Gold and silver didn’t do a lot in early Far East trading on Tuesday. The price for both metals bottomed very early in London…and from there a solid rally in both metals ensued…which ended shortly after the Comex opened for business…and that was it for the day.

The usual NY gold commentator had the following yesterday…”News reports indicate that Turkey imported 15 tonnes of gold in November. Considering that the Turkish currency has slumped by some 30% in the last couple of months, this is actually quite remarkable. Probably it reflects the volume of Turkish imports subsequently re-exported to countries to the south…Today’s ECB (European Central Bank) weekly statement of condition reports that ‘gold and gold receivables’ dropped E115 Mm, which ‘reflected’ gold sales by two captive CBs. At 5.7 tonnes, this is somewhat higher than of late (last week’s quantum was 2.83 tonnes), but is still small even compared to the 9.6 tonnes notionally possible if the WAG2 quota were to be sold evenly….In an interesting remark today The Gartman Letter notes the extreme despondency seen at a gold conference recently attended. This was pronounced enough for TGL to worry about the wisdom of being short.”

Black Monday’s open interest numbers for gold were as follows…o.i. was down another 4,949 contracts. Some of that was deliveries. Gold open interest is down more than 50% this year. And even though there were a bunch of deliveries in silver, o.i. actually rose 841 contracts. After the bushwhacking that silver took on Monday, it’s hard to believe that it wasn’t fresh shorting. However, we won’t know the answer to that until Friday when the next COT comes out. Incidentally, the close of Comex trading yesterday was the cut-off for Friday’s report.

In the bad news department, I see that GM and Ford (NYSE:F)sales in November were down 41% and 31% y/y respectively. The rest of the car makers, imports and all, had mostly similar numbers. Now the word is that GM (NYSE:GM) and Chrysler need $15 billion to survive until next month! In a Bloomberg story…”The Swiss National Bank is becoming the first central bank in Europe to learn what it’s like to live in a zero interest rate world.” And in another Bloomberg story, Troika Dialog, Russia’s oldest investment bank said that “Russia should abandon its defense of the ruble to kick-start economic growth by devaluing the currency 20%.” And in a story over at breitbart.com, “Federal Reserve chairman Ben Bernanke said Monday the current economic situation bears “no comparison” to the much deeper crisis of the 1930s Great Depression…so let’s put that out of our minds; there’s no comparison in terms of severity.” (Note to Ben: At the moment you could be right. But let’s see how things are when we hit bottom…which is years away. – Ed)

Three stories today. The first is from the Zimbabwe Times. The headline reads “$60,000,000,000,000,000,000,000 fraud!” This is what happens when you have hyperinflation. The link is here.

Today’s second feature is a piece from resourceinvestor.com. In it, Gene Arensberg comments that junior mining company insiders are buying their own company’s stock hand over fist on the Canadian Venture Exchange. That’s always an encouraging sign. The essay is entitled “Canadian Insiders Buying Despite Dismal CDNX”…and the link is here.

And lastly, but not least, is silver analyst Ted Butler’s latest offering. In this commentary, Butler says that the commitments of traders in the silver market has reached a bullish extreme not seen in years…apparently an effort by JP Morgan Chase (NYSE:JPM) to clear longs from the market. Butler’s commentary is headlined “COT Extremes” and the link is here.

The Dow managed to recover some of its big losses of Monday, but it obviously had the President’s Working Group helping it out. Shortly before 2:30 Eastern time, the Dow was about to head into negative territory…but gentle hands showed up three times in 90 minutes on the way to a 270 point ‘gain’. This is a market that wants to die, but the PPT won’t let it. One wonders how far it would fall if there was no one there to stop it.

See you tomorrow.

Source: And Then There’s This…Wednesday, December 3rd, 2008