From Ed Steer:

The gold price was a flat line right from the beginning of Wednesday morning trading in the Far East...until shortly before 3:00 p.m. in Hong Kong. Then, as it did on Tuesday at the same time, the price began to rise. By the time the London silver fix rolled around [noon in London...7:00 a.m. in New York] about six hours later, gold was up $5...and promptly added another $5 after the silver fix. From that point, the price just sat there until the Comex opened an hour and change later...and $7 got added to the price in short order...all the way up to $941. But it was obvious that the 'usual suspects' were lying in wait...as every time gold poked its head above $940, it got smacked. Here's the Kitco 3-day/24-hour chart for the big picture view.

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Trading during the New York session just reeked of massive intervention...which it was. Here's the N.Y. session on its own. I count nine interventions altogether...seven major and 2 minor. I knew before lunch that gold didn't have a snowball's chance in hell of closing over $940...and it didn't.

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The usual N.Y. commentator mentioned that..."Volume was heavy: 93,314 contracts estimated at 11:00 a.m. Any move higher is going to need significant buying...While The Gartman Letter's near-term forecast for bullion has been proven incorrect, TGL is quite right in forecasting heavy resistance overhead." ['Heavy resistance overhead' was obviously courtesy of the bullion banks. - Ed]

Silver's low price was the opening price at the beginning of trading on Wednesday morning when only the New York bullion banks are allowed to play in the silver sandbox. But, like gold, silver's upward path began at the same time...cutting through $13 in a heartbeat...and adding even more at the London silver fix. By the time the Comex opened in New York, silver had tacked on the better part of 40 cents. Within minutes of the New York open...silver had added a dime to reach its high of the day. But at precisely 8:30 a.m....the usual not-for-profit seller emerged and that was that. JPMorgan et al aren't even trying to hide their tracks in silver...or gold, for that matter. The red line is yesterday's 'action'.

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Tuesday's "watching grass grow...or paint dry" day produced the following changes in open interest. Gold o.i. was up again...this time by 1,288 contracts to 370,509 on pretty big volume...102,792 contracts. So it obviously wasn't as quiet a day as the price charts showed. In silver, o.i. fell again...but only by 272 contracts to 99,662...on relatively smallish volume of 17,509 contracts. If 'da boyz' report Tuesday's activity like they should, it will be in tomorrow's Commitment of Traders report.

The Comex Delivery Report showed that 10 gold and 78 silver contracts were delivered yesterday. There were no changes in the alleged holdings of either GLD or SLV either. But over at the U.S. Mint, it must be a sight to behold with all the stamping machines pounding away virtually 24/7...as they've reported production increases for the first three days of this week. Yesterday they reported another 12,000 gold and 500,000 silver eagles produced. The mint is now at 50,500 gold eagles and 1,625,000 silver eagles for July...and we're just at the half-way point of the month. This shows how big the demand is...and I hope, dear reader, that you're buying your share too! And lastly, the Comex-approved warehouse silver stocks rose 361,036 ounces on Tuesday. They always report a day late. So when I update their numbers on Friday, it will be Wednesday's warehouse activity.

The usual N.Y. gold commentator reported the following yesterday..."The Bombay Bullion Dealers Association has reported that India imported 11.6 tonnes of gold in June, down 52% from a year earlier and down from 18 tonnes in May...The Monsoon is looking poor and the bullion trade is probably correct in saying [that] the recent duty increase will stimulate amateur smuggling by private individuals. All of this would be swamped by weak world gold or a strong rupee...Various technical commentators, who have not been doing so well lately, are now emphasizing what MKS calls 'technical blockage' in the $940s. With somewhat more than a month to go before Seasonals turn positive, the behavior of the rupee continues critical to world gold. Should it continue firm, the Bears will have a serious problem."

The following is from a regular reader and info provider, P.S. He stole it from Bill Fleckenstein, who in turn lifted it from Jim Grant's latest book Money of the Mind...and is a quote made by the late French President Charles de Gaulle on February 4, 1965. As Fleckenstein says...[it's] a very succinct explanation of why gold will always be money...Quote: "It is difficult to envision in this regard any other criterion, any other standard than gold. Yes, gold, which does not change in nature, which can be made into either bars, ingots, or coins. Gold has no nationality, which is considered, in all places and all times, the immutable and fiduciary value par excellence. Furthermore, despite all that it was possible to imagine, say, write, or do in the midst of major events, it is a fact that even today no currency has any value except by direct or indirect relation to gold [emphasis by Fleckenstein], real or supposed. Doubtless, no one would think of dictating to any country how to manage its domestic affairs. But the supreme law, the golden rule...is the duty to balance from one monetary area to another, by effective inflows and outflows of gold, the balance of payments resulting from their exchanges." [Amen to that! - Ed]

Today's first story came to my attention via a GATA release entitled "Goldman can't shake the mark of the beast". The article that it's based on is from the The Telegraph in London and bears the headline "Goldman Sachs caves in to critical blogger". I still prefer the term "giant vampire squid with its tentacles wrapped around the face of humanity" when describing GS. The link is here.

The next story is a Bloomberg piece filed from Beijing. It appears that Mark Mobius, from Templeton Asset Management Ltd., is already talking about the next financial crisis...which will center around the derivatives market. The headline reads "Mobius Says Derivatives, Stimulus to Spark New Crisis". I thank Craig McCarty for the story...and the link is here.

The next piece appeared in the January 5, 2007 issue of the Financial Times in London. I'm resurrecting this article because at this point in the world's financial and monetary history, it's worth another look...a serious look. The writer is Benn Steil...director of international economics at the Council on Foreign Relations. Every time the CFR name comes up, it buries the needle on my Paranoia Meter. Click here to find out why I think that way. The FT essay is entitled "Digital gold and a flawed global order"...and is a must read. The link is here.

And lastly is this GATA press release entitled "John Rubino: A sudden worldwide currency revaluation is imminent". The release is actually three articles in one, so there's some substantial reading involved. I would recommend that you read both the Rubino piece and the essay by British economist, Peter Millar. Long before you've finished reading these, you will have figured out where that article by Benn Steil fits into the puzzle. The link is here.

Last, but by no means least, courage--moral courage, the courage of one's convictions, the courage to see things through. The world is in a constant conspiracy against the brave. It's the age-old struggle--the roar of the crowd on one side and the voice of your conscience on the other. - General Douglas MacArthur

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I wonder if all of the above could be the reasons that the CFTC is in such a hurry to change the position limits in gold and silver? If that's the case, where does it leave these big bullion banks...and their respective short positions? Maybe none of this is going to happen. But if I had a dollar to bet...this is the scenario [or a reasonable facsimile thereof] that I'm expecting sooner or later. The Chinese with their [now] $2 Trillion dollars in foreign reserves have been making a lot of ugly noises lately...and the boys over at the Kremlin are never ones to shy away from a photo op with gold in their hands...if you remember the photos from yesterday...plus the one posted above from several years ago. As countless commentators have mentioned over the years, the fiat currency system that was foisted on us starting on August 15, 1971 is now a dead duck. Charles de Gaulle was right. It's just too bad he didn't live long enough to see how right he was.

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.