Golden Minerals Company

From Ed Steer:

Gold did virtually nothing from the Globex open in New York on Tuesday evening...right through until the Comex open in New York on Wednesday morning. Then the selling pressure began in earnest. From the small vertical drops in price, it appeared that one or more not-for-profit sellers were pulling their bids...and each time they did...the price dropped vertically. These small waterfall declines are typical of the bullion banks. The bottom was in shortly before lunch in N.Y. From there the price rose slowly. Then at 2:15 the FOMC came forth with their two stone tablets and all hell broke loose. There was a gold price melt-up...as there were bids, but no ask...exactly the reverse of what happened earlier in the day. It made for a few exciting moments...and a great gold graph.

In silver, the selloff was much more pronounced...with the bids being pulled three distinct times...and a stair-step decline ensued, with the bottom at the close of floor trading on the Comex. As Ted Butler says, this is the metal that's at the center of the universe for the N.Y. bullion banks.

If I sound underwhelmed, it's because the price of both metals are only back to where they were a few days ago...if that. Yesterday was a flash in the pan. It's what happens from here on in that counts. Yesterday I said that I would be happy if the bullion banks would take both gold and silver below their respective 50-day moving average just to clean out the last of the tech longs. Well... they obliged me...big time! Now, from a technical point of view, the decks should be clear for a major rise in the price of both metals. It just remains to be seen how much opposition this rally will run into. Will the bullion banks [mostly JPMorgan] take the short side of every trade on the way back up...i.e. the 'same old, same old'...or will they let the metal run a bit before they step in? The price action and the Commitment of Traders report will tell all.

Tuesday's price action [such as it was] brought an increase in gold open interest of 1,147 contracts...and in silver, o.i. fell a smallish 201 contracts. And it nearly goes without saying that yesterday's open interest numbers will be something to behold when they're released shortly after twelve noon New York time today.

In other precious metals news, another 66 contracts in gold were delivered yesterday...with Prudential Bache being the biggest issuer and the Bank of Nova Scotia being the biggest stopper. In silver, 107 contracts were delivered. The Bank of Nova Scotia was the issuer [107] and JPMorgan [84] and Goldman Sachs [18] were the biggest stoppers. Silver inventories at the Comex-approved warehouses declined 106,180 ounces. The U.S. Mint finally updated its silver and gold eagles tally. One ounce gold eagle mintings are up 11,500 to 67,000 for the month, and silver eagles took a huge jump...up 650,000 to 1,725,000 for March so far. The precious metal ETFs also showed activity, with GLD up another 490,000 ounces and the SLV added a healthy 3.3 million ounces...with probably more to come in both.

The big news yesterday was the announcement after the FOMC meeting. My first story today is about that very thing. It was filed over at yahoo.com...and the headline says it all..."Fed Launches Bold $1.2 Trillion Effort to Revive Economy"..."the Fed will spend up to $300 billion to buy long-term government bonds and an additional $750 billion in mortgage-backed securities guaranteed by Fannie Mae and Freddie Mac." At least the reporter is honest when she says "Where does the Fed get all the money? It prints it." [This is called legalized counterfeiting. - Ed] The link is here.

The second article is a GATA press release entitled "With all that thin-air money, gold alone needs to be sold". The introductory commentary to this Financial Times story, by GATA's Chris Powell, is worth the read as well. The link is here.

If you don't think we're in la-la-land yet...try this story posted at foxnews.com. The headline reads "FDIC Criticizes Massachusetts Bank With No Bad Loans for Being too Cautious". Yep, there are such things as solvent, well-run banks...and this is the thanks they get. I thank Craig McCarty for the story...and the link is here.

As if the silver market wasn't tight as a drum already...here's a piece that Ted Butler sent me that adds more fuel to the fire. It was posted at hedgemedia.com and is entitled "Silver poised to outperform gold". "The Hennesse Group, an adviser to hedge fund investors, believes silver is currently under-priced relative to gold and is therefore advising clients to accumulate positions in the precious metal." The link is here.

And lastly, here is a half-hour interview with Jim Rogers. Like our own Doug Casey...Rogers is never one to mince words...nor suffer fools gladly. He certainly is in fine form for this interview, which I urge everyone to take the time to watch. I thank John Bilo, one of my daily readers, for sending this to me...and now to you. The link is here.


Men are so simple and so much inclined to obey immediate needs, that a deceiver will never lack victims for his deceptions. - Machiavelli

I remember the day that President John Kennedy was shot. It was a warm late-fall day in Glenboro, Manitoba...and I was playing basketball outside at recess. Yesterday was another day that will probably live "in infamy" as well. It was Ben Bernanke's "Inflate...or die!" moment. How far are we away from hyperinflation? Good question. But all of us at Casey Research are talking about little else. We'll keep you posted.

Enjoy your Thursday...and I'll see you right here at the same time tomorrow.

Casey Research correspondent-at-large Ed Steer is a keen observer of the financial scene and a board member of GATA.org.