In the closing paragraph of my comments yesterday, I said this about options expiry…”Will the U.S. bullion banks pull the pin…or will nothing much happen? Nobody knows…but we’ll find out soon enough.” I wrote that in the wee hours of Tuesday morning…not knowing that six hours later the bullion banks would do exactly that. It was ugly…and oh, so obvious. As I’ve said countless times before…no profit-maximizing seller ever sells like this…ever!!!

As per normal, every little rally attempt in early Far East trading in Sydney got firmly sold off…and by the time that London opened for business on Monday morning, gold was down about $12.

Both gold and silver had short, sharp rallies once Globex trading began in Sydney on Friday morning. Both were sold off immediately.

Friday morning trading in gold in the Far East started like every day over there lately…heading lower.

It came as no surprise to me that both gold got sold off a bit the moment that the gold market opened in the Far East on Monday morning. But it didn’t amount to much, because shortly after 2 p.m. in Hong Kong…1:00 a.m. Monday morning N.Y. time…gold began a slow rise that continued right through the London open. This lasted until the silver fix in London (noon) before selling off about ten bucks. But as soon as floor trading opened on the Comex in New York, the price rose…then spiked to its high of the day…before it was gently capped and then got slowly sold off until the end of Globex trading at 5:15 p.m. Eastern time.

In the currency market, the dollar inched higher against the euro. Late Wednesday, the euro was trading at $1.3176 vs. $1.3187 on Tuesday.

On Tuesday, both gold and silver started to decline at one of their usual times…about 3:00 a.m. New York time on Tuesday morning…with the bottom coming at the close of London trading. The price managed to recover somewhat after that…but once again (at 3:00 a.m. New York time on Wednesday morning) gold and silver prices began to decline. There was a temporary bottom at the London close again yesterday, but the recovery was short-lived, and both metals were taken down right into the close of after-hours trading on the Globex.

I assume that bond buyers are all drug addicts who are not aware of what they are doing, morons who are not aware of what they are doing, or grubby slicksters who are buying them on behalf of drug addicts and morons! Hahaha!

Sara Nunnally says Middle Eastern states are using their petro-dollar Sovereign Wealth Funds to boost their international profile and reduce dependence on oil. She says “following the money” is a good way for investors to profit from this shift in global economic and financial power.

Unprecendented government action is beginning to thaw credit markets. Commercial paper is being traded again. But this credit crisis is far from over, says William Patalon III. The trickle of finance will only reach top-grade companies. The weak will either go bankrupt or be swallowed up by their healthier rivals.