Gold & Silver Daily
"As I mentioned in yesterday's column, the world's economic, financial and monetary systems are floating off the rails with no hope of survival."

¤ Yesterday In Gold & Silver

Gold did nothing in Far East trading on their Friday.  Then about half an hour after London opened, a smallish rally began that added about twenty dollars onto the gold price...and took it up to around the $1,595 spot level by 11:00 a.m. British Summer Time.

From that point it did next to nothing...although there was a feeble rally in the direction of the $1,600 mark that ran out of gas before 11:00 a.m. in New York.  After that it was pretty quiet price-wise.

Gold's low price tick was around $1,568 spot just over an hour before London opened...and the high [1,598.80 spot] came around 10:40 a.m. Eastern.  Gold closed Friday trading at $1,592.10 spot...up $17.80 on the day.  Net volume was down from Wednesday and Thursday, but still pretty chunky at 145,000 contracts.

Silver traded quietly as well in the Far East year, with the low on Friday occurring the same time as gold's...about an hour before the London open.  But from that low, silver rallied pretty steadily until the same 11:00 a.m. time in London, before trading quietly lower until about 9:00 a.m. in New York.  Then a rally of some substance began that took silver to just above the $29.00 spot price mark by 10:40 a.m. before either the buyer disappeared, or a willing seller showed up.

The silver price sagged a bit from there going into the close, but finished the Friday trading session at $28.72 spot...up 67 cents.  Silver's late afternoon Far East low appeared to be around $27.75 spot...and the high, which came at 10:40 a.m. in New York, was $29.05 spot. Net volume, 43,000 contracts, was only a thousand contracts less than Thursday's volume.

It appeared to me that both gold and silver wanted to go higher during their rally in New York yesterday morning, but a seller showed up before these two metals broke through $1,600 and $29 spot respectively.

The dollar index opened around 81.50 on Friday morning in the Far East...and then climbed 25 basis points to its high of the day about fifteen minutes before the 8:00 a.m. London open.  From there it went into a long, slow decline...and the dollar index closed 65 basis off its high...and down 40 basis points from its Thursday close.

I could be wrong about the dollar index.  The chart above shows that it closed at 81.09...but the actual closing number reported said it closed at 81.29...down only 20 basis points, not 40.  So you can pick the number that suits you.

The gold stocks gapped up and stayed up until gold hit its high around 11:40 a.m. Eastern.  Then, mysteriously, the gold stocks got sold off in four different bouts of selling that are easily visible on the chart below.  Every time the selling ended, the rally began anew.  The HUI went from up about close up only 0.80%.

With the odd exception, the silver stocks did poorly yesterday as well...especially considering how well the metal performed.  Like the gold stocks, they did superbly right up until about 11:00 a.m. Eastern...and then they too got sold down hard as well.  Nick Laird's Silver Sentiment Index closed up a tiny 0.27%.

(Click on image to enlarge)

But having checked the chart of yesterday's DOW action, the decline in the HUI and SSI were almost a carbon copy of the general sell-off on Wall Street yesterday.  The metal itself was a safe place to be...but not the stocks.  And it's hard to tell whether that was normal market action, or by design.  John Embry and others are of the firm belief that the precious metal shares are being managed as well...and a cursory inspection of the 3-year chart of the HUI, XAU or SSI certainly lends credence to that argument.

The CME's Daily Delivery Report showed that 19 gold and 11 silver contracts were posted for delivery on Tuesday.

There were additions to both GLD and SLV on Friday.  GLD added 135,909 troy ounces of gold...and an authorized participant added another big chunk of silver.  This time it was 970,442 troy ounces.  Considering how terrible the silver price action was for most of the week, the SLV managed to add 5.9 million ounces to its holdings during that time period.  Ted thinks that it's all related to the SLV's considerable short position...and I agree.

The U.S. Mint reported selling 130,000 silver eagles yesterday...and nothing else.

