What Was That?

Well, the little sell-off in gold going into the London open that I mentioned in my closing comments in yesterday's column didn't amount to much... as that was the 'bottom' for the moment. From that point, gold rose slowly until precisely 9:00 a.m. in New York, when the bullion banks pulled their bids... and down went the price.

But a surprise buyer showed up at the London p.m. gold fix... and gold was off and running to the upside, reaching its high of the day [$1,233.50 spot] at 12:15 p.m. Eastern. From that high, gold sold off a hair going into the close of electronic trading at 5:15 p.m. in New York. Gold's low of the day was also in New York at the London p.m. fix at $1,216.80 spot. Volume was pretty chunky.

Silver didn't do much, but the price began to decline in the early hours of Wednesday morning, before reaching a temporary bottom at the London silver fix at noon local time. Then it rose a nickel until the rug got pulled out from underneath it [just like gold] at 9:15 a.m. Eastern time. Silver 'lost' thirty cents in minutes before recovering after the London p.m. gold fix. The rally ended shortly after 12:00 noon in New York... and traded sideways from there. Silver's low [$18.16 spot] and its high [$18.51 spot] were both set during New York trading. Volume was heavy for a summer day.

Here's the New York Silver Spot chart. The bid-pulling by the collusive bullion banks is even more blatantly obvious in this graph the one above.

Ted Butler was incensed at yesterday's silver price action. When the bullion banks pulled their bids, they took out the 50-day moving average to the downside long enough to flush out all the tech funds that had gone long on Monday and Tuesday. Sure, that improves the Commitment of Traders structure... but its also illegal as hell. Count on the CFTC [and your silver companies] to do absolutely nothing on your behalf, dear shareholder.

Since this happened on Wednesday, none of it will show up until the COT report on August 27th. As I said yesterday, when 'da boyz' have something up their sleeves, they often pull the trigger the day after the cut-off for Friday's COT... although I don't think everything worked out as they had planned.

The U.S. dollar had a 55 basis point price range yesterday... and by the end of it all was basically unchanged. But regardless of the dollar shenanigans, it had zero to do with the precious metals price action yesterday.

Since the bullion banks pulled their bids at 9:15 a.m. yesterday morning, it should have been no surprise to anyone that the precious metal shares started out in negative territory... but rose quickly until the gold [and silver] price topped out at lunchtime in New York. Then, like the precious metals themselves, the stocks traded sideways for the rest of the day... finishing up 1.71%.

The CME's Daily Delivery report showed that 36 gold and 3 silver contracts were posted for delivery on Friday. The GLD ETF took in another 29,325 ounces of gold yesterday... and there were no reported changes in SLV once again. The U.S. Mint had no report either... but over at the Comex-approved depositories, they took in a very large chunk of silver. This time it was 1,049,085 ounces. There was a lot of activity... and the link to all of it is here.

I have a fair number of stories today... and the first one is about Greece. It appears that their austerity program is not going over too well with their citizens... and things are starting to turn ugly. The story is courtesy of reader U.D... and is posted over at the German website spiegel.de. The headline reads "Entering a Death Spiral?: Tensions Rise in Greece as Austerity Measures Backfire". I urge you to read this... and the link is here.

On Monday, Richard Russell had this to say about the Dow... "The Dow appears to be in a huge head-and-shoulders top. Note that this top has formed almost three years after the Dow hit its high back in October 2007. The fact that we now have declining tops, meaning a lower distribution pattern [below the primary top of October 2007] is bearish. In the most recent pattern, the Dow seems to be working on an expanded "right shoulder" of its H&S top. The breakdown of the whole formation would come with a Dow close of 9600 or lower. The RSI has turned down decisively... and the on-balance-volume is in an ominous downtrend."

"As I see it, the top we are witnessing began forming in October 2007... and is still in the process of formation. This makes it the greatest top, in duration, in history. Fantastic."

Richard provided the standard 3-year chart from stockcharts.com... but Nick Laird over at sharelynx.com begged me not to use it as he was working on something more impressive... so I had to wait a whole extra day before I could post Richard's comments. Here's the linear graph... and it's a beauty. It's worth a minute of your time to study it.

The next item is a brief 4-minute CNBC interview with Dr. Marc Faber. He talks about gold, of course... but the headline to the video clip reads "Faber: Don't Touch U.S. Government Bonds". I thank reader Peter Handley for sharing this story with us, which is posted over the Pragmatic Capitalism website... and the link is here.

The next story is gold-related GATA release headlined "Alasdair Macleod: Central banks in deep trouble for their gold manipulation". Macleod writes: "Here is a major banking crisis in the making, mainly as a result of the central banks' continual attempts to rig the market finally coming to a head. It is a time when the whole idea of a world monopolized by fiat currencies is losing credibility.". This is certainly worth the read... and the link to the GATA release is here.

I have a couple of stories about the possible attack on Iran. Both are courtesy of reader Roy Stephens. The first is a UPI offering headlined "Commentary: Guns of August". It's a bit of a read, but it's an important read... and the link is here.

The second story is an editorial from the Saudi daily Al-Madina that was published in the wake of announcements in Iran and Russia regarding the imminent activation of the nuclear reactor in Bushehr. The editorial took a hard line vis-à-vis the Iranian nuclear program, claiming that the military option may be the best way to deal with it. The headline reads "Saudi Daily: Military Option May be Best Solution to Iranian Nuclear Crisis"... and the link is here.

My good friend Ian Gordon over at longwavegroup.com concludes that surreptitious U.S. government intervention and manipulation have become pervasive in the stock market, economic data, and the price of gold... and are making things so much worse than would have been the case if the markets had been allowed to purge their excesses naturally. Gordon writes: "Nothing is real and honest in the U.S. economy and financial system; it is a chimera, built upon lies and manipulation conjured by the ruling elite." He credits GATA's work exposing the manipulation of the gold market. Gordon's commentary is headlined "Lies, Manipulation, and Deception -- All for Naught". I thank Chris Powell for writing the preamble to this piece... and the link to the 3-page pdf file, which is well worth the read, is here.

Today's last offering is a very longish interview with Doug Casey. As the world sinks deeper into what he calls the Greater Depression, Casey Research Chairman Doug Casey sees default on the U.S. national debt as inevitable—albeit probably in the guise of currency destruction. He anticipates further contraction in real estate, particularly on the commercial front. As long as stocks remain overpriced, he'll shy away from equities—except perhaps in favored sectors, such as gold. The interview is posted over at theaureport.com... and bears the headline "Doug Casey: Exception Among Equities"... and the link is here. I thank reader Brad Robertson for sending it along.

Wednesday was a bit of a strange one...and in the grand scheme of things it's hard to know if it meant anything at all. Only time will tell.

Gold and silver aren't doing much price-wise at the moment... and volume in early Thursday trading in the Far East and in London is exceptionally light in both metals. But, like Wednesday, trading volume was also very light at this time of day... and look what happened after New York opened. It took years for Ted Butler to finally get me to realize that the price action everywhere else in the world is irrelevant. Only what happens during New York trading make any difference... and yesterday was a perfect example of that.

One has to wonder what kind of show that bullion banks will have for us today. We'll find out soon enough.

See you Friday.