From Ed Steer:

The high water mark for gold occurred at 12:00 noon in Hong Kong on Monday. From there, gold shed about $7 by the time London had been trading for an hour. Gold gained almost all of that back in the rest of London trading...and up until precisely 9:00 a.m. in New York. Then a seller showed up...with another sharp sell-off the moment that London closed. From there, gold did nothing...except briefly tick down to its low of the day...$938.40. For a Monday, volume was very light...and [according to the usual N.Y. commentator] "saw estimated volume of only 84,287 lots which, if it is not radically revised, suggests Monday was the quietest Comex day in quite some time." The US$ was up strongly yesterday as well, which certainly exacerbated the situation in gold.

Silver, which is the real centre of the universe for the bullion banks, was bludgeoned. What I said on Saturday, is worth repeating here..."But the bullion banks will, as they have in the past, most likely use their gargantuan gold short position to beat the living crap out of the silver price once again." It was certainly "mission accomplished" yesterday, as silver was clocked for 81 cents...by far the biggest percentage loss [-5.46%] in the precious metals complex. Monday's high price mark was around 2:00 p.m. in Hong Kong...with the low coming at the close of electronic trading in New York's afternoon at 5:15 p.m. yesterday. Silver's highest New York price occurred at 9:00 a.m. on the dot yesterday...just like gold's.

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Ted Butler and I were both disappointed with Friday's changes in open interest. Considering the beating gold and silver took, we both expected a far more impressive set of numbers...but we didn't get them. Gold o.i. only dropped 4,736 contracts to 383,603...on volume of 111,839. And silver o.i. actually rose! Only by 196 contracts [to 109,232 on volume of 34,681 contracts] but on such a big price decline, this was unexpected. Ted and I both agree that these criminals [the bullion banks...mostly JPMorgan] can hide their tracks by going long instead of covering their shorts...this would skew the open interest numbers. After the licking that both metals got yesterday, I'm expecting some big drops in open interest when the numbers become available from the Chicago Mercantile Exchange later this morning. If we don't get it, then we've probably still got a lot of down-side pain ahead of us.

At this point in time, I have to ask myself...how far along are we in this liquidation process? It's the "same old, same old" routine that's been going on for the last decade...and that Ted Butler and I have been writing about for weeks now. And so, dear reader, what's happening at the moment should be no surprise to you at all. The bullion banks are panicking the tech funds [and small traders] into puking up their longs while JPMorgan et al ring the cash register and make fat profits as they close out their short positions. It will be over when the bullion banks have covered as many of their short positions as they can. The only unknowns...how long it will take [a couple of weeks or a couple of months]...and what the gold and silver prices will be when we get there.

That's why I'm not impressed with the amount of short covering I've seen in the daily open interest numbers lately. Will 'da boyz' be done at the 50-day or 200-day moving average...or will it be worse...like last July, for instance? They have close-to-a-record short position in gold...just like last July...which is mostly still intact. But can they...or will they? As Mark Twain's famous quote goes: "History may not repeat...but it rhymes." Stay tuned. By the way, here's the 3-year gold chart with the above mentioned moving averages in place, so you can form your opinion.

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Courtesy of the usual N.Y. commentator, comes the following..."The Gartman Letter today rather grumpily denies hinting at Government intervention in gold on Friday by saying 'someone or something' was obstructing the advance on $1,000 again. In other words, Dennis...'someone or something' does not appear insistent on much lower gold. No further clarification was offered, but more importantly, TGL is considering buying gold on the view that $922-935 is a meaningful technical level in a correction." [That's not quite down to the 50-day moving average...but it's getting closer - Ed]

In other gold news, I note that neither GLD nor SLV reported any changed to their alleged bullion stashes. And over in Switzerland at Zürcher Kantonalbank, I see that their gold ETF reported no change for last week, and currently sits at 4,589,577 ounces. Their silver ETF was up a rather substantial 498,755 ounces to 48,138,943 troy ounces. I was surprised to find that the U.S. Mint has once again updated their eagle coin mintings. In one ounce gold eagles, they reported cranking out another 24,500 to bring their June total to 67,500. In silver eagles, they stamped out another 415,000 since their last report on June 10th...and are now up to 1,345,000 for June so far. The Comex Delivery report yesterday showed that a magnificent 53 gold contracts were delivered...and nothing in silver. And at the Comex-approved warehouses, a rather substantial 1,741,669 ounces were removed from inventory. That's quite a bit.

I note in a Reuters story posted at lemetropolecafe.com that "Capital One Financial Corp's U.S. credit card defaults rose in May as unemployment increased and Americans struggled to pay their debts, the company said on Monday. In a regulatory filing, Capital One said the annualized net charge-off rate for U.S. credit cards -- debts the company believes it will never collect -- rose to 9.41% in May from 8.56% in April. Still, Capital One is performing better than bigger rivals American Express Co , Citigroup Inc and Bank of America Corp , whose default rates already exceed 10 percent..." [This is incredible...and it's only going to get worse! - Ed]

The first of four stories today is from Bloomberg. It came out on Saturday...long after I'd filed my rant for that day. The headline says it all...and reads "Bank Rescue Costs EU states $5.3 Trillion, More than German GDP". I thank Craig McCarty for the story and the link is here.

My next story came from a kind reader just a few hours before I put today's commentary to bed. He sent it to me because he "thought I might find it interesting...as I would never find this on CNBS. Not just because of converging points of view, but also, the source." He's right on all counts, and I urge you to give this story the attention that any serious piece of journalism deserves. It's posted at aljzeera.net and is headlined "Why America is a bank-owned state". I thank John Parsonage for bringing it to my attention...and the link is here.

Here's another story that deserves your undivided attention. Having extensive past experience in the field of meteorology and climatology, I'm well versed in this whole climate change affair and consider it the biggest pile of B.S. ever perpetrated on the people of the world. Al Gore can go pound salt as far as I'm concerned...and don't get me started on that movie of his. Here's a story from The Telegraph in London that came out this past weekend. It's entitled "Crops under stress as temperatures fall". Here in Alberta, the first hay cut...and virtually the entire 2009 canola crop...is a write-off...no rain. I thank P.S. for sending the story along. The link is here.

And finally...the last story...which was also posted this past weekend over at globalresearch.ca. This is a 'must read' as well. "The city of Yekaterinburg, Russia’s largest...east of the Urals, may become known not only as the death place of the tsars but of American hegemony too – and not only where US U-2 pilot Gary Powers was shot down in 1960, but where the US-centered international financial order was brought to ground." The story is headlined "De-Dollarization: Dismantling America's Financial-Military Empire...The Yekaterinburg Turning Point"...and the link is here.

Find out what any people will quietly submit to, and you have found out the exact measure of injustice and wrong which will be imposed upon them...and these will continue, until they are resisted with either words, or blows...or both. - Frederick Douglass

I see that VIPs in Japan, Russia, Germany and IMF were all cheer-leading the U.S. dollar in the last five or six days...with Japanese Finance Minister Kaoru Yosano proclaiming "Our trust in the U.S. Treasuries is absolutely unshakeable." I didn't see China's voice in there anywhere, as I believe they have already spoken with Little Timmy Geithner on this issue. That's why we currently have the US$ heading north...while JPMorgan and the boys use this manufactured opportunity to do their dirty with the precious metals. Let's see how long it lasts.

See you on Wednesday.