From Ed Steer:

Neither gold nor silver did much of anything in Far East or European trading on Wednesday. A short, sharp rally into the London a.m. fix went nowhere, and there wasn't any serious activity after that until the floor traders on the Comex went to work yesterday. Gold tacked on $10 in about two hours time, but once the London p.m. fix was in at 10:00 a.m. New York time, that was it for both metals. Volume was very light...only around 69,000 contracts...net of switches.

Tuesday's open interest numbers were underwhelming, as volume was very light on Tuesday as well. Gold open interest dropped a mere 1,227 contracts...and silver o.i. was down a minuscule 48 contracts.

What I mentioned might happen yesterday never materialized. All in all, Wednesday was a big zero in the gold and silver market. It was nice to see the precious metals stocks eke out a gain despite how the general equity markets fared.

There wasn't much gold or silver news out there yesterday either. In a Reuters story filed from Singapore, I see that an analyst with Goldman Sachs has developed a keen grasp of the obvious when he mentioned he expects the "price of gold to reach $1,000 an ounce in the next three months from its previous forecast of $700...due to rising investor demand for safe haven assets. 'The gold price rally has been driven by surging demand for gold in all forms: physical gold, exchange-traded funds, and futures contracts as investors seek “a safe store of value” amid the financial distress and inflation risks,' it said in a report. It also noted that a strong relationship between the price of gold in U.S. dollars and the exchange rate of the dollar against other currencies has begun to break down." And I note that the Comex warehouse silver stocks took a bit of a jump yesterday...up about 2.3 million ounces.

In other news yesterday, I see in a Bloomberg story that Mexico's central bank is buying pesos in the foreign-exchange market after the peso hit a record low yesterday. And in Russia, I see from an item in the King Report that "Russia signalled a change in its policies to fight the financial crisis on Wednesday, indicating that it would switch from bailing out individual companies to supporting the economy through the banking sector. Moscow also plans huge budget cuts in an attempt to limit its fiscal deficit – rejecting pressure to follow the US and other western countries to try to stimulate the economy with a big boost in public borrowing." And lastly, also from the King Report..."Yields on long-term U.S. Treasury debt continued to surge higher yesterday as the market braced for a future upturn in inflation and a tidal wave of long-dated issues that will be needed to fund the bank rescues and the emerging stimulus package. Back-end yields would probably have risen even further were it not for persistent hints the Federal Reserve is thinking about buying longer-dated issues to cap them...but the market has started to call the Fed's bluff."

Today's first story is from the Financial Times in London and deals directly with what was mentioned in the previous paragraph. The headline reads "Treasury in Plans for Record Debt Sale". The GATA release on this story is linked here.

The next story is also from The Times in London, where British Prime Minister Gordon Brown appeared to acknowledge for the first time yesterday that the world economy was heading for a 1930s-style “depression”...the first world leader to use the "d" word. The link is here.

Today's third story is also from the Financial Times and is a gold-related article by John Dizard. The headline reads "I Don't Like the Big Shiny Crowd Around Gold"...so you can tell where this commentator's head is at even before you read it. It's wrapped in another GATA release...and the link is here.

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The interventionist policy (big government) provides thousands and thousands of people with safe, placid, and not too strenuous jobs at the expense of the rest of society. - Ludwig von Mises

The last ten days or so have just been a rest stop on the road to perdition. The Dow closed below 8,000 again. If the President's Working Group decides not to show up one of these days, there's no telling how far it would fall if left to its own devices. The US$ rally looks like it’s on its last legs, and the gold/silver price just can't [or won't] be driven down...so one would think that under these circumstances...they will rise. And they would rise [regardless of dollar strength] if the Fed would just stand aside. Richard Russell's "Inflate, or die!" is now upon us.

Enjoy the rest of your Thursday...and all of us at Casey's Daily Resource Plus look forward to seeing you right here on Friday morning.

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