Over at the Comex-approved depositories on Thursday, they reported receiving 606,536 ounces of silver...and shipped 1,207,963 ounces out the door.  The link to that action is here.

Well, the Commitment of Traders Report showed reductions in the Commercial net short positions in both silver and gold...but I must admit that the silver number was a disappointment considering the price action during the reporting period.

In silver, the Commercial net short position declined by only 1,991 contracts...and is now down to 15,908 contracts, or 79.54 million ounces.  That's very close to the lows set back in late December of 2011...which were probably equaled or exceeded on the final spike down on Wednesday afternoon just after the close of Comex trading.

As of the Tuesday cut-off, the '1-4' largest traders holding Comex short positions were short 131.3 million ounces of silver, with JPMorgan holding the lion's share of that position.  The '5-8' largest traders are short an additional 37.1 million ounces.

Once the market-neutral spread trades are removed from the Non-commercial category, the four largest short holders in silver are short 28.4% of the entire Comex futures market in silver.  The five through eight traders bring that percentage up to 36.4%.  And if one digs into the Disaggregated COT Report, there are even more spread trades that can be removed, so in actual fact, the percentages are even higher than I've stated.  Eight traders out of hundreds, if not thousands of Comex futures contract holders in silver, have a short-side corner on the market.

I ain't making this up.  These are the government's own numbers.

In gold, the improvement was far more substantial, as the Commercial net short position in gold declined by 12,538 contracts, or 1.25 million ounces.  This brings the Commercial net short position down to 13.9 million ounces.

The '1-4' largest short holder in Comex gold futures are short 9.54 million ounces...and the '5-8' largest short holders are short an additional 4.90 million ounces.  In total the '1-8' largest shorts in Comex gold are short 14.44 million ounces.

The four largest short holders in gold now hold the lowest short position that they've held in five these guys were serious about covering during this latest engineered price decline.

Without doubt the Commercial net short position in both gold and silver improved right up to the lows set on Wednesday.  What has happened since then is another matter.  I didn't have time to talk to Ted Butler about these numbers yesterday, so I'm looking forward to reading what he has to say in his weekend review later today...and I'll steal what I can for Tuesday's column.

Here's the "Days of World Production to Cover Short Positions" of the four and eight largest short holders in all Comex-traded commodities.  The four precious metals hold the top four spots...and have for as long as I can remember...and I can remember quite a bit.  This chart is basically a graph of the '1-4' and '5-8' traders that I talk about in the COT report above...except Nick Laird does it for all physical commodities traded on the Comex.

And, for the first time that I can remember, the short positions held in gold by the 'big 4' and 'big 8' are actually less than those held in platinum.  But the platinum and palladium markets are microscopic in size compared to silver and gold, so I wouldn't read much into that.

(Click on image to enlarge)

The Central Bank of the Russian Federation updated their website with their April numbers...and they showed that they did not purchase any gold during the month...and their official holding still stand at 28.8 million troy ounces.  Here's Nick Laird's updated chart below...for which I thank him.

(Click on image to enlarge)

The next chart is courtesy of Australian reader Wesley Legrand.  Based on Wednesday's close, the Athens Stock Exchange General Index is down 89.7% from the October 2007 peak...and I'm sure it's down over 90% as of yesterday's close.

Being the weekend column, I have a lot of stories for you today...and I hope you can find the time over the weekend to read through all of them.


¤ Critical Reads

Only market manipulation props up Facebook IPO at first day's close

Facebook's life as a public company got off to a faltering start as technology glitches delayed the opening of trading and underwriters had to intervene to prevent its shares falling below the $38 issue price set on Thursday.

The stumbles, however, did not stop the company from celebrating the successful conclusion of the third largest initial public offering in US history on Friday. The $16 billion it raised trails only Visa's IPO in 2009 and a GM share issue in 2010.

Facebook's closely-watched Wall Street debut defied predictions of a spike in first-day trading and contrasted with the scene at its Menlo Park campus just two hours earlier, when founder Mark Zuckerberg pressed the Nasdaq opening bell and employees exchanged high-fives and hugs.

