By noon in London yesterday, the gold price was up about seven dollars, but lost most of that gain by the London p.m. gold fix at 10:00 a.m. Eastern time.

From that low, gold jumped higher...and around 11:30 a.m. Eastern, the high of the day was in...then the gold price more or less traded sideways in choppy action for the rest of the Comex trading session...and electronic trading session that followed. Volume was light once again.

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The silver price more or less followed the same price pattern as gold...but the rally that began shortly after the London gold fix was of more substance. Silver's high tick of the day came in the New York Access Market shortly after 4:00 p.m. Eastern, with silver closing up 94 cents on the day. Volume, net of roll-overs, was very light once again.

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The dollar held steady up until noon in Hong Kong yesterday...and then rolled over and declined slowly for the rest of the Wednesday trading day...and was down about 38 basis points by 5:15 p.m. Eastern yesterday afternoon. It's still in decline as of this writing.

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Needless to say, the gold stocks turned in their best performance between the London p.m. fix [minutes after 10:00 a.m. Eastern] and the 11:30 a.m. high tick in the gold price. From that point the gold stocks remained high, but faded a hair into the close. The HUI finished up 2.11%...which is a pretty good gain considering the fact that gold was only up nine bucks or so on the day.

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The silver stocks started out slowly...and most were up a decent amount by the close of trading, but most finished well of their highs. I must admit that I was expecting better price action than that. Nick Laird's Silver Sentiment Index was up only 2.28%.

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The last CME Delivery Report for June showed the only issuer of the day in gold was Prudential with 36 contracts....and JPMorgan was the big receiver/stopper with 7 contracts in its client account and 24 contracts in its proprietary [house] trading account. There were no silver deliveries reported...which is no surprise, as the July delivery month is now upon us.

About two hours after I wrote that above paragraph, the CME released its Daily Delivery Report for the first day notice in the July delivery month. It was another stunner of a number in silver, as only 110 contracts were posted for delivery on Friday, July 1st. I was expecting many thousands...and it just didn't happen...and that's not the first time this year that silver has started off a delivery month with almost no activity worthy of the name. It's going to be another interesting month.

The delivery month also started of with 83 gold contracts being posted for delivery...all from the Bank of Nova Scotia...with the biggest stopper being JPMorgan for its client account. The link to the 'action', such as it was, is here.

Despite the fact that both gold and silver were up on the day, both ETFs showed withdrawals. GLD declined 29,226 ounces...and SLV was down 633,631 troy ounces.

The U.S. mint had a sales report yesterday...and it was probably their final one for June. They sold another 3,500 ounces of gold eagles, along with another 426,000 silver eagles. June totals are as follows: 57,500 ounces of gold eagles, 4,000 one-ounce 24K gold buffaloes...and 3,374,000 silver eagles.

Gold eagles sales in June were the lowest so far this year...and silver eagle sales were the third highest. If you include the buffalo sales for June, one-ounce silver eagles outsold gold eagles by almost 55 to 1. I sure hope you're getting your share.

Total ounces of gold eagles sold so far in the first six months of 2011 is 572,000 ounces, along with 78,000 one-ounce gold buffaloes...and a whopping 22,275,500 silver eagles. Using all these numbers, one comes out with a silver/gold sales ratio of exactly 35 to 1. For every ounce of gold the U.S. Mint is selling, it's selling 35 silver eagles. And that, dear reader, is phenomenal.

There was a lot of activity over at the Comex-approved depositories on Tuesday...but not a lot of silver was shipped in...or out. They reported receiving 165,185 ounces...and shipped 235,267 ounces of the stuff out the door, for a net decline of 70,082 troy ounces.

¤ Critical Reads

Respite for the Euro: Greece Dodges Insolvency by Passing Austerity Package

The Greek parliament on Wednesday passed a vital 28 billion euro austerity package, allowing the country to avoid immediate insolvency. Efforts to come up with a vast new bailout for Athens have also made progress this week.

The passage of the belt-tightening measures was a critical step for Greece to avoid immediate insolvency. The European Union had made passage of the package of laws a condition for the release of the next €12 billion tranche from the €110 billion Greek bailout package passed last year. Without that money, Greece would have defaulted on its debt by mid-July.

