From tonight's midas:

As noted ad nauseam, The Gold Cartel tends to whack the gold price around US Treasury auction time. Right on cue they have done it again…

13:03 3-yr auction yields 1.49% with 79.2% allotted at the high
•Bid/cover 2.98 vs ave of the past 10 auctions 2.78
•Indirect participation 38% vs ave of the past 10 auctions 50.9%
•In reaction:
2-yr 2/32 to 0.81%
10-yr 25/32 to 3.71%
Dow 10583.43 (80.56)
* * * *

Talk about a tedious drill! Then there is the action in the 10 yr note, whose yield plummeted this morning, out of nowhere, and prior to the auction. It fell all the way down to 3.72%, reversing its recent trend in just one day. Every time the yield threatens to take off, the US Government comes back in and takes the yield back down … as if their money printing and fiscal deficits don’t matter at all … a Larry Summers and his Behavioral Finance program encore. One day that dog won’t hunt anymore… (See Chart)

Clearly The Gold Cartel has thrown another temper tantrum, having been surprised by the recent price action in both precious metals. Both gold and silver were blown out of the water late in the day with gold taking out a key technical area at $1140 as if it weren’t even there.

Meanwhile, the dollar was DOWN .09 at the Comex close. So much for the dollar being the key to the gold price. It’s just not the case. It’s mainly about the physical market versus the heinous Gold Cartel, who won a battle today.

The bums took aim at new spec longs. Yesterday the gold open interest soared 14,477 contracts to make a new high, above where it was with gold above $1200 an ounce.

The silver open interest also soared, gaining 4567 contracts to 131,939. Silver was very weak after the Comex close yesterday and never recovered. JP Morgan was licking its chops like a lion salivating over a baby deer.

It is important to note that it was not a weak physical market which hurt gold today. We know that because of the strong PM Fix. It was the cabal’s use of derivatives which buried the price. This is real time input which confirms the importance of what GATA’s Reg Howe pointed out: the amount of derivatives on the books of the BIS exploded in the first half of the year, even as gold producers were reducing their hedges.

The gold/silver paper markets are gradually divorcing themselves from each other. At some point this will end VERY badly for The Gold Cartel. Both the gold and silver markets are going to blow up.