patrick heller of numismaster has a lot to say about the bill to audit the fed, goldman sachs and its market-rigging software, and the precious metals markets:

There are significant stories flying around London and Washington that extremely bad news is going to be forced into the public eye at the end of August or in September. Among the kinds of news expected to be revealed are further major losses in the residential real estate mortgages, credit card debt and the commercial real estate market. Multiple sources are indicating that if you want to be able to purchase physical gold and silver, you probably should plan to take delivery by Aug. 20 or so at the latest (actually there is apparently some specific significant financial news that will be publicly disclosed on July 22 that would have an impact on precious metals markets, but I have no details what this involves).

Adrian Douglas, a professional commodity analyst and member of the Board of Directors of the Gold Anti-Trust Action Committee (GATA), published an analysis Saturday revealing his discovery why the COMEX gold market reports on trading activity and the movement of metals were not making sense. In addition to being able to settle COMEX contracts by either delivering physical metal or paying cash, a gold contract can be settled by "substantially the economic equivalent" of gold. What has happened is that many COMEX gold contracts are being settled with shares of gold exchange-traded funds (ETFs). In theory, these ETFs own physical gold covering all of the outstanding shares, typically 1/10th ounce of gold per share. However, there are so many loopholes in the ETF contracts that allow the managers of the fund to effectively hold paper contracts rather than physical metal that there is significant doubt that the ETF could deliver gold to redeem outstanding shares. The rules of the COMEX silver market do not (yet) allow contracts to be settled with ETF shares.

This strategy of delivering "potentially paper gold" to satisfy contracts requiring delivery of physical gold has now been adopted by the Tokyo Commodity Exchange and Tokyo Stock Exchange. Prices of precious metals took a major hit last week. The G-8 Group of the world's largest economies plus Russia met in Rome last Wednesday through Friday. One of the subjects certain to be under discussion was the deteriorating position of the U.S. dollar as the de facto world reserve currency. The U.S. government has a strong interest in preventing any discussion of alternatives to the U.S. dollar. One way to "show" that the dollar is still strong and doesn't need any replacement is to knock down gold and silver prices significantly just before the meeting started. Funny - that is exactly what happened.

It is difficult to see developments such as these and still have any justification for the U.S. government's claim that there is no manipulation of the gold and silver markets.

http://www.numismaster.com/ta/numis/Article.jsp?ad=article&ArticleId=7004