This Roy Stephens offering was posted over at the German website spiegel.de yesterday...and the link is here.

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Russia cuts power to Belarus

Russia has cut power supplies to cash-strapped Belarus after it failed to make a debt payment due to its mounting economic crisis, the latest energy spat between the two uneasy neighbours.

Russia had threatened to cut off supplies to Belarus last week before extending the deadline to help the ex-Soviet republic come up with the payment. The new deadline expired early on Wednesday.

This particular story is posted at the Australian website sbs.com.au...and was sent to me by Washington state reader S.A...and the link is here.

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World Bank Appoints Madelyn Antoncic as Treasurer

Nick Laird from 'the land down under' sent me the link to this story yesterday...to which he added the following remarks: "You've got to love this - the new VP, and Treasurer of the World Bank was the Chief Risk Officer at Lehman Bros when they went bankrupt. And had been with them since 1999...so she can't say she didn't know what was going on....can she? It just get more comical by the day."

World Bank Group President Robert B. Zoellick said...“She brings to the Bank an extensive background in the financial industry and a demonstrated record of leadership, innovation, and integrity.”

You can't make this stuff up...and the link to the worldbank.org press release is here.

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$200 Billion in Claims Against JP Morgan & Banks: Chris Whalen

With a mountain of litigation claims against banks, King World News interviewed the man Jim Rickards calls the best bank analyst in the country, Chris Whalen co-founder of Institutional Risk Analytics. When asked about JP Morgan’s exposure from litigation Whalen said, “The surviving 33 claims which are straight forward securities fraud claims, much like WorldCom, Enron and that sort of thing, those claims were settled at 50 cents on the dollar.

Eric sent me this blog yesterday...and the link is here.

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Fort Calhoun Nuclear Plant Main Building Underwater, 10 Mile Mandatory Evacuation Area

I don't know how any rational human being can look at this ABC news clip and say that "everything is fine."...because it obviously isn't.

Beam me up, Scotty...because there's no intelligent life down here!

Casey Research's own Louis James passed this 2:53 minute youtube.com video clip around yesterday...and it's well worth watching. The link is here.

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Cost of war at least $3.7 trillion and counting

Here's a Reuters piece that was picked up by news.yahoo.com yesterday.

When President Barack Obama cited cost as a reason to bring troops home from Afghanistan, he referred to a $1 trillion price tag for America's wars.

Staggering as it is, that figure grossly underestimates the total cost of wars in Iraq, Afghanistan and Pakistan to the U.S. Treasury and ignores more imposing costs yet to come, according to a study released on Wednesday.

The final bill will run at least $3.7 trillion and could reach as high as $4.4 trillion, according to the research project "Costs of War" by Brown University's Watson Institute for International Studies.

I thank reader Scot Pluschau for this story...and the link is here.

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Rick Rule Interview at King World News

Eric sent me this audio interview around 4:00 a.m. Eastern time after I was all done, so I'm just inserting it here before I hit the 'send' button. As you can imagine, I haven't listened to a word of it. The link is here.

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Lifting gold's veil of secrecy: Christopher Barker

Here's a short piece from the Motley Fool website that showed up as a GATA release yesterday...and I'll let Chris do the honours. The link is here.

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No $2,000 Gold Without QE3, BofA-Merrill Says

The commodities research team at Bank of America-Merrill Lynch has been on the gold bandwagon since setting a $1,500 price target in 2008, but commodity strategist Francisco Blanch said Tuesday that the best gains are in the rearview mirror and a cyclical peak is likely in the cards as the U.S. interest rate cycle starts to change.

It's hard to believe that any knowledgeable person would fall for this sort of comment. I've been listening to this sort of talk every since gold hit $500 the ounce. This Francisco Blanch character is going to look real foolish when gold blasts through $1,800 an ounce later this year.

I thank reader George Findlay for this forbes.com story. The commentary is mostly b.s...but the picture sure is nice. The link is here.

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Marc Faber Still Loves Gold and Silver, But...

