From Ed Steer:

The weekend news from every corner of the globe [especially Europe and Britain] was absolutely wretched...and gold and silver did exactly what one would expect the moment that trading began in the Far East on Monday morning...they took off to the upside. However, for some strange reason, gold couldn't make it above $960...and shortly after London opened...the gold price was under pressure once again. Then, at precisely 9:00 a.m. in trading on the Comex in New York...the rug, once again, got pulled out from under the price. The gold price began to rally again the moment that London closed for the day, but got stopped dead in its tracks at half past lunchtime in New York. Gold made a new low for the move in after-hours electronic trading, and never recovered.

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The assault on silver was even more vicious. As I mentioned in the prior paragraph, silver rallied smartly right from the Sydney open yesterday morning...and the price peaked at the same time as gold...precisely 9:00 a.m. in London. From there, the selling pressure was enormous...and at precisely 9:30 a.m. in New York, JPMorgan et al pulled their bids. The silver price dropped like a stone to its low of the day...over 45 cents in less than half an hour. From there, a 20 cent rally occurred...but, like gold, at a few minutes before 1:00 p.m...selling pressure resumed almost into the close of electronic trading at 5:15 p.m.

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Once again it should be obvious to all that if the bullion banks hadn't intervened, gold would have blasted through the $1,000 barrier like it didn't exist...which is exactly the reason that they were on top of the situation almost from get-go in Sydney...and never let up from there.

I was hoping after Friday that maybe there would be some respite from the selling...as the HUI had finished up two days in a row...despite a declining gold price. Alas, it was not to be...so now I have to revisit the 50-day moving averages in both metals. As of yesterday's close, silver's 50-day m.a. was at $12.09...and gold's was 893.82. So, from where both metals sit as of this writing, silver would have to drop to the $11.90 range for a couple of days...and gold around $880. IF they can get those prices that low for a couple of days...and keep them there...then virtually all the tech funds in both gold and silver would be liquidated. Ted Butler says that the vast majority of silver tech funds have already exited the market and it may not be necessary to go that low in price. We'll see. And lastly from Ted Butler is the following mind-boggling statistic...as of Commitment of Traders report on Friday...'4 or less' U.S. bullion banks [in the Commercial category] are short more than 72% of the entire Comex silver market...a new record high. If this is not manipulation, it would be nice if the CFTC explained to us what percentage concentration would constitute manipulation. Just asking. Too bad your silver mining companies aren't.

On Friday's decline in price of both metals, gold o.i. finally fell a bit...this time by 6,929 contracts to 369,553. Silver's o.i . fell 1,144 contracts to 94,102. In Comex deliveries yesterday, despite it being a non-delivery month for gold...another 426 contracts were delivered. The big issuer [334 contracts] was Fortis...and the big stopper was JPMorgan [250 contracts]. In silver, there were exactly 700 contracts delivered, with Banc of America Securities being the big issuer [544 contracts] and Goldman Sachs and Bank of Nova Scotia the big stoppers...with 465 and 129 contracts respectively. There were no changes in GLD yesterday...and SLV dropped another 2.3 million ounces, with SLV now down to 256.7 million ounces. The changes in Comex warehouse silver stops were inconsequential. Over in Switzerland, their gold ETF added 132,968 ounces...and their silver ETF added 199,913 ounces of silver, during the last week.

In other gold news, I saw this story from chinamining.org that was posted over at Kitco. The headline read..."Australia's gold output at 2-decade low"..."Australia's gold production plummeted to a two-decade low of 219 tonnes in 2008 as mining companies dug up more lower gold-bearing ores in response to rising bullion prices, a sector survey released on Sunday showed. This is the lowest annual production since 1989. By reducing the grade of ore mined, known as low-grading, less gold is produced immediately but the life of the mine is extended and more gold is produced in total." In a story in The Telegraph out of London over the weekend, the headline read...."Postcard from the Edge: China turns to gold in hard times"..."Chinese savers alarmed at the economic crash and short of other safe investments for their money have headed to the gold markets. Beijing's gold markets are reporting record sales for the one thing that, with currencies being devalued and governments taking on ever bigger debts, seems sure to rise in value." And lastly, in a story posted at the moscowtimes.ru entitled "Gold Price Correction Will Not Last"...Russian Prime Minister Vladimir Putin was quoted as saying that he is "well aware that the price of gold is rising on world markets."

In other news...where does one start? AIG's getting another $30B. That makes $190 billion to date. Where does a company with a current market cap of $1 billion get the idea it can pay off $190 billion in debt? I see in a Bloomberg story that Freddie Mac CEO Moffett resigned after six months on the job. One can only imagine what he saw. Probably a company that might be worth ten cents on the dollar on a good day. I see in a yahoo.com story that "the personal savings rate surged to 5%...the highest level since 1995...as consumers continued to sock away more of their incomes amid the deepening recession." I noted in another Bloomberg story that Toyota Motor Corp., facing its first loss in 59 year, may get aid from the Japanes government, as the global financial crisis makes it difficult to raise money." [If Toyota needs government assistance, Japan, Inc. must truly be hurting. - Ed] And lastly, from the Chicago Tribune comes this shocking tidbit..."The median price of a home sold in Detroit in December was $7,500...according to Realcomp, a listing service." [Yep, you read that right...it's not a misprint. - Ed] The link is here.

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Because of the weekend, there are lots of stories today. The first is from The Telegraph in London. It's one of the stories that started the fire in the gold price in early Monday morning trading in the Far East. The headline reads "Bank of England poised for Rate Cut"..."The BoE is set to bring interest rates down to an effective zero-level within days and to sound the starting pistol on quantitative easing, pumping extra cash into the economy." Basically, they're going to run the printing presses and monetize the debt. The link is here.

Another story on the weekend that got gold going yesterday, was from Bloomberg and filed from Brussels. "European Union leaders spurned pleas for special aid for eastern Europe and a rescue package for automakers, bowing to German concerns over budget deficits as the economic crisis escalates." I was delighted to see that Germany prevailed on this idiotic idea. The link is here.

Another story from The Telegraph. This one by Ambrose Evans-Pritchard. It's entitled "We need shock and awe policies to halt depression" As always, everything AE-S writes is worth reading. So is this...and the link is here.

The next item is a longish piece from mpettis.com. It's an in-depth look at the Chinese commercial real estate market...and a few other things along the way. It's certainly well worth the read...entitled "Chinese real estate is in the headlines again"...and linked here.

In case you're not aware, in the last few days, there have been runs on banks in the Ukraine and elsewhere in the former Soviet bloc countries. Here's a piece out of the Financial Times that touches on that. The headline reads "Ukraine risks unrest as ills worsen" and the link is here.

And lastly, here's a nice article on gold...in The Economist of all places. The title of the piece is "Burnished by Bad News, Gold Looks Like a Good Each-Way Bet" and the link to the GATA release is here.

As long as the perils of a global reserve currency crash are deemed more dreadful than the consequences of continuing to support it, the paper Gold emporium which is the US futures market will still be able to manipulate what is known as the US Gold "price". - Bill Buckler, Gold This Week, 28 February 2009

We are well down the road to perdition. Nothing can stop it now. And as Bill Buckler said in his quote above, the powers that be in the United States will do everything they can to prevent an explosion in the price of gold and silver. But they can't keep it up forever...it's just a matter of how soon...and how high.

See you on Wednesday.