The gold price didn't do much until shortly after 1:00 p.m. Hong Kong time during their Thursday afternoon. Then it developed a negative bias and began to roll over shortly after 9:00 a.m. in London. The low of the day, around $1,520 spot, came at precisely 12 o'clock noon in London...which just happened to coincide with the London silver fix.

Once that low was printed, a smallish rally began that lasted until minutes after 2:00 p.m. in the New York Access Market...and from there it traded more or less sideways into the 5:15 p.m. Eastern close.

The gold price closed at $1,545.50 spot, down $10.80 on the day. Volume was 131,000 contracts, even bigger than the 122,000 contracts traded on Wednesday. It's a pretty good bet that there was a lot of spec long liquidation with that new low price tick in London.

Silver's price path was more or less the same as gold's...and by 11:45 a.m. in London, it was down about 40 cents from its New York close on Wednesday. Then, in the space of fifteen minutes, the silver price got pasted for another 70 cents...with the absolute low price coming at 12 o'clock noon which, as I mentioned above, was the exact moment of the London silver price fix.

Then a substantial rally got under way...and by minutes after 4:00 p.m. in New York, the silver price was up about $1.70 off its noon low in London. It then traded sideways into the close.

The silver price closed at $27.70 spot...up 62 cents from its Wednesday close. Thursday's volume was a very chunky 37,000 contracts, even higher than the 32,000 contracts that traded on Wednesday.

The dollar traded sideways until around 3:00 p.m. Hong Kong time. At that point, a smallish 30 basis point rally developed which lasted until a few minutes after 12:00 o'clock noon in London...the time of the silver fix. Then the dollar proceeded to give up all its earlier gains, closing down about 10 basis points on the day.

Although the price trends matched, it would be a real stretch to say that yesterday's dollar movements were a determining factor in what the precious metal prices were doing.

Even though the gold price never came close to finishing in positive territory, the gold stocks did very well for themselves. They started off in the red, but within an hour were in the black...and the HUI finished up 2.04%. Were insiders buying shares at the bottom of the market, or was there short covering going on?

The large cap silver shares did OK as well, but the junior producer as a group did a little better. Nick Laird's Silver Sentiment Index closed up 2.44%.

(Click on image to enlarge)

Today is First Day Notice for delivery into the January contract...and I was somewhat surprised at the Issuers and Stoppers Report from the CME late last night. Their report showed that 852 gold and 239 silver contracts were posted for delivery on Monday.

In gold, the big short/issuer was the Bank of Nova Scotia...and the big long/stopper was JPMorgan. They're receiving 741 contracts in their proprietary [house] trading account...plus 66 contracts in their client account on Tuesday. You can see that JPM is doing more gold buying and selling for its own account, than for its clients...and by a wide margin.

In silver, the big short/issuers were Jefferies and the Bank of Nova Scotia...with 116 and 96 contracts respectively. JPMorgan was just about the only long/stopper. They will take delivery of 157 contracts for their in-house trading account...and 77 contracts on behalf of their clients. The link to all the action, which is worth a look, is here.

Despite the pounding that both gold and silver have taken over the last couple of days, there were no reported changes in either GLD or SLV yesterday. Maybe there will be some withdrawals posted today.

There was no sales report from the U.S. Mint.

Yesterday the Comex-approved depositories reported that 597,077 troy ounces of silver were deposited...and 502,246 ounces were withdrawn.

I have a very short report tonight, so I thought I'd puff it up a bit by sticking in one more free paragraph from silver analyst Ted Butler's Wednesday comments to his paying subscribers...

"We are at an important junction for silver. The commercials have clearly manipulated the price lower so that they could buy as much as possible. They have succeeded beyond my expectations, to be sure. This has put the commercials in their best position yet to exit the long-term silver manipulation. Whether they will refrain from future manipulation will become obvious on the next silver rally. I know that this has been a trying time for silver investors, but it’s important to both understand what has happened...and to look ahead. The intentional price smash has created a powerful set up for the next silver rally. Shame on the COMEX commercial crooks and the regulators who have been derelict in fulfilling their principal mission of protecting the public and preventing manipulation. Just don’t compound the pain by missing what should be a coming silver rally of historic proportions."

As I mentioned in the previous paragraph, I don't have many stories today, which suits me fine.

