From Ed Steer:

There wasn't much to comment on in gold and silver action in the Far East until London opened for business on Wednesday. Then prices rose until the London silver fix was in at 7:00 a.m. New York time. Then both metals got sold off. The silver price bottomed a couple of hours later, but gold worked its way down slowly to its low, which was almost at the end of regular trading in New York.

There wasn't a lot of volume yesterday, so I wouldn't read much into this. Options expiry in the OTC for both precious metals is today...with first day notice for September silver delivery being tomorrow. For the most part, this week's activity in the gold and silver markets has been a big yawner.

The usual NY gold commentator had the following to say about Wednesday's market..."India is clearly an extraordinarily eager importer of gold at present. Reuters carries another confirming story today: ‘Demand has been phenomenally high. It has been around 20 days since demand revived,’ said Mayank Khemka, managing director of Khemka International Pvt Ltd, a New Delhi-based trader…Reflecting gold's popularity, supply shortages have persisted in India with premiums up to $6 an ounce and delays in deliveries of up to a week, dealers said.

"Yesterday's (Tuesday) violent struggle – a $24 range and an up $2.40 Comex close – saw open interest rise a fairly significant 4,634 lots (14.4 tonnes). Hard to diagnose except to say both sides are aggressive.

"Gold today (Wednesday) was at one time $834.90 in the middle of the European day but was as usual wrestled down some $7 in NY to close up $5.90. Volume was moderate by today's standards – estimated 106,204 contracts.

"It should be noted the Indians are regularly accepting world gold in the $830s, even before the bloated premiums they face are considered."

I see in a Wall Street Journal story yesterday that the "Federal Deposit Insurance Corporation (FDIC) might have to borrow money from the Treasury Department to see it through an expected wave of bank failures...The last time the FDIC borrowed funds from Treasury came at the tail end of the savings-and-loan crisis in the early 1990s after thousands of banks were shuttered. That the agency is considering the option again, after the collapse of just nine banks this year, illustrates the concern among Washington regulators about the weakness of the U.S. banking system in the wake of the credit crisis." Sounds like another bailout to me!

The first story today is from The Telegraph in London. The author, as usual, is Ambrose Evans-Pritchard. He comments that "rule changes for Chinese commercial banks are acting as cover for exchange rate intervention." The story is headlined "Beijing swells dollar reserves through stealth". It sounds as boring as hell...but I urge you to take the time to read it, as it indicates one of the reasons why the US$ has been rising...and the dire straits into which the Chinese economy has fallen as of late. The link is here.

The second story today is a GATA release with a long editorial introduction by its secretary treasurer, Chris Powell. Chris is an editor in real life...the senior editor at the Journal Enquirer in Manchester, Connecticut...and it reminds me of that early 20th century adage that you should never get into a fight with someone who buys their ink by the barrel. Chris is at the top of his game as he takes Mike Shedlock of Sitka Pacific Capital Management to task for his latest commentary. There's lots to read, so top up your coffee and then click here.

Governing a large country is like frying a small fish; you spoil it with too much poking. - Lau Tsu

I see that Casey Research is having an online 'webinar' on September 12th at 3:00 p.m. EST. The best part about it is that it's F-R-E-E. It features Doug Casey, David Galland, Bud Conrad and Terry Coxon. Needless to say...I highly recommend it. To register...click here.

Tomorrow is Friday...and the end of the month. I expect the usual gaming in the equity markets in the next couple of days...none of which will mean anything. This is another August that I'll be glad to see behind us.

Talk to you on Friday.

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