From Ed Steer:

Globex gold trading started off with a hit to the downside, as the price got chopped for five bucks right out of the chute before Sydney or Hong Kong even opened their doors on Monday morning. The N.Y. bullion banks wanted to set the mood for the day/week, and they did just that. By 10:00 in London, gold had managed to gain a bit of its loss back, but at that point a more serious selloff began from there, culminating in the usual waterfall decline early in Comex trading. Gold was fighting a losing battle all day long. According to the usual N.Y. commentator..."Total estimated volume was 106,079, with a switch effect of 17,510."

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In silver, I think what happened at the opening of Globex trading in New York on Sunday evening was the most egregious take-down in silver I've ever seen at that hour of the day. This was all New York action setting the tone once again...especially against all the bullish news for both metals [especially silver] that came out on Friday after the close of trading. More on that further down.

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Gold's big Friday spike to the upside resulted in an open interest increase of 4,235 contracts...and in silver's 2% move on Friday, o.i. rose a smallish 419 contracts. Obviously there wasn't a lot of volume in either metal...which is the only positive thing about these numbers. In Comex deliveries yesterday, 88 contracts were delivered in gold. So far in March, 2,415 gold contracts have been delivered...and considering the fact that March is a non-delivery month for gold...8 tonnes of gold ain't chopped liver. In silver, only 80 contracts were delivered...all were issued by Bank of Nova Scotia...and the two big stoppers were JPMorgan [62 contracts] and Goldman Sachs [13 contracts]. There are still 813 silver contracts open for March delivery on the Comex...about 4.1 million ounces...and more could be added before month’s end as well. Nobody seems too anxious to deliver any lately. I wonder why? Ted Butler's latest commentary on this issue [and others] is posted below. A net 208,144 ounces of silver were added to Comex-approved warehouse stocks. The U.S. Mint didn't update its production for last week...maybe today. Over in Switzerland...in the gold and silver ETFs at the Zürcher Kantonalbank [ZKB]... their weekly updated numbers showed their gold stash up 86,870 ounces...and their silver pile rose 285,916 ounces. I thank Carl Loeb for that data. And lastly...I see that GLD added another 12.29 tonnes [395,000 troy ounces] to their alleged stockpiles...a new record high of 1,069.05 tonnes. Ted Butler feels that based on all this gold coming into GLD, that the SLV is owed quite a bit of silver. If that's the case, then inquiring minds should be asking where it is.

In other gold and silver news, I mentioned in a prior paragraph that there were a couple of big stories over the weekend. It appears that the world's two biggest precious metal smelters have some problems. In a story at mineweb.com is this headline..."Doe Run Peru La Oroya complex may get Peruvian government bail-out"..."Doe Run Peru is negotiating with banks and mining concentrate suppliers after its $75 million line of credit was cut off by banks...the company has shut its zinc and lead processing smelters for lack of concentrates. The company says it isn't able to buy concentrates as it owes suppliers. It was also late paying wages." [The bottom line is that they're temporarily out of business. - Ed] And in another mineweb.com story is this headline..."Fresnillo says no major economic impact after strike". In a nutshell..."Fresnillo, Penoles said on Friday it had declared force majeure at its MetMex refinery after a five-week strike over pay, paralysed work...Some 330 striking workers in the gold and silver refinery section laid down tools on Feb. 8th, demanding a salary increase of up to 9%. MetMex refines more than 90% of all the gold and silver mined in Mexico." The Doe Run Peru story is linked here...and the Penoles/MetMex story is linked here. Neither story is very long...and both are worth looking at.

Three other gold-related items to report as well. I note in a story posted at Kitco that Mali's gold production continues to decline. The headline reads..."Mali sees 2009 gold output down 13% at 46 tonnes."..."Gold output in 2008 was 52.87 tonnes, down from 56.75 tonnes in 2007, as mines approached the end of their productive lives, according to ministry data seen by Reuters." I see on Maryland's state website that a bill has been introduced "Urging the United States Congress to restore honest money backed by silver and gold in accordance with the requirements of the United States Constitution, phase out Federal Reserve notes, and return to the free market banking practices that the Founding Fathers codified in the United States Constitution." And lastly, Bad Boy Barrick Gold got its knuckles whacked again. In a Bloomberg story entitled "Barrick settles securities fraud lawsuit over hedging"..."the world's biggest gold producer, agreed to settle a lawsuit alleging it misled investors by claiming that its hedging program wouldn't hurt profits as gold prices rose." Barrick abandoned its hedging program in 2003, I believe. At the peak, Barrick had sold forward about 24 million ounces...about 30% of yearly world production. Their main bullion bank? JPMorgan. The story is linked here.

As you can tell from my rant so far, there was a lot of news over the weekend. In addition to all the links above, here are five more stories that are worth your time.

The first is from The Telegraph in London. The headline reads "Bank of England warns tensions in banking system at fever pitch"..."Tensions in the financial system are approaching the fever pitch they reached before the collapse of Lehman Brothers last October, the Bank of England warned." Buying more gold will be an even more wonderful idea by the time you're through reading this...and the link is here.

The second story is from RIA Novosti in Moscow. The headline reads "Russia proposes macroeconomic, budget standards to G20" There's no talk of gold in here...only the status quo and SDRs...Special Drawing Rights. More paper! The link is here.

In commentary posted over at goldandsilverblog.com comes this piece entitled "U.S. Mint Suspends Production of More Gold and Silver Coins" It sure seems as if the Mint doesn't want to go into the market to bid up the price of real metal in order to meet public demand. The link is here.

The last two articles are both about backwardation in the silver market. Backwardation is when material for immediate delivery is priced higher than material for later delivery, often because buyers doubt that the material can be delivered later. The first is from James Turk over at goldmoney.com and is entitled "Extraordinary Stress in the Silver Market". The link is here.

And lastly, is silver analyst Ted Butler's weekly commentary on the same issue. As always, Ted's essays are worth reading. The title is "Crunch Time?" and the link is here.

Those who have talked with me personally about this, will confirm that I always say that when the real [silver price] move comes, they will not have to ask me if this is the real move. They will know it simply by observing the price action. It will be unmistakable. - Ted Butler, 16 March 2009

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Despite all the happy talk out of everyone...including Obama...not a thing has improved in the international economic, financial and monetary situation in the last seven days. Today's story from The Telegraph, posted above, should tell you all you need to know in that regard. They just aren't going to be able to print money fast enough to do the job. The G20 meeting in April will accomplish little, if anything. Events and circumstance are simply overrunning them...and they get further and further 'behind the curve' with each passing day.

See you on Wednesday.

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