Since I covered the early Wednesday morning bear raid in both gold and silver in yesterday's column, I'm not going to dwell on it again here.

After the smack down, the gold price didn't do a whole lot of anything, but started heading south just a few minutes before trading started on the Comex at 8:20 a.m. Eastern time. The bottom came shortly before 11:00 a.m. Eastern time...and the close of trading in London.

The subsequent rally ran out of legs around 1:00 p.m...and gold more or less traded sideways for the rest of the New York Access Market. Volume was very heavy once again.

Silver's price pattern was very similar to gold's, except for the fact that the sell off began shortly before noon in London...and the low came just minutes after 9:30 a.m. Eastern.

The silver price rallied vigorously from there...up almost $1.40 from its low...before trading sideways to down [just like gold] in the New York electronic market. At it's low, silver was down about $1.50 from Tuesday's close, but the big rally cut the loss to only 41 cents. Volume was very decent.

The gold stocks gapped down big at the open of the equity markets at 9:30 a.m. Eastern time, but turned on a dime about 10:25...which was a huge surprise considering the fact that the gold price didn't bottom until around 10:45 a.m.

By the end of the day, the gold shares had recovered all their losses...and actually finished in the plus column. The HUI was up 0.33%...with gold down $56.30 spot.

The gold price has been clobbered for the last two days in a row...and the HUI closed up both days. As I've been saying for the last two weeks, there are very deep pockets buying gold shares at the moment.

Even with the silver price closing lower for the second day in a row, Nick Laird's Silver Sentiment Index finished up 1.10% on the day. But, like Tuesday, it could have been much worse if the big buyer hadn't been around.

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The CME's Daily Delivery Report showed that 342 gold, along with 178 silver contracts, were posted for delivery on Friday. In gold, the big short/issuer was the Bank of Nova Scotia with 300 contracts to be delivered. The big long/stopper was JPMorgan in its client account. They will receive 336 contracts on Friday.

In silver, the big short/issuer was a name you don't see too often, Deutsche Bank. They will deliver 177 silver contracts on Friday. I'd bet serious coin that DB is one of the big silver shorts in the Comex futures market. There were seven stoppers in total, with the biggest being Merrill. This report is definitely worth glancing through...and the link is here.

GLD had no report but, amazingly enough, the SLV ETF added 2,337,399 troy ounces.

Over at Switzerland's Zürcher Kantonalbank last week, they reported a decline of 14,496 ounces of gold in their gold ETF...and a smallish 9,895 troy ounce drop in their silver ETF. As always, I thank reader Carl Loeb for those numbers.

For the second business day in a row, there was no report from the U.S. Mint.

Over at the Comex-approved depositories on Tuesday, they reported receiving 215,433 ounces of silver...and shipped 36,026 ounces out the door.

Here's an interesting list that Washington state reader S.A. sent me yesterday. It shows [as of Wednesday's closing prices] how well the world's major stock indexes have done so far this year...and it's not a pretty sight.

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Silver analyst Ted Butler published his mid-week commentary to his paying subscribers yesterday...and here's a free paragraph...

"The dramatic sell-offs, particularly at times when the markets are thin, greatly outnumber in frequency any dramatic price rallies. One would think in a free market that dramatic sell-offs and rallies would roughly compare in frequency, especially when one considers that the general sweep of gold and silver prices over the past 5 or 10 years has been to the upside. That is clearly not the case. A subscriber and professional trader e-mailed me this morning that automatic trading halts had been hit last night in Globex gold and silver to the downside, due to the sudden and violent nature of the off-hours sell-off. Automatic trading halts are fairly rare and only occur on large sudden moves where someone is pressing the market aggressively. I asked him how many automatic trading halts had occurred in his memory to the upside. He said he couldn’t remember any but would investigate. He reported back that, over the past year, there had been 18 automatic trading halts to the downside in silver, with only one halt to upside. In gold, there had been 4 halts to the downside and none to the upside over the past year. I would submit that it is impossible for that to have occurred in a free market. I would further submit that I may have understated the case when I referred to the CME Group as a criminal enterprise, interested in advancing its own interests and those of its most important constituent members to the detriment of the public interest."

I'm delighted to report that I don't have that many stories for you today. It always seems to be either feast or famine in the story department.

¤ Critical Reads

London property bubble 'about to burst'

The London property bubble could be about to burst, with the number of "distressed" sellers in the capital rising for the first time, according to one property company.

Nick Hopkinson, the director of PPR Estates, said that over the past few years there had been a rising number of "distressed" sellers in other parts of the country, but London had appeared to be immune as prices continued to rise.

This has changed though within the past two months, with the company now reporting a jump in the number of inquiries from both residential and commercial property owners in the capital who need to access the equity in their home quickly.

This sounds all too familiar. This story, from yesterday's edition of The Telegraph, is courtesy of Roy Stephens...and the link is here.

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British business leaders plead for more quantitative easing

Business leaders are urging the Bank of England to authorise another £50bn of quantitative easing when its monetary policy committee meets today in order to boost bank lending and prevent the economy slipping back into recession.

The Institute of Directors says that without an extension of the current £200bn programme of money creation, there could be "dire consequences" for the government's finances in lost taxes and higher social security spending.

The warning follows figures from the Office for National Statistics that showed industrial production had unexpectedly contracted in July...and the UK economy had slowed down to a point where many business leaders and economists fear the economy stands on the edge of a double-dip recession.

This story, once again courtesy of Roy Stephens, was posted over at The Guardian earlier this morning...and the link is here.

