From Ed Steer:

The boys went to work in the precious metals market shortly after 3:00 a.m. New York time yesterday morning. But things really got rolling to the down-side when the Comex opened. Then to make matter worse, the not-for-profit sellers dropped gold $10 in the Globex market almost the moment that the Comex closed. Silver fared far worse...but it was on very light volume once again. Strangely enough, the share prices did very well yesterday. The HUI was actually in positive territory until 1:45 Eastern time when someone thought it might be a good idea if the shares sold off in sympathy with the metals themselves....so they did. You have to ask yourself this question...who would be aggressively buying the HUI in the face of a 3.71% decline in the gold price and a stiff 7.80% decline in silver? Is it the insiders again? Whoever it was, they had very deep pockets in order to turn the HUI positive on a day like yesterday.

You may remember that last week the CFTC announced that they were investigating the silver market again for signs of price management. This time it was being conducted by their Enforcement Division...not their Division of Market Oversight. The CFTC has had ample evidence since that announcement to prove that price management exists. So far they don't appear to be doing much! The action we've seen in the precious metals since that announcement has been anything but free market.

The open interest numbers for Monday were rather disappointing. I was expecting larger numbers...but didn't get them. However, there was more tech fund long liquidation in both metals. Gold o.i. was down another 2,500 contracts and silver o.i. declined a smallish 166 contracts. I was expecting a bigger number in silver. After Tuesday's hammering, both open interest numbers should show further improvement when they become available later this morning.

Yesterday was the cut-off for Friday's Commitment of Traders report. If Monday's and Tuesday's numbers are included (as they should be) then we'll see an even more wildly bullish COT this week than we had last week.

Yesterday was the end of the month and the quarter as well. I'll be shocked if we don't have a huge rally going into the New Year...and it can start any time as far as I'm concerned. Today would be nice.

In other gold and silver news, the production of platinum, silver and gold eagles were huge again for September. It was a record for both platinum and gold. Here's the link to the US Mint's eagles production page. Click here. These gold eagle numbers do not include the four nines fine gold buffalo. The link for that is here.

I see in a Bloomberg story yesterday that Paulson said he will use "all the tools at our disposal to protect financial markets". One would assume, as head of the PPT, he would mean the gold and silver markets as well. But for how much longer, as the physical market is eating the bullion banks alive.

Today's first story is from Ambrose Evans-Pritchard at The Telegraph in London. In this piece he delves into the frantic efforts by Europe and Britain et al, to save their banking systems, This is something I touched on briefly yesterday. If you think it's bad over here...what's gong on in Europe right now should scare you half to death. It's entitled "Financial Crisis: Ireland's banks are rescued" and the link is here.

And if you think that gold demand won't last...this next story from the Financial Times in London should bury that fear once and for all. Even I was taken aback by it. World-wide demand for the physical metal has become insatiable. As the story says, it's "unseen" and "unprecedented" demand for bullion by the rich. The article is entitled "Wealthy Investors Hoard Bullion"...and the link is here.

No matter what the models say, traders are not machines guided by silicon chips; they are impressionable and imitative; they run in flocks and retreat in hordes. - Roger Lowenstein, author: When Genius Failed: The Rise and Fall of Long-Term Capital Management

The word is out that they are going to reintroduce this $700 billion bill again on Thursday. Why would the results be any different this time? It's my opinion that both Bernanke and Paulson should resign and then be taken to the steps of Jefferson Memorial and be hung for treason. And as F. William Engdahl said in his latest piece..."This is the end of the world as we knew it. The American financial Superpower is gone."

See you on Thursday.

Casey Research correspondent-at-large Ed Steer is a keen observer of the financial scene and a board member of GATA.org.