The low on Friday came shortly after 11:00 a.m. Hong Kong time. From there, the price flopped around a bit until the London open at 8:00 a.m. BST...British Summer Time...which is 3:00 a.m. Eastern.

Then a rally of some substance began...and it grew stronger as the day wore on...with the maximum gains coming once London closed for the day at 11:00 a.m. Eastern. The party ended at 12:35 p.m....and gold sold off a bit going into the close of electronic trading at 5:15 p.m.

The move, from absolute low to absolute high, was about $60...and gold closed up $22.70 spot on the day. Net volume wasn't overly heavy at 180,000 contracts.

Silver was also under pressure right from the open of the New York Access Market on Thursday night...and the low was around $39.40...a price that silver bounced off three times...the last being at the London open.

From that low, silver also had a very decent run to the upside, with the price gaining 50 cents between lunchtime in New York...and the end of the rally at 12:35 p.m. Eastern, the same moment that gold's rally ended.

From there, the silver price sold off more than 50 cents before gaining some of that back going into the close of thinly-traded New York Access Market.

From silver's absolute low to absolute high, the metal was up about $1.50...and closed the Friday trading session up 75 cents. Considering the price activity, volume was an incredibly light 33,000 contracts.

For entertainment purposes only, here's the dollar chart for the week that was. From the Monday open to the Friday close, the dollar was down about 95 basis points.

The gold stocks rallied until 1:00 p.m. Eastern...and then slid a hair into the close. The HUI closed up 1.67%.

Here's the 5-day HUI for the week that was. From last Friday's close to this Friday's close, the HUI was down about 3.3% on the week.

For the most part, the junior silver producers were up some rather impressive percentages...and I had one up double digits. But, for whatever reason, the silver stocks that make up Nick Laird's Silver Sentiment Index did not fare as well...and the index only finished up 0.79% on the day.

(Click on image to enlarge)

The CME's Daily Delivery Report showed that 37 gold and 14 silver contracts were posted for delivery on Tuesday. Not much activity...but the link is here if you want to check it out anyway.

The GLD ETF showed an increase of 340,696 troy ounces...and there were no reported changes over at SLV.

The U.S. Mint had another small sales report yesterday...adding another 75,000 silver eagles. Month-to-date silver eagle sales are 1,043,000.

The Comex-approved depositories showed that they received 643,844 ounces of silver on Thursday...and shipped 485,079 ounces out the door.

Well, Friday's Commitment of Traders Report [for positions held at the close of Comex trading on Tuesday, September 13th] showed an improvement in the Commercial net short positions in both silver and gold.

In silver, the Commercial net short position declined by 1,919 contracts down to 45,387 contracts...or 226.9 million ounces. The '4 or less' bullion banks are short 198.4 million ounces of that...and the '5 through 8' bullion banks are short 41.7 million ounces.

Of the 45 traders holding silver short positions in the Commercial category, one of them holds 50% of the entire net short position all by themselves...and that's JPMorgan. The remaining '2 through 8' bullion banks, seven in total, are short the other 50% of the Commercial net short position between them. No shades of grey here.

There was a big drop in gold's Commercial net short position...17,246 contracts...or 1.72 million ounces. The Commercial net short position in gold is now down to 21.0 million ounces.

Of that amount, the '4 or less' bullion banks are short 15.0 million ounces of gold...and the '5 through 8' bullion banks are short 5.17 million ounces. The '8 or less' bullion banks together are short 20.17 million ounces...not quite 100% of the entire Commercial net short position in gold. In silver the '8 or less' bullion banks are short 105.8% of the Commercial net short position...and it used to be a much higher percentage than that.

Without doubt, the bullion banks' short positions have declined even further since the Tuesday afternoon cut-off. The price action would indicate that...and I even suspect that the big rally we saw in both metals on Friday involved a fair amount of short covering.

I had a couple of readers send me a brief 'heads up' about bullion sales in their respective parts of the world. The first is from British reader Tariq Khan. He had this to say...

"My coin dealer told me today that he just does not understand what is going on with the gold price. He opined that the Central bankers are unlikely to succeed if they are responsible for this take down. He is just seeing too much physical demand at the moment. He is turning away enquiries from abroad. The physical supply is disappearing fast, although he managed to find me some sovereigns (these tend to be tax efficient for us in the UK as sovereigns are still legal tender and have been since 1847). I have another coin dealer I occasionally use, he had only 8 gold sovereigns and 4 half sovereigns. The only metal he has to sell at the moment are Silver Eagles and Krugerrands. He tends to sell both silver and gold bars as well, but he has none of those available either. He is out of all other products."

The other is from U.S. expat Bill Goodrich from Hua Hin, Thailand...and this is his report.

