In Far East trading, both gold and silver got sold off…starting at the Hong Kong open. However, the bottom was in the moment that London traders showed up for the day. But the real fireworks didn’t start until the New York traders joined the party…then both metals staged huge rallies. This was, of course, on the back of the US$/oil news.

There was more volume on the Comex on Wednesday than there had been in a while, but still nothing major. It’s interesting to note that the price rallies in both metals appeared to have been capped before the 50-day and 20-day moving averages were violated to the up-side. As I mentioned earlier this week, these are the magic moving averages that the tech funds like to use as long-side buy signals.

We also had a key reversal day to the up-side in both metals. The boys have never allowed this technical indicator to stand….squashing the price of both metals during the following trading session. Let’s see if that happens again this time. If it doesn’t, and prices continue to rise, then the tech funds will certainly show up…and the trading day could get real interesting.

As far as Tuesday’s open interest numbers, gold was up a scant 534 contracts and silver o.i. fell 761 contracts…both on very low volume. With more activity on yesterday’s strong rise in both metals, it’s pretty much a given that both o.i. numbers for Wednesday will be positive…and much larger. I’m sure there was a tech fund or two on the prowl yesterday as well.

A couple of stories today. During the last week, rice has been in the news a lot, and I have a bunch of them in my in-box. Seems like the price of rice have been climbing quite a bit…to the point where riots and strikes are breaking out in some third-world countries. Governments are becoming concerned…and some are taking action. Here’s a story out of London’s Financial Times entitled “Rice jumps as Africa joins race for supplies.” Click here.

The main feature is commentary from Michael Kosares over at usagold.com. MK puts a very positive spin on gold’s future. I’m sure his comments would encompass silver was well. The essay is entitled “Golden Gut Check” and it’s linked here.

Today should be another interesting day. Equities should continue to levitate. Now that the PPT is stalking the land, it’s hard to know what’s real and not real, as they’ve done everything in their power to thwart the pricing mechanism of our supposedly free markets. But they can’t do it forever.