No surprises here, dear reader...and Doug Noland has more to say about it in his Credit Bubble Bulletin a bit further down.  This story appeared in the Financial Times yesterday...and is posted in the clear in this GATA release...and the link to this worthwhile read is here.


Treasury Sells Inflation Notes at Record Low Negative Yield

The U.S. sold $13 billion of 10-year inflation-indexed notes at a record negative yield with investors willing to pay a premium to guard against the threats of rising consumer prices and Europe’s worsening debt crisis.

The Treasury Inflation Protected Securities were sold at a so-called high yield of negative 0.391 percent, the third consecutive auction where investors paid the government to hold their money. TIPS pay interest at lower rates than regular Treasuries on a principal amount that’s adjusted based on the Labor Department’s consumer price index.

While yields on Treasuries due in 10 years or less are below the pace of inflation, demand is at record highs for U.S. government debt amid competition for a dwindling supply of the safest assets. The International Monetary Fund said last month that the amount of global assets that investors consider “safe” will shrink by $9 trillion by 2016.

This Bloomberg story was posted on their website early Thursday afternoon...and I thank West Virginia reader Elliot Simon for sending it along.  The link is here.


Morgan's trading losses rip off public because of ZIRP, Rickards says

Interviewed yesterday by CNBC, geopolitical analyst James G. Rickards said JPMorganChase CEO Jamie Dimon should resign as "a point of honor" over the firm's huge recent trading losses in London. Rickards argues that the losses essentially rip off the public insofar as Morgan is a beneficiary of the monstrous transfer of wealth from savers to banks that has been implemented under the Federal Reserve's zero interest rate policy.

I borrowed the title and the introductory paragraph from a GATA release yesterday.  This must watch 6:35 minute video clip was posted on the CNBC website on Thursday afternoon...and is linked here.  You could tell that Rickards was not a happy camper!


Fed's Bullard: Break Up JPMorgan, Other Big Banks

Another Federal Reserve policymaker on Thursday called for the break-up of big banks like JPMorgan Chase & Co., saying that firm's recent large trading loss underscores the difficulty of regulating such banks and the dangers they pose.

"This is why you want these companies to have plenty of capital," St. Louis Fed President James Bullard said in response to questions after a speech to a Rotary Club. "I would back my colleague (Dallas Fed President) Richard Fisher in saying that we should split up the largest banks."

Bullard's comments echo those of Fisher, who advocates breaking up the five largest U.S. financial institutions. Fisher said in the wake of revelations that JPMorgan had reported $2 billion in losses due to derivatives trades that he is worried that the biggest banks do not have adequate risk management.

Bullard told reporters that his call for breaking up big banks includes JPMorgan.

This story was posted over at the website on Thursday afternoon...and is another offering from Elliot Simon.  The link is here.


The Jig is Up: Doug Noland...Credit Bubble Bulletin

Working at my desk today was somewhat surreal.  Global risk markets were closing out a dreadful week.  Newswires were full of disconcerting articles – J.P. Morgan, Greece, Spain, Italy, China, etc.   Meanwhile, CNBC was in the midst of blanket coverage of the Facebook initial public offering.  Mark Zuckerberg rang the bell to open Nasdaq trading, while helicopters provided live video of the employee gathering at Facebook’s Menlo Park headquarters.  Insiders are now worth billions, the “average” employee millions.  Even U2’s Bono pocketed $1.2bn (with a “B”).  I noted above how I see J.P. Morgan’s predicament as a microcosm of global financial woes.  Well, it is difficult for me today not to see Facebook as emblematic of the incredible transfer of wealth associated with Credit Bubbles.  It’s almost as if this historic Bubble has been waiting to end with just such an exclamation point.

Yesterday's edition of the Credit Bubble Bulletin from Doug Noland was posted on the Internet site yesterday evening...and is an absolute must read.  I thank reader U.D. for sending it our way...and the link is here.


