ed steer on yesterday's selloff in gold, silver, and all things related:

Both gold and silver were under 'pressure' the moment that the New York bullion banks began trading early Monday morning in the Far East market. With the dollar in a 'rally' mode... and the equity markets around the world heading for the dumpster... it was a good bet that gold and silver were not going to allowed to be the 'go to' asset when 'the West' began trading in London.

Gold was only down about six buck in Far East trading... but the down-trend accelerated the moment that London opened... with the bottom coming shortly after London closed for the day, a little after 11:00 a.m. Eastern time in New York. From its open [and high of $947.60] on Sunday night, to it's low on Monday in New York, gold was down $18.80... 2.0%.

At that low, the dollar 'rally' stopped, and gold gained back a couple of bucks before the end of trading in New York at 5:15 p.m. yesterday.



Silver, as usual, was the 'whipping boy de jour' yesterday. This should be no surprise to you, dear reader, as silver is the centre of the universe for the bullion banks... especially JPMorgan. In the second of two conversations I had with Ted Butler yesterday, he pointed out that before he hit the sack on Sunday night, silver was down 25 cents on only 300 contracts traded!

As I keep harping on, with some very rare exceptions, all gold and silver trading on the planet before 8:15 a.m. Eastern time in North America; is done on air, fumes and vapours...as around 90-95% of all trading volume in silver [and gold] is done during Comex hours in New York. Plus, the New York bullion banks can enter the market at any time during the night [or early morning] to influence prices... and they do. It used to be called the 'New York Access Market' on the Kitco graphs... but now it's more politely called the 'New York Globex'.

And, to make a long story short, the silver market got creamed yesterday... with the selling pressure easing shortly after London closed... just like in gold. From Sunday night's open at $14.71 to it's New York low of $13.81... silver was down 90 cents... 6.11%!



Anyway, all of yesterday's carnage in both metals was done on a U.S. dollar rally of well under 1%. As I've said ad nauseum... the price of gold and silver are determined by which bullion banks are selling... or buying. And two U.S. bullion banks... JPMorgan and HSBC USA both have grotesque short positions in place on both metals and they [for now] can do as they please... and they are!

It was wall-to-wall ugly in the precious metals stocks as well... too ugly to be repeated here again... as I'm sure you've already made careful note of them already.

Friday's changes in open interest were reported yesterday... and they are as follows: In gold, o.i. fell 3,187 contracts to 385,962...on decent volume of 85,243 contracts. Silver o.i. went in the other direction... up 165 contracts to 109,129...on largish volume of 33,169 contracts. I'm guessing, but I think that the reason why the silver o.i. rose instead of fell, is because the bullion banks, instead of covering their short positions... put on more longs instead... or a combination of both.

Without doubt, we should see a fairly large drop in open interest when Monday's gold and silver numbers are published. But, as I pointed out above, the bullion banks are pretty good at hiding their tracks if they wish to do so.