From Ed Steer:

Both gold and silver got sold off gently in Far East trading on Wednesday. This slight downward trend lasted until shortly after 12:00 noon in London...and shortly before the Comex opened in New York. From there, rallies in both metals got hit hard the moment that the gold price broke through $960 and silver broke through $15 respectively. Strangely enough, this occurred about 12:05 Eastern time in both metals. From there, the selling pressure was on...and as of this writing, gold has given back $15...and silver about 35 cents. Silver's chart is particularly interesting, as it was obvious that sellers had virtually vanished and the price was going parabolic before JPMorgan showed up.

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The usual New York commentator had the following regarding yesterday's trading..."Obviously the $960 level is being aggressively defended. Unfortunately for the defense, the problems in the bond market make the defense look forlorn...even desperate. N.Y. gold Bulls, exposed as many are in the highly leveraged futures market, are always susceptible to rout. This particular group, however, are impressive."

Tuesday's big down...and then up...day, resulted in an increase in gold open interest of only 202 contracts to a total o.i. of 396,965. This is a very tiny change considering Tuesday's total volume of a stunning 265,250 contracts. Most of this was spreads and switches associated with options expiry. In silver, open interest increased a largish 1,351 contracts...bringing total open interest to 98,120 contracts. Volume was a 22,080 contracts...once again options expiry related.

Of course none of Wednesday's action will be in the COT tomorrow, as the cut-off was Tuesday at the close of trading. I'm just hoping that all the activity I mentioned in the previous paragraph is in the COT like it should be.

There wasn't much in the way of other precious metals news yesterday. The U.S. Mint did update their website for gold and silver eagle mintings. In gold they only made another 2,000 compared to the prior week...which is nothing at all. In silver, 301,500 silver eagles were minted...which is about half of what they normally produce in a week. Is the market saturated? I mentioned here about ten days ago that there was lots of silver around and that premiums were falling rapidly. That's still the case today...at least that’s what my coin guy is telling me. The Comex delivery report showed that 13 gold and 11 silver contracts delivered yesterday. And I also note that Comex-approved warehouse stocks were down 450,766 ounces. There were no changes in either GLD or SLV yesterday either. Today is last day for delivery into the May contract...and tomorrow is first day notice into the June contract. It will be interesting to see how many stand for delivery. Tomorrow is also the day for the latest COT...which both Ted Butler and myself await with great anticipation. We already know that the data won't be good news.

As a matter of interest, and before I get into my stories for today, I received this extremely interesting monthly chart of the US dollar. It's a 'big picture' graph in every respect, as it spans a 13-year time frame. Superimposed over it, is a trace called an SAR pattern...short for Stop and Reverse. The chart speaks volumes...and you can find out more about SAR Reversals in this pdf file by clicking here. I thank the "Charleston Voice" for sending it to me. He included the following commentary, which I am reproducing here..."In this monthly chart you can see the new dot that now appears 'north' of the price bars signifying a definitive reversal in the dollar's direction...DOWN. None of these SAR reversals are fleeting...and can run for a very long time, albeit perhaps in a jerky fashion." The graph is certainly worth spending some time on.

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The first story today is from The Telegraph in London...and no, it's not Ambrose Evans-Pritchard...it's Louise Armistead. The headline reads "British banks revolt against Obama tax plan"..."British banks and stockbrokers may refuse to take on American clients if new international tax proposals outlined by President Obama are passed." It appears that the Americans want the British to become tax collectors for Uncle Sam. I thank P.S. for sending me the story. The link is here.

The next story is from barrons.com. It's a very timely real estate story about the upcoming second leg down in the residential real estate market. I've talked about this since early 2007...and now it's here. The problem this time is called an 'option ARM'. This new raft of foreclosures will take the next three years to complete. Then...and only then...will there be any clue that we're near the bottom of the real estate cycle. The headline reads "The Housing Hurricane Will Howl Again". I thank Craig McCarty for sending it along, and the link is here.

In another U.S. dollar-related story, GATA consultant James Turk, founder of goldmoney.com, writes that Treasury note yields have made "a huge round trip" and now are rising as the U.S. government devalues the dollar by turning debt into currency. "The more Treasury paper the Fed buys, the lower the dollar will fall in the foreign exchange markets and, more to the point, the higher gold will rise." Turk's new commentary is headlined "Updating the Charts" and the link is here.

Two more stories courtesy of Craig McCarty. The first is from Bloomberg and bears the unhappy title of "Mafia Cash Increases Grip on Sinking Italy Defying Berlusconi"..."Unlike overleveraged companies burned in the credit crisis, the Mafia and its cash-based, debt-free business model are breezing through economic hard times. With young, savvy leaders at the helm, organized crime is poised to expand as legitimate companies founder." Not even their billionaire Prime Minister has been able to control the mob and its riches. The link is here.

And lastly is this piece from The Independent in the U.K. The problems described in this story are certain to become more widespread...and not just confined to Russia. It appears that "Impoverished workers resort to eating salads of weeds and nettle soup...as the Kremlin's worst fears are being played out." The headline reads "Cold, hunger and job losses ignite dissent in Russian town". The story is a must read...and the link is here.

The first panacea for a mismanaged nation is inflation of the currency; the second is war. Both bring a temporary prosperity; both bring a permanent ruin. But both are the refuge of political and economic opportunists. - Ernest Hemmingway...Notes on the Next War: A Serious Topical Letter...1935

In the King Report last night, Bill King was incensed about the fact that the S&P 500 Future Contract was saved three times [at the 875 level] in the last four trading sessions. "This strongly suggests something other than real or organic buyers were at work." [Note to Bill: You would be right about that...as there are no markets any more, only interventions. - Ed]. And not only did the Dow fall out of bed late yesterday, but the 10-year Treasury Note yield blew out big time. The Treasury has boatloads of paper it has to sell, and although the 5-year went reasonably well, it's obvious that behind the scenes, there's big big trouble in River City. But [surprise, surprise!] through all that, the US$ somehow was manouvered higher.

I note, as I hit the send button, that gold and silver are showing signs of life in early London trading. It could be a wild day in the Comex gold and silver pits in New York this morning...so hold onto your hats.

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.