Crisis of Confidence Fears of Bank Runs Mount in Southern Europe

Following the downgrade of 16 Spanish banks by Moody's, the focus in the euro crisis is back on the banking sector. Greeks are withdrawing hundreds of millions from their accounts, with reports that the same is happening in Spain. Experts are calling on the European Central Bank to step in and prevent full-scale bank runs.

The final wake-up call came from Moody's. On Thursday evening, the US rating agency downgraded 16 Spanish banks in one fell swoop, some of them by three notches. On Monday, the agency had already downgraded 26 Italian banks -- including major institutions such as UniCredit and Intesa Sanpaolo. The outlook for all the institutions involved is negative, Moody's said.

These are drastic steps, but they are hardly excessive. The European sovereign debt crisis long ago also became a banking crisis. The fate of the affected countries can not be separated from that of their financial institutions: If a state goes bankrupt, its banks too will struggle to survive. On the other hand, the examples of Ireland and Spain show that a shaky banking system can quickly overwhelm national budgets.

This story was posted on the German website yesterday...and I thank Roy Stephens for sending it along.  The link is here.


Fleeing the Wealth Tax Wealthy French Take Their Assets to London

During the election campaign, French President François Hollande threatened to slap an income tax rate of 75 percent on high earners. Since then, wealthy French have been looking for ways to get themselves and their money out of the country. And nowhere looks more attractive than millionaire-friendly London.

It began in 2010, when wealthy Greeks started coming to London and buying up expensive townhouses in upmarket neighborhoods. Amid fears that Greece might leave the euro zone, they believed their money would be safe in Britain in its splendid isolation from the euro and the Continent's sovereign debt crisis.

Then rich Spaniards started arriving. They were following by well off Italians, who at the start of the year overtook Russians as the biggest group of foreign buyers snapping up property in London, according to a survey.

Whenever the euro crisis heats up somewhere in Europe, the demand for expensive homes increases in Western Europe's largest city particularly among well-heeled foreigners beset by asset angst.

This is another Roy Stephens offering from the website...and the link is here.


Italian lighthouses auctioned off to tackle public debt pile

They stand on imposing headlands with spectacular views of isolated bays and white sandy beaches, some of the most picturesque in the Mediterranean.

But now, as Italy tries to chip away at its mountainous public debt and assuage the concerns of international markets, more than a dozen lighthouses around the coast of Sardinia are to be leased out as boutique hotels, quirky bed and breakfasts, galleries and museums.

The plan comes as the six-month-old technocrat government of Mario Monti, the prime minister, forges ahead with an unpopular programme of tax hikes, labour and pension reforms and other much-needed measures to tackle the country's €1.9 trillion (£1.5 trillion) public debt, the highest in Europe.

The lighthouses are being put up for lease by Sardinia's autonomous government, which says it can no longer afford the cost of maintaining the historic structures, let alone restoring them. The cost of leasing them is not yet known – the Sardinian authorities say they will be auctioned off at "market rates" in the coming weeks.

This is Roy's third offering in a row.  This one was posted on The Telegraph's website yesterday afternoon...and the link is here.


Friday Night Tape Bomb: Spain Hikes Budget Deficit From 8.5% to 8.9%

Just when we though that nobody would take advantage of the cover provided by the epic flame out of the FaceBomb IPO and the ongoing market crash, here comes Spain.

Because there is nothing quite like a little Friday night action following a market drubbing and an "IPO for the people" shock in which to sneak the news that, oops, sorry, we were lying about all that austerity.

Because while it came as a surprise to the market back in December when Spain announced it would post a 2011 budget deficit of 8.5% instead of the previously promised 6%, the market will hardly be impressed that Spain actually overspent by another €4.2 billion, to a brand new total of €95.5 billion of 8.9% of GDP.

This story was posted on their website early yesterday evening...and is another offering from Roy Stephens.  The link is here.


