Today was nearly a reverse mirror image of yesterday as far as gold is concerned, at least early on it was. Gold came in around the unchanged mark, plus and minus. However, it exploded to the upside in the first hour of trading, rising more than $20 in fast market trading conditions. While yesterday’s weak dollar played no factor in the gold trading, its further weakening following more lousy U.S. economic news gave the bulls some cheer and they went on the offensive.

Veteran gold market observers, like me, were surprised by the vigor of the move … so much and so fast. However, it is even more confirmation that there is a HUGE new buyer out there (perhaps a couple of them) who is going after gold in a way that I have not seen the last decade. This buyer is extremely aggressive and makes his move when least expected, almost like he is trying to catch The Gold Cartel napping … and is also trying to make a statement.

A caught off guard, and perhaps just as surprised, Gold Cartel sent in marching orders to settle gold down, which took the price $20 off its highs.

This is most interesting. The gold open interest shot up 7,893 contracts to 328,284. If yesterday’s sell off was due to speculators liquidating due to the index rebalancing reduction, the gold open interest should have gone WAY down, not UP, maybe to the tune of 10,000+ contracts. The rebalancing bit has turned out to be yet another hogwash reason why gold was bombed. As usual, the real culprit was THE GOLD CARTEL tanking the price on a day when the dollar was very weak. Who else would have gone after gold under such conditions? New shorts came INTO the market, not old longs taking an exit.

Silver remains a nowhere market as far as the specs are concerned. Its open interest DROPPED 304 contracts to 86,484. With such scant interest, the silver price managers had to expend little effort taking the price lower. Silver managed to rise to $11.32 this morning but that was it for the day on the upside.