From Ed Steer:

Gold drifted very slowly and very quietly higher all through Far East trading on Tuesday. But it really caught a tail wind shortly after London opened for the day...and from there it was away to the races until the price was quietly capped at lunchtime in New York. Silver rose until 3 p.m. yesterday afternoon in Hong Kong, and from there it did nothing right into the Comex open, where its attempts to blast off were repeatedly thwarted...with the high of the day occurring at precisely the same time as gold. Funny how that works...isn't it?

Yesterday's volume in gold (net of switches) was around 110,000 contracts. Monday's gold open interest fell 1,617 contracts to a new low of 261,001. Silver o.i. also retreated...this time by 340 contracts...down to 83,476. Ted Butler pointed out that yesterday was the first time (since the beginning of August) that both gold and silver closed above their 50-day moving averages on the same day. That's how badly the silver price was killed. You can tell from that bit of info how desperate the bullion banks were...principally JPMorgan...to cover their silver short positions.

A quick comment on the US dollar. Everyone's saying that the top is in. The daily chart shows a classic head-and-shoulders pattern...and the weekly chart (below) is a thing of beauty. It looks like a top to me...and the RSI and MACD are ominous for the near term future of the common stock of the United States. The gold price is obviously starting to confirm that.

click to enlarge

In gold and silver news, I see in a story filed at balkaninsight.com that a Romanian court "has denied Gabriel Resources a key permit for its Rosia Montana project in Romania, dealing another setback to the project." And in a Reuters story dated Dec. 5th...."Striking Mexican workers have halted production at the world's top silver mine and two major zinc mines after the government arrested union officials, the pits' owner said on Friday...The Fresnillo mine produced some 33 million ounces of silver and close to 26,000 ounces of gold in 2007." And the usual N.Y. commentator stated that..."The Gartman Letter abruptly cut its entire gold short, blaming the softening dollar." (Note to Dennis: Good idea! - Ed) And lastly, there's a growing controversy about gold backwardation...is it, or isn't it??? Ted Butler says absolutely not! Here's a GATA release that covers both sides of the argument. The link is here.

In other news...and there's lots! FT (London)..."The biggest U.S. financial institutions reported a sharp increase to $610bn in so-called hard-to-value assets (try ‘impossible-to-value’ - Ed) during the third quarter, raising concerns about the hidden dangers on balance sheets. So-called ‘level three’ assets (‘mark to myth’ - Ed) rose 15.5% from the second quarter." Bloomberg (N.Y.)..."GMAC LLC, the auto and home lender seeking federal aid, hasn't obtained enough capital to become a bank holding company and may abandon the effort, casting new doubt on the firm's ability to survive." (Yes it will...Hank will take care of that. - Ed) Bloomberg (Beijing)..."China’s exports fell for the first time in seven years...down 2.2% in November from a year earlier...Imports plunged 17.9%." Bloomberg (N.Y.)..."The cost to hedge against losses on U.S. Treasuries surpassed the price of default protection on bonds from Campbell Soup Co." Bloomberg (London)...The headline read...'McBritain' Almost Twice as Risky as McDonald's: Investing in U.K. government debt is almost twice as risky as buying bonds sold by McDonald’s Corp., based on prices in the credit-default swap market....“Talk about ‘McBritain’ is an insult to Ronald McDonald's outfit.” said Sean Corrigan, chief investment strategist at Diaspon." And finally, in The Wall Street Journal (amongst other places) comes this shocker..."The Federal Reserve is considering issuing its own debt for the first time, a move that would give the central bank additional flexibility as it tries to stabilize rocky financial markets." You can't make this stuff up!

Today's first story is from mineweb.com. Dorothy Kosich reports on a ScotiaMocatta analysis of the gold and silver markets that acknowledges the gold carry trade and says it is coming to an end. That's almost as good as acknowledging that central banks have been suppressing the gold price. Kosich's report is headlined "Trend of Gold as Store of Wealth 'May Start to Snowball' -- ScotiaMocatta" and the link is here.

No matter how hard I try, I just can't get away from this guy. Here's another excellent piece by Ambrose Evans-Pritchard from The Telegraph in London. The article...entitled "Greek fighting: the eurozone's weakest link starts to crack"...is linked here.

And lastly, a brilliantly written article by Jeffrey A. Tucker at the Ludwig von Mises Institute. In it, Tucker compares the current plight of the "Big 3" U.S. auto makers, to the halcyon days when pianos were the big-ticket item of past generations. The essay...entitled "The End of the U.S. Piano Industry"...is well worth the read, and the link is here.

These errors make us look either incompetent at credit analysis, or like we sold our soul to the devil for revenue...or a little bit of both. - A Moody's managing director responding anonymously to an internal management survey, September 2007

Trying to figure out what's going on out there is like walking in a fog: You go as far as you can see...and when you get there, you'll be able to see further. On days like yesterday, with the news headlines and financial and monetary circumstances being what they are, it's no stretch of my imagination to come up with an "end of the world as we know it" scenario. So keep buying and taking delivery of physical gold and silver while its still available...and still cheap like dirt.

See 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.