Nigel Farage on the "EU Titanic" and the "Rebirth of National Socialism in Europe"

This "Capital Account" video was posted on the Russia Today website on May 9th, but it's still relevant nonetheless.  The commentary/interview with Nigel starts at the 2:00 minute mark.  I thank Roy Stephens for sharing it with us.  It's well worth watching...and the link is here.


The G8 can talk but the euro's fate lies in the hands of others

There will be no magic wands waved at Camp David this weekend. The euro crisis will be as intense on Monday as it is now and the G8 is extremely limited in what it can do, beyond talk.

The recipe for euro unity is sovereignty sacrifice among each of its 17 members but that prospect is behind the political revolt being witnessed across European cities.

Europe’s financial crisis will keep rolling with the Spanish financial system undergoing defibrillation, Portugal and Italy on the waiting list.

There’s now a month long hiatus before the next Greek election on June 17, which could offer eurozone politicians an opportunity to reconvene and try and reassure markets. But is there any point? To the few remaining fans of the euro, any straw is worth clutching to.

This story from The Telegraph was posted during the London lunch hour yesterday...and is another contribution from Roy Stephens.  The link is here.


There is hope eventually for Greece: Pettifor

Here's some straight talk from economist Ann Pettifor.  Ann witnessed the default in Argentina and says Greece will become extraordinarily competitive after it cleans its house.  This 5:46 minute video interview is well worth your time.  This clip was sent to me by Wesley Legrand...and it was posted on the Australian Broadcasting Corporation website on Wednesday.  It's refreshingly candid...and well worth your time.  No flies on her.  The link is here.


Three stories from the Tehran Times

The first is headlined "Japan questions jurisdiciton of U.S. court order freezing Iran assets".  The second story bears the headline "Medvedev warns against a nuclear war in Mideast".  And lastly is this story headlined "Iran will not relinquish one iota of its nuclear rights: Jalili".  All three stories are courtesy of Roy Stephens once again.


China: Corporate debt reaches 'alarming level'

Chinese companies are operating with "alarming levels" of corporate debt, even though the country's gross debt remains relatively low, according to a study by a top Chinese think tank.

"The high level of corporate debt deserves our attention," warned Li Yang, vice president of the Chinese Academy of Social Sciences (CASS), at an annual public conference held by the International Organization of Securities Commissions (IOSCO), which concluded in Beijing Thursday.

After a one-year study on China's government debt, corporate debt and individual borrowing, a research team led by Li will publish their research results next month, as well as submit the results to the International Monetary Fund.

China's debt levels are still rising and will continue to climb in the future if the current global financial crisis persists, Li said at an IOSCO panel discussion regarding securities regulation in emerging markets.

This story, filed from Beijing, was posted on the Internet site yesterday...and I thank Hong Kong reader Graham C. for sending it along.  The link is here.


China's towering metal stockpiles cast economic shadow

When metals warehouses in top consumer China are so full that workers start stockpiling iron ore in granaries and copper in car parks, you know the global economy could be in trouble.

At Qingdao Port, home to one of China's largest iron ore terminals, hundreds of mounds of iron ore, each as tall as a three-storey building, spill over into an area signposted "grains storage" and almost to the street.

Further south, some bonded warehouses in Shanghai are using carparks to store swollen copper stockpiles - another unusual phenomenon that bodes ill for global metal prices and raises questions about China's ability to sustain its economic growth as the rest of the world falters.

This Reuters story was filed from Qingdao, China yesterday...and I thank reader Andrew Holland for bringing it to my attention.  The link is here.


Gold: The World's Friend for 5,000 Years - Frank Holmes

While gold may not go up vertically from here—as frequent readers know, the yellow metal historically has fallen in June and July—with the extraordinary events occurring in Europe, I believe investors will soon “friend” gold once more. As we wait for the central banks around the world to act, I encourage investors to consider dollar-cost averaging. It’s a way to stay invested, and more importantly, to avoid making emotional investment decisions.

Frank has several things to say about gold...and they're found scattered through this commentary that was posted on his Internet site yesterday.  I thank Elliot Simon for his third offering in today's column...and the link is here.


