From Ed Steer:

Gold surged in Far East trading on Tuesday morning, but at precisely 3:00 a.m...again...someone was there to make sure that gold did not get through $750 for any length of time. Gold tried again to break through $750 shortly before the Comex open, but that didn't happen either. From there, gold got sold down until London closed. Then it rose, but did not make it over $740 for the rest of the Comex session. Tuesday was options expiry on the Comex, so I'm sure that the JPM and HSBC didn't want any more of those lovely options to expire in the money than was necessary.

But as bad as the price management was in gold, in silver it was the most blatant I have ever seen. They aren't even trying to hide anymore. Silver peaked at the London open...got absolutely hammered to a new low price of around $8.40...which was the Hong Kong close. From there it rose until shortly after the London silver fix. Then the price managed to hold its own until the London p.m. gold fix...but then the dealers once again pulled their bids...with the bottom being (as usual) the close of business in London. Silver wasn't allowed to close over $9.00. After that, silver was allowed to rise right into the close of trading on the Globex in New York at 5:15 p.m. Everything in both gold and silver yesterday had to do with options expiry and allowing JPM/HSBC to cover more silver shorts while they were at it. I said on Friday that the gold bottom was in after that take-down in the wee hours of Friday morning. Well, I think we've seen the bottom for silver now as well. Here's yesterday's Kitco silver chart. There's nothing free market about any of yesterday's silver price action...or gold for that matter. They don't call the Comex, the Crimex, for no reason.

click to enlarge

I note that the big early Wednesday morning rallies in both gold and silver in the Far East got stopped dead in their respective tracks at exactly 8:00 p.m. New York time last night, after gold had the audacity to break through $750 again...and these rallies have now been totally reversed as I write this. It's options expiry in the OTC market today, so we could see this price capping action by the boyz until we're past that. Then there's first day notice on Friday. We'll see if they can keep a lid on it for that long.

On Monday, gold open interest fell another 3,619 contracts to 314,297. Silver o.i. actually rose a bit...up 174 contracts to 93,898. It will be interesting to see what Tuesday open interest change shows in silver, considering how ruthlessly JPM/HSBC went after that market. Those numbers will be reported later this morning and I'll have them for you in my rant tomorrow.

In other gold-related news yesterday, the usual NY gold commentator had this to say..."The ECB (European Central Bank) weekly statement of condition indicated that one captive CB (central bank) sold E1Mm of gold (0.05 tonnes). Last week the amount was 2.16 tonnes. Clearly the ECB group does not wish to seem involved in what is happening in gold." (Of course it's not the Europeans...it's '2 or 3' US bullion banks...and we know who they are! - Ed). In a noworldsystem.com story, the headline reads "Gold Runs Out in Germany"...."Risk-averse Germans are turning to gold in troubled times - but there's none left. German gold dealers say demand has skyrocketed this past week to 10 times normal so no more orders can be taken for the foreseeable future." And lastly, from gulfnews.com, the headline reads "Dubai runs out of gold on Diwali"..."A massive rush at jewellery shops has led to a shortage of gold at some outlets, prompting some shopkeepers to overcharge customers...Shopkeepers said the rush, a combined result of the Hindu festival and lower prices, has resulted in a shortage of gold bars." Shortage??? The good folks in Dubai don't know the meaning of the word. Look at what Tulving is paying for gold and silver right now. Click here and then scroll down. Oh yeah, I almost forgot...Dennis Gartman added another "unit" to his gold position yesterday.

In other news headlines..."US home prices plunge record 16.6% in August"..."The Conference Board Consumer Confidence Index Plummets to an All-Time Low"...from 61.4 in September to 38.0 in October. "Chicago Fed Midwest factory index falls to 5-year low"..."US public pension funds face big loses"..."Citigroup (C) Won't Make It"..."GLG chief Emmanuel Roman warns thousand of hedge funds on brink of failure"..."Britain may need 0% interest rate to avoid a depression, leading economist warns"..."PM Putin suggest Russia, China ditch dollar in trade deals". Yep...everything is fine.

Three stories again today. The first is a story from the British paper, the Financial Times. The article is about the financial goings-on in Russia...as it to, teeters at the brink. The headline reads "Onward to 1998: Russia" and the link is here.

The next story is from Germany...spiegel.de...and is entitled "JOUSTING EGOS: Germany and France Compete for Role of Financial Saviour". The headline says it all, and the link is here.

The last story is one I referred to in a prior paragraph. It's from The Telegraph in London and is entitled "GLG chief Emmanuel Roman warns thousands of hedge funds on brink of failure"...and the link is here.

A bear market rally is all we had yesterday. Will it last until election day? It matters not...just like it doesn't matter who is the next president. And whatever interest rate cut we get today...that won't matter either. As I said yesterday, nobody (including either one of them) can stop the great unwinding. Doug Casey is right...the "Greater Depression" is exactly what it's going to be.

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.