There was very light trading on the Globex in both gold and silver on Monday. A small rally that started shortly after New York opened for business was quietly capped the moment that trading in London ended for day. This is so typical.
Open interest for gold on Friday fell another 1,770 contracts. As for silver, it was down another bunch…3,278 contracts. This was quite a bit considering that volume on Friday was also on the light side. It was probably a combination of switches, spreads being lifted and long liquidation/short covering. This should show up in Friday’s COT. First day notice is tomorrow in both metals, but May is a big delivery month for silver, so most of the action should be in that metal. Ted Butler mentioned to me that there was big buying in the SLV ETF yesterday…despite the low Comex volume. We also have the FOMC meeting coming up shortly, so be prepared for anything in the short term.

We are still well below both the 20- and 50-day moving averages in both metals, so the tech funds aren’t a huge factor in this market at the moment. If they were, the volumes would be a lot higher and prices would be moving to the upside. However, while we’re waiting for that to happen, here are two questions that will need answers: 1) is the Cartel through with their down-side price management…or more succinctly…are the 200-day moving averages still in their sights, or are they just about finished? Secondly; if and when the tech funds do return to the market, will the Cartel be there to take the short side of their trades once again, which is what they’ve been doing for decades. Remember, if these ‘8 or less’ traders (the bullion banks) weren’t going short for every long…the prices of both metals would explode to the upside as there would be nobody (and I mean nobody) to take the short side of the tech fund longs until astronomically higher prices were attained. As I’ve said before, unless it’s an exogenous event, it’s the dance between the tech funds and the Cartel that always determines what the prices are doing.

Lots of stories to pick from today, and I’m not happy about having to limit it to two. Maybe I’ll have more space for them sometime later this week. The first story is from last Friday, but is worth mentioning here, as the guy doing the talking is no dummy. Nobel Laureate Joseph Stiglitz had a few things to say on CNBC about the recession that the U.S. is in…and how bad it could get. The story is linked here.

The second article is from my good friend James Turk over at goldmoney.com. This piece is entitled “Another Record Low in the Dollar”. It contains the usual wonderful graphs…and it’s all linked here.

I read in a story out of Britain…that the British bank bailouts now underway are to be kept secret…forever. Not only a permanent news blackout, but any requests for information under the Freedom of Information Act are to be denied…even after 30 years. It probably won’t be long before this type of secrecy is everywhere.

It now appears that everything my grandfather fought for in Belgium and France during WW1 was for naught.

See you tomorrow.

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