"Today I was down in the gold district in Bangkok to buy some bullion on this little pullback...and there was no physical bullion to be had. All the gold shops were packed...and the only thing you could do was pay for an order that would be delivered in 10 days to 2 weeks. I have never seen a lack of physical bullion in this district ever before. There is physical gold on display, but it is all jewelry, which has a much higher margin than just the bullion bars that everyone was wanting."

"At least in this part of the world when gold drops even this little bit, the demand is astounding...and people are out in droves buying for cash. Here, every trade is physical gold...and all the transactions are cash on the barrelhead, so I have no fear that gold will really get a chance to pull back very far at least if the sentiment all over the Asia Zone is the same as it was here today."

Here's a really neat graph that I lifted from yesterday's Casey Daily Dispatch. It shows bank exposure to Greek debt by type of debt. It's worth spending a few moments on.

(Click on image to enlarge)

I don't have that many stories for you today...and only one that I've saved for today's column, because it was just too long to go in a weekday report.

¤ Critical Reads

Mayor Bloomberg predicts riots in the streets if economy doesn't create more jobs

"We have a lot of kids graduating college, can't find jobs," Bloomberg said on his weekly WOR radio show.

"That's what happened in Cairo. That's what happened in Madrid. You don't want those kinds of riots here."

Bloomberg's unusually alarmist pronouncement came as President Obama has been pressuring reluctant Republicans to pass his proposed job creation plan.

"The damage to a generation that can't find jobs will go on for many, many years," the normally-measured mayor said.

This story is posted over at the NYDailyNews.com website...and I thank reader Scott Pluschau for sending it along. The link is here.

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Gordon Brown fears euro crisis worse than Lehman as 1930s beckon

Gordon Brown has warned that Europe's fast-escalating crisis is now more dangerous than the Lehman Brothers disaster three years ago, threatening to tip the West into a 1930s-style slump unless global leaders work together to take dramatic action.

"The euro can't survive in its present form and will have to be reformed drastically," he told a mostly-Chinese audience at the World Economic Forum in Dalian.

"It has morphed into a sovereign debt crisis, and is more serious than 2008 because governments then could intervene to sort of out banks. Now both banks and governments have problems," he said.

This must read story from yesterday's edition of The Telegraph was sent to me by Roy Stephens...and the link is here.

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World's central banks flood market with dollars

Five of the world's top central banks acted jointly Thursday to provide unlimited dollar loans to banks, a move aimed at easing the growing tensions in the eurozone's financial sector and shielding the global economy from its jitters.

The European Central Bank said it will coordinate with the U.S. Federal Reserve, the Bank of England, the Bank of Japan and the Swiss National Bank to offer three-month dollar loans to banks through the end of this year. There was no separate statement from the Fed.

The coordinated effort aims to prevent Europe's debt crisis from derailing the global economy's rebound from recession, a topic that will dominate talks between U.S. Treasury chief Timothy Geithner and his European counterparts at a meeting beginning Thursday night and running through Saturday in Poland.

This AP story was picked up by news.yahoo.com yesterday...and it's certainly worth the read as well. I thank J. Cherry for sharing this story with us...and the link is here.

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Ireland's trade surplus third highest in EU at €21.3bn

Despite Ireland's banking woes, the country seems to be doing OK economically, at least for the moment.

This was fuelled by a 7 per cent rise in exports over the period to €46.2 billion, while imports were 9 per cent higher at €24.9 billion.

The UK reported a deficit of £56 billion, the largest in the EU, followed by France at €45 billion.

The other so-called PIIGS nations all reported large deficits, with Spain at €23.8 billion, Italy recording a €22.1 billion trade deficit, and Greece at €9.5 billion. Portugal’s trade deficit over the six months was €8.6 billion.

This short story, posted in the Irish Times yesterday, is well worth skimming...and I thank Roy Stephens for sending it. The link is here.

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UBS rogue trader: Investigations focus on fictitious hedges

A major internal inquiry is under way at the Swiss bank's London office to understand how its control systems failed to pick up unauthorised trades by its "Delta One" trading desk as long ago as 2008.

Investigators are understood to be reaching the conclusion already that the fraudulent activity was almost identical to that discovered at French bank Société Générale three years ago.

"This isn't just spookily similar to Soc Gen. It is exactly the same," said one source with knowledge of the situation.

This is a very interesting read...and, once again, I thank Roy Stephens for sharing it with us. The link to the story out of yesterday's edition of The Telegraph, is here.

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Interview with Jim Rickards: King World News

Here's an interview that Eric slipped into my in-box in the wee hours of this morning. I haven't had time to listen to it yet, but certainly will before the day is out. As always, I consider what Jim has to say as a must listen...and the link is here.