Marc said...“I still like gold and silver. I think it will go down for the next three months or so but I wouldn't short them...[You should] keep on accumulating gold.”

Well, dear reader, I doubt that we'll have to wait that long...so I will take the opposite side of that trade, as I don't think we'll get through the summer without some major price action in both metals.

The 3:47 video clip posted over at wealthwire.com was sent to me by Australian reader Wesley Legrand...and the link is here.

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Pan Asia Gold Exchange welcomed for reducing influence of concentrated shorts

Here's another GATA release that contains an extensive introduction by Chris Powell once again...and I'm not going to re-invent the wheel here, either. The link is here.

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Gold volume yesterday was a very light 85,000 contracts net of what few roll-over there were...and the preliminary open interest number showed a big increase of 9,619 contracts on the back of that jump in the gold price in New York yesterday morning. Even though this number will show a reduction later this a.m...I'm sure that the U.S. bullion banks were the not-for-profit short sellers on the other side of this rally.

The final open interest number in gold for Tuesday's trading day showed a decline of 2,031 contracts. This data will be in tomorrow's COT report.

Silver's net volume yesterday was a very low 32,000 contracts...and the preliminary open interest number actually showed a decline of 565 contracts, which sure surprised the hell out of me. With almost a dollar gain in the silver price, I was expecting an increase...but there may have been some off-setting spread trades that were lifted. It's also possible it could have been a short covering rally. The final open interest number might possibly reveal more, but we won't know for sure until next Friday's Commitment of Traders report.

July [the current delivery month] open interest in silver crashed all the way down to 2,381 contracts in this morning's preliminary report from the CME...and that number is certain to be reduced in the days ahead, so the July delivery month may end up being no big deal. But, with only 110 contracts posted for delivery tomorrow, the July delivery month could end up being another long drawn-out process...just like it was in May. Time will tell.

Tuesday's final open interest number in silver showed a whopping decline of 3,680 contracts. Both Ted and I feel that this was almost all spread related...and tomorrow's COT report will tell all, as this data will be in it.

With the moving averages in both gold and silver still under their respective 50-day moving averages, I doubt very much that it was technical long buying that drove the prices up yesterday...although I reserve the right to be wrong about that.

We're still wandering around in 'no man's land' between the 50 and 200 day moving averages in both metals...and until we break through these moving averages to the upside, the tech funds have no reason to pour in on the long side, because their computer models tell them to sit on the sidelines until these moving averages are broken...and then they jump in.

The technical funds all trade out of the Non-Commercial category of the Commitment of Traders Report...and hold more than 150 contracts long or short in the Comex futures market.

I was very happy to see the price increases in both gold and silver yesterday, but I'm always concerned about who is taking the short side of the trade as buyers go long.

So where do we go price-wise from here? That's a good question...and nothing would surprise me either up or down for the next little while...although the silver price could blow up any time. We still don't know if JPMorgan et al are through doing their thing in the gold market yet, so we'll just have to wait it out.

Nick Laird over at sharelynx.com sent me a very interesting chart in the wee hours of this morning...and it was accompanied by the following preamble...

"Here's a chart of the Gold Price Oscillator I use to watch gold's momentum. [It also works the same for silver.] The oscillator is a derivative of the gold price & has no other inputs, so it's created totally from gold's movements.

"As can be seen here, there is a regular pattern that shows up in the oscillator plot that correlates to the gold price. What I watch out for is the compression in the oscillator followed by the breakout.

"As can also be seen in this chart, if we follow the normal pattern, there should be a sell-off ahead before the next rally begins. That sell-off should occur over the next few weeks and we're part way through that event.

As you know, I'm not a huge T.A. fan...and you can read into this chart whatever you wish...but it certainly looks believable to me.

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The precious metals prices flopped about during Far East and early London trading this Thursday...and volume in both gold and silver is pretty light, so I wouldn't read too much into the price action.

You pretty much should have figured out by now that any significant price changes occur during the Comex trading session...and I doubt that today's price trading action will prove to be an exception to this rule.

I hope your Thursday goes well...and I'll see you here on Friday.