Jim Rogers: Buy Gold, Silver Before ‘More Turmoil’ Jolts the Globe

Roiling capital markets aren't going to calm any time soon so investors would be better off putting their money in hard assets like gold, silver and agricultural commodities, says international investor Jim Rogers.

Greece is teetering on the brink of default, while the debt crisis appears to be spreading to Spain, as evidenced by a Moody's decision to cut ratings on 16 banks there.

"The world's got serious problems facing it, I don't particularly like saying it, but it's true," Rogers told

"Unfortunately there will be more debt and currency turmoil to come."

Last week Jimmy said that gold might drop precipitously...and he wasn't a buyer.  Now he's got both arms and legs wrapped around the stuff.  I never consider Rogers a good indicator for gold, as he doesn't hold the metal with any conviction.  He sounds a little like Dennis Gartman in that respect.

I thank reader Lou Horner for sending me this piece that was posted over at the website yesterday...and the link is here.


Two King World News Blogs

The first is with Hinde Capital Management CEO, Ben Davies.  It's headlined "The Gold & Silver Liquidation is Over".  The second blog is with Eric Sprott...and it bears the title "Governments Frightened of Panic Liquidation Event".  Both of these blogs are well worth your time.


The Physical Gold Market - From the Weak to the Strong

We left off yesterday wondering why the market had turned on gold recently - the supposed "safe haven" metal. But we woke up this morning and saw things had turned surged 2% overnight as the US markets sank around 1.5%.

No doubt this type of price action will confound many investors...especially those who sold in a panic in the last few weeks. The recent sell-off amongst the gold stocks is up there with 2008 for severity.

In a clear example of how the emotional decisions of investors send price diverging from value, gold stocks have plummeted while the Aussie dollar gold price, which, along with production, determines revenue, is only slightly lower.

The gold price certainly does move in mysterious ways. Today our task is to try and work out why. To do so, we need to look into the mysterious world of the London gold market.

This article was posted over at the website yesterday...and I thank Wesley Legrand for sharing it with us.  The link is here.


Higher gold price needed to sustain mining – Gold Fields

Gold will need a higher price to sustain mine production, says Gold Fields CEO Nick Holland.

Announcing lower net group March quarter earnings of R2 082-million ($268-million) compared with higher December quarter earnings of R2 605-million ($336-million), Holland puts the all-in cost of producing an ounce of gold at $1 400 and says the gold-mining industry will need prices higher than the current $1 500/oz to maintain output at 70-million to 75-million ounces a year.

“If we’re going to replace the ounces being mined out…we’re going to need higher prices,” he says, adding that analyst forecasts need to be moderated upwards.

This story was filed from Johannesburg on Thursday...and was posted over at the website...and my thanks to reader Richard Murphy for sending it.  The link is here.


Bloomberg Interview GoldCore on Chinese and Global Gold Demand

Goldcore’s Mark O’Byrne was interviewed by Bloomberg yesterday discussing the World Gold Council Report, Gold Demands Trend (Q1 2012) - Enter The Dragon, on demand in Asia.  “We could be witnessing a paradigm shift from China on bullion demand”, Mark O’Byrne also notes, “that the gold market was liberalised in China in 2003 and prior to that gold ownership was banned in China by Chairman Mao.  The per capita consumption of 1.3 billion Chinese consumers, investors and central bank demand are very significant."

This interview was posted on the Bloomberg website on Thursday...and runs for 4:42 minutes.  It's Roy Stephens final offering in today's column...and the link is here.


Embargoes push Iran into remonetizing gold

Turkish gold sales to Iran in March soared over 30 times and gold companies said Iranians were turning to gold for savings and possibly trade as Western sanctions tighten.

Sanctions to force Iran to curb its nuclear programme have targeted its energy and banking sectors and new measures from both the United States and European Union take effect in July, aimed at strangling Tehran's foreign earnings.

The sanctions have made neighbouring Turkey an ever more important channel for the Islamic republic.