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China sets national gold standard

China has set its first national standard for gold at 99.999 percent purity, state media Xinhua reported on Friday, citing the National Gold Standardisation Technical Committee.

The national standard, which is in line with requirements for gold bars set by the London Bullion Market Association, is seen by industry observers as another step towards liberalisation of the country's booming gold sector, paving the way for the opening up of a physical trading market in future.

"Chinese gold bars are now only recognised by local exchanges but not by the international market," said a physical gold dealer in Singapore. "One of the requirements for recognition by the international market is 99.999 percent purity. I think this is a necessary step to link up with the rest of the world."

This must read Reuters story was filed from Beijing yesterday...and was sent to me by Edmonton reader B.E.O. The link is here.

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Interview with Robin Griffiths of Cazenove Capital Management

I believe I posted the King World News blog of this interview in either my Thursday or Friday column...and I can't remember which. Eric sent me the full interview [which he calls "tremendous"] earlier this morning...and the link is here.

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Barclays to Open London Precious Metals Vault

The facility may be operational by next summer, the bank confirmed in a statement. It’s joining The Brink’s Co., which opened a vault in London earlier this year and is considering building another facility.

Gold is set for an 11th straight annual gain, the longest winning streak since at least 1920, as investors have shunned equities and some currencies amid concern about slowing economic growth and debt crises.

This short, but very interesting Bloomberg story, was sent to me by reader Scott Pluschau...and the link is here.

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How can they notice Swiss franc's devaluation and not gold's too?

Is GATA really asking too much in seeking acknowledgement that the gold market is manipulated largely surreptitiously but sometimes openly by Western central banks? Is nearly everybody in the world's financial establishment and financial press an absolute moron or corrupt?

Resounding answers in the affirmative were delivered this week by Debbie Carlson of Kitco News and the research director of Thomson Reuters GFMS, Neil Meader.

Chris Powell gets all wound up in this must read GATA release...and I'll leave the rest of what he has to say in his more than capable hands. The link is here.

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Updated silver lawsuit identifies Morgan trading mechanisms, traders, 'spoof'' and 'fake' trades

Here's another GATA release from yesterday. Chris Powell has a lot to say here as well...and the headline should give you a strong hint as to the contents of this must read dispatch...and the link is here.

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Delta One: Credit Bubble Bulletin - Doug Noland

One of my own personal must reads every Friday night, is Doug Noland's Credit Bubble Bulletin over at the prudentbear.com website.

His commentary this week is particularly poignant...and is well worth your time, if you have it. You have to scroll about three-quarters of the way down the page to find it...and the link is here.

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It’s the Economy, Dummkopf!

With Greece and Ireland in economic shreds, while Portugal, Spain, and perhaps even Italy head south, only one nation can save Europe from financial Armageddon: a highly reluctant Germany. The ironies—like the fact that bankers from Düsseldorf were the ultimate patsies in Wall Street’s con game—pile up quickly as Michael Lewis investigates German attitudes toward money, excrement, and the country’s Nazi past, all of which help explain its peculiar new status.

This story, which is from the business section of the September issue of Vanity Fair, is your very long read of the day. I stole this from a King Report earlier this week and, because of its length, was obviously destined to show up in my Saturday column, which it has...and the link is here.

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In their intense meditation, the hidden sound of things approaching reaches them...and they listen reverently...while in the street outside, the people hear nothing at all. - C.P. Cavafy [1863-1933]

Today's 'blast from the past' certainly need no introduction, nor does the group that sings it...so turn up your speakers and click here.

Friday's price action was intriguing. New lows for this move down were set in both gold and silver so, without doubt, there was more technical fund long liquidation to go with it. I also suspect that the rally that began in both metals at the London open had a large short-covering component attached to it...and the preliminary open interest numbers sort of hint at that, but we'll have to wait until Monday to get a clearer picture...and next Friday's Commitment of Traders Report...to be absolutely sure.

Gold and silver's big down-day on Thursday involved a lot of long liquidation as well...and the final open interest numbers certainly reflected that fact.

Gold's low tick during the Friday trading day took it within forty bucks of its 50-day moving average...and despite gold's big rally off that low, we may not be out of the woods in gold just yet.

As Ted Butler said on the phone yesterday, it's impossible to tell whether we've seen the end of this engineered price correction in both metals or not...especially in gold. There were certainly signs that it was...but I wouldn't bet the ranch on it. Here's the 50-day gold chart.

(Click on image to enlarge)

I consider silver to be pretty much cleaned out to the downside as of Friday's close...and unless we get some serious upside price action on Monday or Tuesday...next Friday's COT report should confirm that. We'll see.

That's it for the day...and for the week. Enjoy what's left of your weekend...and I'll see you here on Tuesday.