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German Euro Ruling: Karlsruhe Demands Greater Parliamentary Role in Bailouts

Germany's highest court has rejected three lawsuits against euro bailout measures, but its ruling also strengthens the role of the German parliament in determining aid for heavily indebted euro-zone countries. The new procedures are more democratic, but they could also lead to fresh turbulence on the finance markets.

This story is very much worth your while. I thank Roy Stephens once again for providing this story that was posted over at the German website spiegel.de yesterday...and the link is here.

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German court curbs future bail-outs, bans EU fiscal union

It chose to avert Götterdämmerung. The nexus of bail-outs already agreed for Greece, Portugal and Ireland are allowable under Germany's Basic Law - or Grundgesetz - because there is no "automatic" transfer of money beyond the Bundestag's control. Germany may participate in Europe's €440bn (£388bn) bail-out fund (EFSF).

To prohibit the existing rescues would have brought down the temple of monetary union within days, and with it Europe's financial system. The judges did not want a global depression on their conscience.

Here's Ambrose Evans-Pritchard's take on the German courts decision yesterday...and I consider this story a must read. I found it contained in a GATA release...and the link is here.

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Gold Will Now See Massive Mainstream Fund Flows: John Hathaway

Tocqueville Gold Fund manager John Hathaway predicts that mainstream fund managers increasingly will find a place for gold in their portfolios, as nothing else is working very well.

Maybe some of these funds John's talking about are the ones that have been buying up the precious metal stocks during the last couple of weeks.

The blog, posted over at King World News yesterday, is well worth the read...and the link is here.

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Gold: Bullion and shares - Vanguard Wealth Series

We rarely hear anything from the precious metal investment world from the land down under.

Reader Wesley Legrand, a frequent contributor to this column, runs the Adelaide, Australia brokerage firm of Grand Private Equities.

Here he is in this 30-minute audio interview along with Robin Bromby...with Andrew Main as the moderator. The interview is posted on the home page of the Boardroom Radio Australia web site. It's in the right side-bar when the page loads up on the computer...and it starts to play immediately with no further prompting.

Wesley says whenever he's accused of being a gold bug, he always answers that if you're not a gold bug, you much be a U.S. dollar bug! Good point.

The interview is from two days ago...and it's well worth the listen. It's almost pointless to mention that I thank Wesley Legrand for sharing it with us...and the link is here.

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Look who's watching GATA

Here's a very interesting GATA dispatch that came out yesterday...and I don't want to steal Chris Powell's thunder, but here's the first paragraph of his preamble to give you a flavour of this dispatch.

"Just when you start thinking that everything is futile, that everyone connected with the markets is bought off or stupid, and that "Say Not the Struggle Naught Availeth" is getting old, we find out that we're being watched -- and not just by the usual peeping Toms and repo men but by some pretty important and even sinister people."

Having been associated with GATA in one form or another since 2000...all of the stories Chris mentions in this dispatch...along with this particular Paul Krugman/Larry Summers story...strikes pretty close to home for me. You just know you're making a difference when you see something like this.

I will let Chris Powell take over...and the link is here.

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Bolivia Central Bank to Buy Local Gold Output to Boost Reserves

Bolivian President Evo Morales enacted a law authorizing the bank to buy gold through state mining company Empresa Boliviana de Oro, Garcia Linera said in a speech broadcast by La Paz-based television station Bolivision.

The bank will pay miners the same rate as traders who sell the gold to Brazil and Peru, Garcia Linera said. Bolivia’s central bank has increased its international reserves 10-fold to $11 billion since 2005.

This very short story was posted over at Bloomberg yesterday afternoon...and I borrowed it from a GATA release...and the link is here.

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JPMorgan Trapped Short in Silver...Gold Strongly Bid: John Embry

Sprott Asset Management's chief investment strategist, John Embry, commented to King World News yesterday about the volatility in the gold market, the Swiss devaluation, the outlook of Russia and China toward the gold market, and the impossibility of covering the short position in silver.

The link to the KWN blog is here...and I thank Chris Powell for providing the introduction.

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Faced with the choice between changing one's mind and proving that there is no need to do so, almost everyone gets busy on the proof. - John Kenneth Galbraith

It was another big volume day in both gold and silver yesterday. Gold's net volume was in the neighbourhood of 300,000 contracts...and silver's was around 41,000 contracts. Unfortunately, this happened on a Wednesday, so it won't be in tomorrow's Commitment of Traders Report. Too bad.

I was encouraged by a couple of developments yesterday. First and foremost was the continuing strength of the precious metal shares...and secondly, the rebound in gold and silver prices during the New York trading session.

From it's pre-London open high of about $1,922 spot early on Monday morning, to its mid-morning New York low of $1,792 spot...gold declined $120...which is a drop of 6.2% from the $1,922 high.

In response, the HUI has declined a hair over 2% from its high tick on Tuesday. In 'normal' times [whatever that means nowadays] the shares would have got smoked for 10% or more on a drop of that percentage in the underlying metal...and when I was talking with Eric Sprott yesterday, he agreed with that assessment.

Here's the 3-month HUI chart...

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And here's the 3-month gold chart...

(Click on image to enlarge)

The tide turned for the precious metal stocks Wednesday afternoon on August 24th, when gold had one of its biggest down-days in history. The gold price closed almost on its low...and the shares finished [although down on the day] on their high tick. It's been onwards and upwards ever since. Let's hope this trend continues.

In the thinly-traded Far East market earlier today, gold climbed almost $25 from its New York close on Wednesday...and is currently sitting up $20 as of 9:30 a.m. in early London trading. Silver is up about two bits. Volume in silver is still pretty light, relatively speaking...but gold's volume is getting up there.

I would guess that it's going to be another interesting day when the Comex opens in New York at 8:20 a.m. Eastern time.

See you on Friday.