¤ Critical Reads

SEC chided again by judge in Citigroup fraud case

The U.S. Securities and Exchange Commission got a fresh dressing-down from the judge who rejected its $285 million settlement with Citigroup Inc, as he said the regulator kept him out of the loop on its efforts to salvage the case.

In his latest sharply-worded order, U.S. District Judge Jed Rakoff chastised the SEC for not telling him it had filed an emergency request with an appeals court to put the case on hold, after making the same request to him.

So when Rakoff on Tuesday issued a ruling opposing any delay in the case, he was beaten to the punch; 78 seconds earlier, the 2nd U.S. Circuit Court of Appeals had granted the SEC the temporary halt it sought.

He also accused the SEC and Citigroup of potentially "misleading" the court, saying they called him around 3:30 p.m. EST (2030 GMT) on Tuesday to discuss the case, without mentioning the filing with the 2nd Circuit.

This SEC/Citigroup scenario is really starting to turn into something...and this Reuters story posted over at the cnbc.com website yesterday is a must read. I thank West Virginia reader Elliot Simon for sending it to me...and the link is here.

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John Williams: The US Has $100 Trillion in Debts & Obligations

Eric King sent me this John Williams blog. We haven't heard from John for ages...and if you're a fan of his, this is certainly worth your time. It's posted over at the King World News website...and the link is here.

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Financial market credit tightened at year end: Fed

Banks tightened the screws on lending to major financial market participants in recent months, the U.S. Federal Reserve said on Thursday, reflecting concerns about Europe's banking crisis.

The central bank's survey of senior credit officers did not mention Europe directly, but indicated a "broad but moderate tightening of credit terms applicable to important classes of counterparties over the past three months."

Large financial firms have been under pressure from worries that Europe's political deadlock may eventually lead to some type of sovereign debt default, saddling institutions with massive losses.

The Fed said tighter credit terms were especially evident for hedge funds, real estate investment trusts and non-financial corporations.

This is another Reuters piece that was picked up by cnbc.com...and Elliot Simon's second offering of the day. The link is here.

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Eurozone credit crunch fears on M3 money contraction

Data released by the European Central Bank shows that M3 money figures tracked by experts as a leading indicator for the economy have turned negative since August, signaling almost certain recession over coming months for the region as a whole.

"The message of these numbers is that the eurozone faces a bleak 2012, with inflation falling rapidly," said Tim Congdon from International Monetary Research. "There is a desperate need to restore growth to the banking system and boost the quantity of money."

Credit to households and business is still growing at 1pc on an annual basis, but on a month-to-month basis it has been flat for months and is now shrinking. It is broadly the same picture for the "broad" M3 money supply, which includes cash and a wide range of accounts and forms a key pillar of the ECB’s monetary policy.

This Ambrose Evans-Pritchard article was posted in The Telegraph yesterday afternoon...and I thank Roy Stephens for providing this story. The link is here.

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Italian bond auction highlights eurozone nation's woes

Signs that Italy faces a tough start to 2012 were evident on Thursday as the country's final bond sale of the year saw nervous investors demand close to 7pc to hold the ailing nation's 10-year debt.

The closely-watched auction saw Italy sell €2.5bn (£2.09bn) of 10-year bonds at an average rate of 6.98pc, down from euro-era highs of 7.56pc at an auction on November 29, but still at levels regarded as unsustainable. Demand outstripped supply by a ratio of 1.36 to one, compared with 1.34 at the last auction.

This is another Roy Stephens offering from yesterday's edition of The Telegraph...and the link is here.

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Former Deutsche Bank CEO Hilmar Kopper: 'Money Needs Laws'

As the former head of Deutsche Bank, Hilmar Kopper was once the most powerful banker in Germany. In an interview with SPIEGEL, the 76-year old takes stock of his career and the current crisis shaking Europe. The three main constants he has seen the world, he says, are "money, avarice and greed."

This rather long 3-page interview was posted over at the German website spiegel.de yesterday...and I thank reader Bob Fitzwilson for sending it along. The link is here.

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Rick Rule audio interview at King World News

Eric King sent me this audio interview on Wednesday night...and because I just had no room it in Thursday's column, it had to wait until my column today....and Edmonton reader B.E.O. also recommended that I post it, so here's the link.

