From Ed Steer:

The top for the gold price, in early morning Far East trading on Tuesday, was shortly after midnight last night...Eastern time...which is lunch time in Hong Kong. From there, it followed its usual path from upper left to lower right...with the low being at the close of regular business on the Comex in New York yesterday.

Silver was an entirely different animal, with a mind all its own. It took off right from the Globex open in the Far East on Tuesday. Its top was in at the Hong Kong open...which is 8:30 a.m. over there. Then, it too, was taken down...particularly at the Comex open. But then it rallied smartly, and the price had to be restrained a couple of times, as it went either parabolic...or vertical...on more than one occasion. However, it was not allowed to close on its highs. Volume was mediocre in both metals yesterday...but a little higher than Monday's volume.

As far as changes in open interest go, both gold and silver o.i. continue to shrink. On Monday, gold o.i. fell another 3,147 contracts...and silver o.i. continued to disappear...down another 753 contracts.

The usual NY gold commentator had this to say about European Central Bank activity last week...”The ECB weekly statement of condition indicated that ‘gold and gold receivables’ fell 41 million Euros last week -- down 2.16 tonnes at the current book value -- said to be the result of a sale by one captive CB. This compares with 7.59 tonnes last week, and of course is well below the 9.6 tonnes notionally required if the entire WAG2 quota was to be sold evenly through the year.”

I used the world 'parabolic' when I was speaking of the silver price in a previous paragraph. Here's another parabolic chart that's worth looking at. It's the Almighty US Dollar. As I write this in the wee hours of Wednesday morning, I see that it has rocketed up another 1.228 cents. Looking at the 3-year chart for the greenback, one would like to think that this rally is on its last legs. I realize that there's a short dollar/long 'everything else' carry trade unwinding out there...but hey!...I wouldn't bet that this rally is going to last much longer. When the music does finally stop, the fall from these lofty heights could be ugly.

click to enlarge

In a Reuters story filed out of Mumbai, "Indian traders...are scrambling to stock up on silver"...as silver sales are said to be up five-fold from the same period last year. India has been importing about 250 tonnes per month lately. The problem is, once again, supply...as "Many banks are unable to get silver even if we tell them we will give them the full sum of money for the consignment." said one wholesaler in Chennai. I also note from lemetropolecafe.com that Spain's biggest bullion dealer is out of silver and only has half-kilo and one kilo gold bars left. In a Reuters story out of Zurich, I note that "Swiss wealth manager Julius Baer is launching a pure physical gold fund to address increasing demand by nervous clients to invest in the precious metal...The fund will be listed on the SWX Swiss Exchange. Redemption in kind is possible." The GLD was down an insignificant 20,000 ounces yesterday...and the SLV was unchanged once again.

Today's first story (a short one...only six paragraphs long) is from The Independent in London. The title says it all..."Spending on gold nears $3 billion as investors flee shares"...and the link is here.

Since Monday morning, I must have seen a couple of dozen stories about zinc, lead, palladium and platinum mines being closed all over the world. At current prices, the miners can't dig anything out of the ground without incurring huge loses...and it matters not which country is doing the producing...as this story from metalbulletin.com points out. It's actually only part of a story, as you have to be a subscriber to see it all...but you'll get the drift of it in a real hurry from the few lines that are available. It's entitled "Zinc price decline squeezes China smelters, mines" and the link is here.

And lastly, here's a video clip that's well worth watching. Sprott Asset Management's chief investment strategist, John Embry, went on Business News Network in Canada yesterday morning and, interviewed by Amanda Lang, discussed among other things, the suppression of the gold price on the New York Commodities Exchange. Embry speculated that long contract holders may call for delivery of enough December contracts as to prompt a claim of force majeure when the exchange cannot deliver enough real metal. The interview with Embry begins at the 11-minute mark and continues for about 6 1/2 minutes at the BNN Internet site. The link is here.

It's hard to know what to think in this bizarro world we wake up in every morning now. The 'money out of thin air' creation is already way more than I ever expected to see this early in the credit bust cycle...and it's already gone global. I can't imagine what it will be like once we get into the new year after what I believe will be a horrible Christmas shopping season for all retailers...and this "Greater depression" as Doug Casey puts it...really starts to take hold with a vengeance.

I hope your Wednesday goes well, and I'll see you here tomorrow.

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