Not much happened with the gold price until London opened at 8:00 a.m. local time [3:00 a.m. Eastern]. Then the selling pressure began...and picked up steam the second that the Comex opened for trading at 8:20 a.m. in New York.

The low of the day was the London p.m. fix...and that stands out like a sore thumb on the Kitco chart below.

From there, the price recovered a bit in the following half hour...and then traded sideways for the rest of the day, as even the crooks at the U.S. bullion banks took a break for the July 4th long weekend. Volume was more than decent...and even higher than Thursday.

The selling pressure began on silver shortly after the Far East trading day began. Then, like gold, the downward pressure accelerated both at the London open and the Comex open...with the low coming at the London p.m. gold fix. The subsequent price recovery soon took a sharp turn to the right...and that was it for the day. Silver closed down 87 cents but, at its absolute low, the price was down $1.48. Volume was nothing special...but a bit higher than Thursday.

Basically the dollar did nothing on Friday...just like it did on Thursday. Below is the 5-day dollar chart for the week that was. You can see where the dollar's fall ended about 1:00 a.m. on Thursday morning. This was the official end of the gold and silver rally...and it has been downhill ever since.

For the week that was, the world's reserve currency was down 1.6 cents...or 2.1%. The gold price was down about 1% on the week...and silver was up less than a percent. Not too much dollar/gold price relationship here.

Needless to say, the gold stocks gapped down at the open, with the low coming at the London p.m. gold fix. They recovered a bit, but then flat-lined until shortly before 2:00 p.m. before rallying a hair...closing well off their lows of the day. The HUI finished down 1.61%.

Here's the 5-day HUI chart for the week that was.

Quite a few of the silver stocks I follow/own, trade only on the Toronto exchanges...so I don't have a feel for how most of the junior producers fared yesterday, because the markets were closed here for Canada Day. However, considering the price action, it's no surprise that Nick Laird's Silver Sentiment Index finished down...but it was only down 0.86% on the day. I'm very encouraged by that, as I believe that this indicates we are close to a major low in the silver price.

The CME's Daily Delivery Report showed that 108 gold, along with another 19 silver contracts, were posted for delivery on Wednesday. JPMorgan and the Bank of Nova Scotia were bit players in the delivery report yesterday...and HSBC USA was nowhere to be found. The link to that action is here.

The GLD ETF had another withdrawal yesterday. This time it was 77,932 troy ounces...and there were no reported changes over at SLV.

There was no report from the U.S. Mint yesterday, which didn't surprise me in the slightest.

The Comex-approved depositories showed that there was no silver taken into inventory on the last day of June. However 736,472 ounces were shipped out the door, most of it from Brink's, Inc...and all of it was out of the Eligible category. Comex warehouse silver stocks as of the close of business on June 30th showed 98,713,965 ounce of silver in both categories. Here's the link to that.

I mentioned in this column yesterday that I was more than interested in what Friday's Commitment of Traders Report had to show...and I wasn't disappointed. I was expecting a very positive report...and it was certainly all of that.

The bullion banks reduced their short position in silver by a whopping 6,398 contracts...32.0 million ounces...and the Commercial net short position is now down to 145.8 million ounces. I can't remember the last time that number was that low. Ted Butler will know for sure...and I'll just 'borrow' that info from his weekend commentary and post it in my Wednesday column.

The '4 or less' traders are short 173.2 million ounces...and the '8 or less' traders are short 208.1 million ounces.

In gold, it's been a very long time since I saw the bullion banks reduce their net short position this amount in one week. The COT report showed that it fell by a stunning 42,492 contracts...or 4.25 million ounces. The Commercial net short position is now down to 20.9 million ounces.

The '4 or less' traders are short 15.2 million ounces of gold...and the '8 or less' traders are short 22.0 million ounces.

This big drop in open interest occurred because the 50-day moving average finally got taken out to the downside with some authority during the reporting week.

Without a doubt, there has been even further improvement in the internal structure of the COT report [in both metals] since the Tuesday cut-off...especially with the negative price action we've seen on both Thursday...and especially Friday. More tech fund longs are selling out as the price of gold and silver hit new lows for this move down. There is obviously more blood in this tech fund silver stone than both Ted and I had imagined. And there's some new short positions being placed as well.

Here's Ted Butler's Day's of World Production to Cover Short Positions graph that's current as of the Tuesday cut-off for yesterday's COT report. Note the days-to-cover by the 1-4 and 5-8 traders in both gold and silver.

For a comparison, here's the same graph from the middle of August 2010...just before the big JPMorgan-inspired short covering rally began last summer. Notice how dramatically the days-to-cover have improved in both metals compared to the current chart posted above.

All the price rises...and declines...since last August's low, have been JPMorgan's attempts to get out of their obscene short position in silver, using every trick in the book...including the 'drive by shooting' on Sunday, May 1st by their high frequency traders.

For some of you newbie readers out there, I'd like to post this chart which I've put up in this column more than a few times, but it's been a while since the last time.

I always talk about the London open, the Comex open and the London p.m. gold fix...and why everything seems to revolve around those times. Here's a chart that Nick Laird and I worked on for many weeks...I supervised as he did all the work.

The chart is headlined Intraday Average Gold Price Movements. The average gold prices plotted on this chart was obtained from four years of data -- from March 2006 through to March 2010 -- approximately 1,000 trading days.

The London open, the London a.m. fix, the Comex open...and the London p.m. fix are all inflection points on this graph. You can see how the prices are 'suppressed' during the time that London is open for the day, as the N.Y. bullion banks just pile on during the Comex trading session. It's worth a few minutes of your time to look this graph over.

I have a fair number of stories for you today...and a lot of them are ones that I've saved because their was just no room for them in my weekday missives. A few of them are background material that just wasn't suitable to post except for today...and with the long weekend both in the U.S. and Canada, I hope you have the time to wade through them.

[PRODUCTION NOTE: It looks like you won’t have to wade long. Unfortunately when Ed emailed his column for production, most of his Critical Reads; the Funnies; and the Wrap were all lost in cyberspace. Ed was just sick about it but didn’t have the energy at 4:00 am to recreate it all. Please read on for those Critical Reads that did make it.]

Global 'train wreck' coming

Great Recession cooks Friedman and Keynes: Two great theories, neither up to today’s task

Goldman Sachs’s Connections With Central Banks Reach Deeper After Hiring

Sell, sell, sell: everything must go in great fire sale

'Corrosion of the Freedom to Travel': Denmark to Reintroduce Border Controls on Tuesday

Not very funny… but all lost in cyberspace.

Well folks, we sincerely apologize for the shortened Saturday edition of Ed Steer’s Gold & Silver Daily. Ed was quite beside himself about all the information (and hours of work) that were lost and wanted you to know he’s sorry. We hope you enjoy this holiday weekend. Happy Fourth of July and Happy Birthday Canada.

Until next week…

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