this is today's analysis by ed steer of casey research:

Gold spent most of Far East and European trading hugging $890...and silver spent the same period within a dime of $12.70. Nothing to see here, folks! Then, shortly before the Comex open, both metals began smallish rallies...and half an hour after the Comex opened for business, it was lights out.

Not only did the dealers pull their bids in both metals, but I highly suspect that there was actually some fresh shorting by the Non-Commercials and Nonreportables [in the COT] as well.

As I've been saying for the last week or so, an assault on gold's 200-day moving average would materialize sooner or later, as a couple of the U.S. bullion banks [JPMorgan and HSBC USA] still had huge short positions to unwind. Well, this could be the start. And whether or not they are going to take their sweet time about it...or have it all over and done with by lunch time in New York today...remains to be seen.

Don't forget that despite their attack on gold...silver is still the centre of the universe for the bullion banks. That's why the attack on silver was far more ferocious than on gold If these two bullion banks [and a couple of others] have to cover some of their shorts with physical metal, there are central banks that can [and will] come to their rescue. The last time that happened was during the rescue of Long-Term Capital Management. They were short about 300 tonnes of the stuff. This option does not exist in silver because there just isn't any...except for what's sitting on the Comex in the USA...or in the SLV ETF in Britain. The bullion banks most likely own some of that silver, but there's no way for us to tell.

So, how low could they take gold on this move to the downside? Just looking at the 2-year gold chart posted below, it would be my guess [in a worst-case scenario] that we could see gold in the $825 range, before it became ridiculously oversold. We'll find out, as they say, in the fullness of time.

click to enlarge

http://www.caseyresearch.com/display...