From Ed Steer:

When gold opened for trading in the Far East on Friday morning, the price began to slowly drift lower about eight bucks...but activity increased in both gold and silver just before the Comex open. Then there were the usual vertical price rallies which were immediately capped. Every time the price of gold snuck up to $750, it got sold off. The price managed to poke its nose up to around $753...with the predictable result...and that was that. Silver's chart looked similar with the price capped at $9.60 the ounce. Friday's Comex volume was much lighter than Thursday's action when we had that capitulation/wash-out in both gold and silver. The shares spent most of the day in negative territory and finished down over six percent.

Gold open interest. on Thursday's big drop...and 'V' bottom...showed an increase of 1,303 contracts to 293,425...and silver's o.i. went the other way, down 722 contracts to 93,612.

Yesterday's Commitment of Traders report (as of the close of Comex trading on 11 November) showed that the changes in open interest in silver were a wash. The big changes were in gold...where the bullion banks sold 4,283 of their long positions and covered a huge 11,193 short positions to improve their net short position by 6,910 contracts...bringing their total net short position down to 69,496 contracts. I can't remember a number this low...but it's been many many years. Ted Butler says that this is the most wildly bullish COT he's seen in years as well...and figures that a huge rally in both metals is forthcoming. I agree...but we'll have to wait and see when JPMorgan allows the gold price to break through $750 first.

I note that Pan American Silver has laid off 500 employees and cut their executives' salaries by 10%. They have also ceased all green-field and brown-field exploration. The usual New York gold commentator stated that ex-duty premiums for India were "lavish for legal imports" and "While there was obvious and probably deadly serious opposition in the $750s going back three weeks, it looks like this week's downward push might have been commercially motivated. If it was...it got Curried." And in a story in the Evening Standard out of London, it was reported that "New data from London-based online gold brokerage Bullion Vault has confirmed that Britons are rushing to buy gold as they lose faith in traditional savings account. Data from the company show that it has grown by 475 per cent in the past year and now has 40,000 British customers and another 30,000 from around the globe."

Believe it or not, the venerable Richard Russell has finally thrown in the towel on the gold manipulation theory...and I quote: "I've never been a big fan of the ‘gold is being manipulated’ thesis. However, I'm now giving the manipulation thesis second thoughts. Most of the world's central banks are now in the process of fighting recession and deflation. This requires government spending and the production of enormous quantities of new fiat money. The last thing the central banks want is for the public to realize what they are doing. Normally, surging gold would be the signal for the public to ask questions -- rising gold is a red flag for the fiat money creators...It's amazing and beyond coincidence the way gold rallies, and then immediately is hammered down below 750. I know that there are huge short positions in gold on the COMEX. I'm no longer a skeptic on the ‘gold is being manipulated’ claim. Somebody is selling gold every time gold rallies toward a breakout above 870 or more properly gold at 750...I don't think the manipulators (if there are such people) can keep it up." (Note to Richard: Your tinfoil hat is on its way by Fedex this a.m. - Ed)

In other news, I see that Brazil and Argentina have decided that they will no longer use the US$ when they're trading with each other. They'll use their own currencies, thank you very much. U.S. retail sales in October were down 2.8%. And from the King Report the other night..."The Fed balance sheet has exploded again! As of Wednesday, the Fed held $2.249 Trillion in crappy paper...up $142.3 Billion on the week...and $1.33 Trillion year over year."

Since it’s the weekend, I have three stories. The first is another story about Russia seriously considering backing the rouble with gold or a gold-backed SDR (Special Drawing Right). The story is from chinaconfidential.blogspot.com and is entitled "Russian Officials Weighing Gold-Backed Rouble" and the link is here.

The second story...the third this week on returning to a gold standard of some sort...is by Walker Todd, an economic consultant with 20 years experience at the Federal Reserve Banks of New York and Cleveland, and a research fellow and conference organizer for the American Institute for Economic Research in Great Barrington, Massachusetts. The story is posted at the Christian Science Monitor and is entitled "Forget Bretton Woods II -- we need a new gold standard" and the link is here.

And lastly, here at the New Orleans Investment Conference, GATA's secretary treasurer, Chris Powell gave the opening speech of the conference. It was entitled "Gold and silver market manipulation update" and the link is here.

No man's life, liberty, or property is safe while the legislature is in session. - Mark Twain (1866)

This week's 'blast from the past' is about 250 years old...but the person who performs it is of very tender years. The vocalist, 12 year old Faryl Smith, was a finalist in the 2008 Britain's Got Talent show. After eleven years on the board of the Edmonton Symphony Orchestra, I'm somewhat an expert on the human voice...like, I know in an instant who’s got the goods, and who doesn't. She has the voice of someone triple her age. What an opera future she's got! This a 'must watch' and 'must listen' video, and the link is here.

The G-20 is meeting in Washington as you read this. Not everyone agrees that a gold-backed currency of any kind is coming out of this wiener roast. Pundits are saying that, with a lame-duck US president in attendance, it will end up accomplishing nothing. They could be right. We'll see.

Enjoy what's left of your weekend and get ready for the Monday morning gold market open in the Far East late on Sunday afternoon.

See you on Tuesday.

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