For the most part, both gold and silver got sold off early in Thursday trading in the Far East and Europe. Silver showed a little spunk just before the Comex open, but that was it. However, the moment the Comex opened, gold was smacked for about $8…and silver was knocked down about 25 cents.

From there, it was off to the races until a not-for-profit seller showed up at 10:00 a.m. New York time to put an end to the festivities in both metals. Another attempt at a rally in gold a couple of hours later was also repelled, and gold finished flat on the day.

However, silver came roaring back and closed on its highs of the day. If that not-for-profit seller hadn’t shown up, there’s no telling how high the price would have gone. It’s my guess that this was a short covering rally, as any intelligent not-for-profit buyer would never buy like this. The shares did well yesterday. Let’s see if we get any follow-through today.

For Wednesday, gold open interest rose another 2,274 contracts, and silver went up another 219 contracts. That’s not a lot of volume, but it’s my guess that the bullion banks were (once again) going short against all the longs that were being put on.

I note that Dennis Gartman has decided to short the gold market. He set a stop at $883 and a target of $850. He also said that he would double his short position if gold went below $870…which it subsequently did on the Comex open yesterday. The 200-day m.a. for gold is within an eyelash of $850, but as of this writing, he’s less than $6 away from being stopped out. I await developments with great interest.

The first story today is actually a Bloomberg interview with Jimmy Rogers. Rogers, never one to suffer fools gladly, doesn’t pull his punches here. Amongst other things, he says that the bull market in oil “has years to go”. The link is here.

The second story was in US Banker a couple of days ago, but I didn’t have room for it. Now the story has shown up in the Financial Times in London. You’ll see the words “$5,000 billion” getting thrown around quite a bit. On this side of the Atlantic Ocean we call it $5 Trillion. Now we’re talking serious money. The story is entitled “US banks fear being forced to take $5,000bn back on balance sheets”…and it’s linked here.

His mother should have thrown him away and kept the stork. – Mae West

I see that mortgage delinquencies and foreclosures are at a 29-year high. The ECB is considering raising interest rates next month. Then there’s oil….up $5+ dollars yesterday. And the Dow finished up 213 points. Everything is fine…really!

Have a great weekend, and all of us at CDR+ will see you right here on Saturday.

Source: And Then There is This Friday, June 6, 2008