad”. (Note to J. Dimon: Jamie, why don’t you just tell the truth and say that this “really bad” recession you talk about is a ‘best case’ scenario…not the worst case. – Ed) The link is here.

I got a request from a reader in Britain for ’something classical’ rather than the ‘pop’ music I’ve been putting up. I didn’t know if youtube.com carried that sort of thing, but it didn’t take me long to discover that they did…and lots of it. The piece I’ve picked was determined more by the artist, than the music itself. I met 15 year old violin prodigy, Joshua Bell, when he came to play with the Edmonton Symphony Orchestra. I think he played the Sibelius violin concerto. He performed for the ESO twice…and after that, we couldn’t afford his fee.

He’s playing in a hall I don’t recognize, and with a first rate chamber orchestra that I don’t recognize either. I’m sure some reader will happily provide the details. Here is (a lot older) Joshua Bell playing the final movement of Beethoven’s Violin Concerto in D minor – Op. 61. I thank Percy L. for the suggestion…and I hope you like my choice…despite the fact that I’m not wild about the cadenza. The link is here.

Now get as far away from a computer as possible for the rest of the weekend, and I’ll see you here bright and early on Wednesday morning.
Source: And Then There’s This…Saturday, May 24, 2008