Data from Turkey's Statistics Institute on Thursday showed gold exports to Iran rose to nine tonnes, worth $480 million, in March, from 286 kg a year earlier and compared to just 30 kg in February this year.

This Reuters story was filed from Istanbul on Thursday...and bears the headline "Turkish Gold Sales to Iran Soar as Sanctions Bite".  I found this story in a GATA release yesterday...and the link is here.



¤ The Funnies


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Drilling Intersects 102 Meters of 1.97 gpt Gold at Columbus Gold’s Paul Isnard Gold Project; Drilling Confirms Depth Extension of Gold Mineralization

Columbus Gold Corporation (CGT: TSX-V) (“Columbus Gold”) is pleased to announce results of the initial five (5) core drill holes at its Paul Isnard gold project in French Guiana. The holes confirm depth extension of gold mineralization below shallow holes drilled on the 43-101 compliant 1.9 million ounce Montagne d’Or inferred gold deposit at Paul Isnard in the 1990’s and support the current program of resource expansion through offsetting open-ended gold mineralization indicated by the earlier holes.

Robert Giustra, CEO of Columbus Gold, commented: “These drill results validate Columbus Gold’s approach to adding ounces with a lower-risk drilling program designed to infill and to extend the mineralized zones to 200 m vertical depth from surface; a depth amenable to open pit mining.” 

Fourteen (14) holes have been completed (assays pending) by Columbus Gold in the current program and drilling is progressing at the rate of about 3,000 meters per month with one drill-rig on a 24 hour basis. Columbus Gold plans to accelerate the current program by engaging a second drill-rig as soon as one can be obtained. 

Please visit our website for more information about the project.


¤ The Wrap

When legislators, after having ruined men by war and taxes, persevere in their idea, they say to themselves, 'If the people suffer, it is because there is not money enough. We must make some.' And as it is not easy to multiply the precious metals, especially when the pretended resources of prohibition have been exhausted, they add, 'We will make fictitious money, nothing is more easy, and then every citizen will have his pocket-book full of it, and they will all be rich.' -- Frédéric Bastiat

Today's 'blast from the past' goes back forty-five years.  How is that possible?  It seems like just yesterday.  I was 19 years old when this was a #1 hit.  Too soon old, too late smart.  Everyone should know this turn up your speakers and then click here.

It was another up day again yesterday, but I still had the feeling from looking at the chart action, that gold and silver weren't allowed to get very far.  As I keep saying, maybe I'm looking for black bears in dark rooms that aren't there...but that's just the way I feel about it.

If you look at the 3-year chart of either gold or silver, you'll note that we never have the big consecutive up days like we have big down days. I guess that may be possible in a free market, but as Eric Sprott said in his King World News blog further up...“I put it all down to the shenanigans that have gone on at the COMEX.  As you know, some of the major dealers, who are embroiled in some of their own issues outside of the gold market, were short gold and silver."

"I think the downtrend was engineered because when you look at the physical aspects of gold, they seem totally different than the paper aspects of gold.  The major dealers, who have now massively covered their short positions, orchestrated the takedown in the face of fundamentals that were just screaming to buy gold and silver."

As I mentioned in yesterday's column, the world's economic, financial and monetary systems are floating off the rails with no hope of survival.  If everything that wanted to blow sky high, or crash and burn, was allowed to happen without any 'malignant government/banking system intervention'...then the world would be a smouldering ruin within five business days.

And it still may happen.

With the lows apparently in place for this move down in the gold and silver markets, there's still the opportunity to either readjust your portfolio, or get fully invested in the continuing major up-leg of this bull market in both silver and gold...and I respectfully suggest that you take a trial subscription to either Casey Research's International Speculator [junior gold and silver exploration companies], or BIG GOLD [large producers], with all our best (and current) well as the archives. Don't forget that our 90-day guarantee of satisfaction is in effect for both publications.

I'm done for the day...and the week.

See you on Tuesday.