From Ed Steer:

It was another slow trading day in gold and silver in the Far East (and elsewhere) on Thursday. The excitement for the day began at the Comex open, where gold rallied about $22...but in all likelihood, the usual US bullion bank was there to take back most of the gain before trading was over at 5:15 Eastern time yesterday afternoon. Silver spent the entire 24 hour period oscillating around the $9.50 mark. Volume once again was very light in gold...with less than 84,000 contracts traded...net of switches.

Wednesday's open interest in gold showed another decline. This time o.i. was down 610 contracts to 264,186. Silver tacked on a smallish gain of 69 contracts, bringing the total silver open interest up to 82,503. According to an observation by a contributor to yesterday's commentary over at Bill Murphy's lemetropolecafe.com, silver open interest hasn't been this low since July 2003...more than five years ago. That's astonishing!

The usual NY commentator mentioned the following yesterday..."The Gartman Letter has started to gloat about its gold short, predicting $680 and talking about increasing the position (but not acting). Some of gold's friends will see this as encouraging from a contrary opinion point of view."

In other gold news, here's a headline that caught my eye...HSBC Fund Returns to Buying Gold to Hedge Against Inflation: Dec. 3 (Bloomberg) -- "HSBC Investment Management's $2.6 billion Absolute Return Service started buying gold again on expectations that inflation will accelerate...". The GLD was unchanged on Wednesday, but the SLV dropped a million ounces. The Commitment of Traders report is due out at 3:30 Eastern...and I'll report on it tomorrow.

Here's a list of news headlines from yesterday...
1) Big 3 US Auto Makers ask Congress for $34B (Bloomberg)
2) AT&T cutting 12,000 jobs (Bloomberg)
3) Factory orders fall 5.1%...most in 8 years (Bloomberg)
4) ECB cuts rate to 2.5% and ECB President J.C. Trichet may pull a Bernanke and
start "monetizing assets" (The Telegraph) (monetizing assets = printing money - Ed)
5) U.S. Muni Bond Credit Default Swaps Soar as Credit Crisis Hits Governments (Reuters)
6) Dubai Speculators Quit as Lending Drought Burst Desert Bubble (Bloomberg)
7) UN economic team warns of hard landing for dollar (Financial Times)
8) Record number of Americans using food stamps (1 in 10 Americans) (Reuters)
9) Retailers' U.S. Sales Tumble in Worst Month in Four Decades (Bloomberg)
10) Ponzi Scheme at Citi: Suit Slams Rubin (New York Post)
11) China will not save Western Banks (The Telegraph)
12) Merrill Said to Cut Year-End Bonuses by 50% as Revenue Slumps (Bloomberg)

click to enlarge

Three stories today once again. This short James Turk offering is entitled "A Successful Test of Support". It's accompanied by his usual 'feel good' prose...and a bullish chart. The link is here.

In my list of headlines above, I referred to the story about the ECB monetizing their debts...which is a cute way of saying they're going to print money. Another cute name for the same thing is "quantitative easing". This time the story refers to the Bank of England. The headline from The Telegraph in London is refreshingly blunt..."Bank has little option but to ready the printing presses"...and the link is here.

And lastly...a gold investor writing under the name James Conrad (for whom no biographical information is provided) has posted a fascinating (and extremely well written) essay at seekingalpha.com...speculating, as GATA and others have done recently, that the U.S. government soon will stop suppressing the price of gold and instead use a substantial upward revaluation of the monetary metal to devalue the dollar, reverse deflation, inflate crushing debts away, and revive economic activity around the world. Conrad's essay is headlined "The Manipulation of Gold Prices" and the link is here.

The policies (panicky pace of rule changes by Western regulators - Ed) of the developed nations on these financial institutions are not clear. Until they are clear, I don't dare to invest in them. What if they go bust? I will lose everything. - Lou Jiwei, Chairman and CEO, China Investment Corporation, December 4, 2008

With all the bad news yesterday, it's amazing that the Dow wasn't down a thousand points or more. Today's jobs report means that "gentle hands" will probably be everywhere once the data is posted. The Dow, the US$...and gold...all should be watched carefully for their "reaction" this morning.

All of us at Casey's Daily Resource Plus look forward to seeing you here on Saturday morning.

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