Yesterday my commentary focused on the 2% Rule and how obvious it was that The Gold Cartel was throwing around its muscle above $1120 in the gold pits. The gold open interest rose 16,796 contracts to 506,575 … which tells us just how much The Gold Cartel wanted to cap the gold price. Who else would want to sell so much gold on the first trading day of the year? The good news for us is there was somebody out there who was waiting in the wings to buy a hoard of bullion too.

Even though gold rallied $22.50 yesterday, it was very frustrating to watch the cabal forces do their thing in such blatant fashion. Today was just as bad. Once again gold rallied to the $1125 area, only to be taken right down as the day wore on. The bad guys don’t want gold to close above $1120, which I mentioned was the near term key to giving gold impetus to go much higher.

To get right to point, this gets me more than super aggravated. The heinous Gold Cartel

*Stopped gold cold above $1125 with a PLAN A attack in London around 3 AM NY Time.

*Then went to their PLAN B attack following the PM Fix, which came in at $1123.25. The AM Fix was even better at $1125.25.

*Couldn’t get enough of their own action … going into PLAN C attack mode, quickly taking gold $3 lower in the Access Market following the Comex close (gold has now recovered its early Access Market losses).

That is as bad as it gets.

Were they especially agitated because silver looked like it wanted to fly to the moon until late in the day when the pressure on gold was too much for it to hold 40 cent gains? Silver stood out all session long, looking at one point like it might clear key technical resistance at the $18 level. One substantial plus is that it blew through, and closed above, important resistance at $17.50, and did so in convincing fashion…

March silver
http://futures.tradingcharts.com/chart/SV/30

The silver open interest went up 1463 contracts to 125,620.

Somebody at Gold Cartel headquarters must have called JP Morgan Chase and balled them out regarding silver’s super performance today. It has dropped 16 cents since the Comex close. What a joke! (Silver is now down only 10 cents.)

/////////////////// And

According the Mitsui-HK

" Sizeable offers near 1124/1125 in both Globex and EBS were able to stop gold from rising."

early in the Asian day. Although world gold did manage to break through this opposition for a time in the early European day, this seller is clearly still there. Estimated volume at 11AM was 116,441 lots, about half of which was done overnight.

In view of Monday’s open interest behavior discussed above, it looks very much as if what Casey Research’s Ed Steer likes to call a "Not for Profit seller" has taken up residence around $1,125. This will make the Indian bullion importers very happy. So far though, it does appear that the decline engineered in December is complete.