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John Hathaway on CNBC's 'Fast Money'

Here's a 5:55 video clip that was posted over at cnbc.com yesterday. The talking head that is interviewing him is a real doorknob...and you can tell by John's tone of voice that he's more than a bit underwhelmed by this guy. I thank Elliot Simon for sharing it with us...and the link is here.

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Jim Sinclair: The depth of despair in the gold community

Here's commentary from Jim that was posted on his jsmineset.com website yesterday. I borrowed it from a GATA release...and the link to this very short read is here.

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Metals' plunge is just paper illusion, not real metal, von Greyerz says

Interviewed by King World News yesterday, fund manager Egon von Greyerz affects calm in the face of the plunge in gold and silver prices, asserting that the plunge is just a manipulation of a thin paper market and that little real metal is being sold. Von Greyerz predicts a spectacular new year for the metals.

Eric King sent me the KWN blog...and I lifted Chris Powell's introduction from a GATA release yesterday. The link is here...and it's a must read.

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Jim Rickards - US to go to War with Iran, Oil & Gold to Spike

Here's another blog that Eric King slid into my in-box just before I hit the 'send' button. The title pretty much says it all. I've already read it...and it's another must read for sure...and the link to this King World News blog is here.

View full GSD edition

If I had to bet ten bucks, I would bet that we probably saw the lows for gold and silver at the London silver fix at 12 o'clock GMT on Thursday. I would also bet that the subsequent rally in silver was instigated by the commercial traders, as they will certainly take the opportunity to buy back the long positions of Ted Butler's raptors as they begin to take profits. It will be interesting to see if they actually do sell this time around...and if they do, how much will they sell...and how fast will they do it?

I was also impressed by the rally in the gold stocks...finishing solidly in the black despite the fact that gold closed down ten bucks.

Today we get the Commitment of Traders Report at 3:30 p.m. Eastern time. I'm sure it will be a sight to see. However, the big declines in both silver and gold on Wednesday and Thursday won't be included...and as I said yesterday, it was my opinion that it was planned that way.

Not that I wish to rain on anyone's parade at this point, but I would be more than happy to see any huge rally in both gold and silver not get started until after Tuesday of next week. If that turns out to be the case, then a complete picture of what happened yesterday and Wednesday will be visible for all to see in next Friday's COT report. We also get a Bank Participation Report from next Tuesday's data, so that would be extra icing on the cake, because JPMorgan's remaining short position will be obvious to all...and the talk of the town...at least in this column.

Here's the 1-year gold chart. If you use the 'click to enlarge' feature, you can see that gold's low of September 26th was taken out [by a hair] by the low set yesterday...and we'll also find out soon enough if that positive hammer on this chart from yesterday means anything from a technical analysis point of view.

(Click on image to enlarge)

And here's the 1-year silver chart. Yesterday's low at the London silver fix matched the September 26th low. Is a 'double bottom' being placed? I don't know how the T.A. types will interpret this. One thing is for sure, we are at all-time record lows in every category in the COT for silver. This is way beyond blood-out-of-a-stone territory. The only thing that is unknown is how many more traders can be enticed into going short at this price level, as there is virtually no spec long liquidation going on.

That's why today's COT report is so important...and why I don't want to see a monster rally in silver until after next Tuesday's cut-off for next Friday's COT report.

(Click on image to enlarge)

As of 3:15 a.m. Eastern time, London has been open about fifteen minutes...and gold is up about fourteen bucks...and silver is down about two bits. Volume in gold is nothing special...and silver volume is tiny by comparison. In light of what happened yesterday, I'll be more than interested to see what happened at the London silver fix today, which occurs at 7:00 a.m. Eastern time...which is noon in London.

But I expect the real action to be in New York...and to tell you the truth, I haven't got a clue as to what kind of action that might be. Like you, I'll just have to wait it out.

As I said in this space a week ago, you should carefully note that JPMorgan et al still have gold and silver bullion marked down to fire-sale prices, so there's still time to either re-adjust your portfolio, or get fully invested in the continuing major up-leg of this bull market in both silver and gold...and I respectfully suggest that you take a trial subscription to either Casey Research's International Speculator [junior gold and silver exploration companies], or BIG GOLD [large producers], with all our best [and current] recommendations...as well as the archives. A subscription to the International Speculator also includes a free subscription to BIG GOLD as well. And don't forget that our 90-day guarantee of satisfaction is in effect for both publications.

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