Gold and silver prices ambled aimlessly all through Far East and European trading on Thursday. The real action began moments after the Comex opened in New York, where explosive rallies in both metals were capped by the not-for-profit sellers barely after they got started…and that was it for the day.

Open interest in gold on Wednesday showed a decline of 5,975 contracts. For silver, o.i dropped 1,391 contracts…which is a real surprise considering the huge rally in the silver price after the London a.m. fix

With options expiry, first day notice and month end out of the way, it will be interesting to see what happens to gold and silver during the last month of the ’summer doldrums’. Can the bullion banks flush more long positions from the tech funds? Are the 200 day moving averages a target? We will find out soon enough. One thing is for certain, if this isn’t the bottom…it’s not far off.

The Commitment of Traders report will be out later today and will form part of my commentary on Saturday.

In the ‘a picture paints a thousand words’ category…here is a graph of total U.S. debt as a percentage of GDP. Everyone should already be familiar with this graph in one form or another, but here’s another look.

click to enlarge

As usual, it was wall-to-wall bad news yesterday. Europe’s inflation rate accelerated at its fastest pace in 16 years, The Carlyle Group is closing another of its hedge funds after its value fell by one third. And Alan Greenspan says that home prices are “nowhere near the bottom” and the resulting market turmoil isn’t showing signs of abating. He went on to say that Fannie and Freddie were a “major accident waiting to happen” and had to be nationalized. Well…Sir Alan ought to know better than anyone, as he’s the one who created these problems in the first place.

In my first offering today, I noticed in a couple of stories out of the U.K. that the price of natural gas to consumers got hiked by 35% when the latest gas bills arrived in their mailboxes earlier this week. Then in a Bloomberg story yesterday, it was mentioned that home prices in the U.K. declined the most in two decades…8.1% year over year…and Britain’s retail sales index dropped to its lowest in 25 years in July.

And don’t forget my comment on Wednesday about beer sales being back to levels of the 1930s. Here is a piece by Adrian Ash of the bullionvault.com posted at Aaron Crowne’s web site ml-implode.com about the housing market crash in Britain. No wonder the Chancellor of the Exchequer (in a story I ran a couple of days ago) is extending a financial life-line to England’s banks. It’s my opinion that the entire western world’s housing market is on the slippery slope to total collapse. The article is entitled “UK Housing Bubble: Apocalypse Now?” and is linked here.

In a story out of the Financial Times in London early this morning, it appears that Russia plans to seize control of grain exports by forming a state grain trading company. And in another anti-free market move, Putin is at it again. This story is from Ambrose Evans-Pritchard at The Telegraph in London. The headline reads “Kremlin’s heavy hand triggers foreign exodus”. This story, like the UK housing bubble story, is well worth the read. The link is here.

Do not, therefore, under-estimate the potential threat to gold…which already carries the weight of the US government-directed gold cartel. – James Turk

Thursday was just another day in Fantasy Land in the equity markets. The bankruptcy sign went up in the USA the day that Nixon closed the gold window back in 1971. Now the whole world lives on a fiat currency system…and that won’t survive in its current form when the US$ finally loses its ‘reserve currency’ status. Got gold…and silver?

All of us at Casey’s Daily Resource Plus look forward to seeing you on Saturday. Have a great weekend.

Source: And Then There’s This Friday August 1, 2008