From Ed Steer:

Both gold and silver rose from the get-go as soon as Globex trading began in the Far East on Wednesday morning. Both metals got sold off slightly on the London open, rose...then got sold off after the Hong Kong close. Gold sold off until about an hour before the Comex open...and silver bottomed an hour after the Comex opened. From these bottoms, they both rose in fits and starts right into the close of regular trading on the Comex. In after-hours, both metals flat-lined, and are rising gently into Far East trading this morning as I write this.

Tuesday's open interest data (the bottom?) was as follows. Gold o.i. fell 7,988 contracts. And silver...for the seventh straight day...showed an o.i. increase again. This time o.i. was up 1,340 contracts! I cannot overemphasize how unbelievable this is, as what you're seeing is unprecedented....and nothing like I've ever seen before! The silver price has plunged about $4.80 since its July 15th high and we are showing silver open interest increasing to within 10,000 contracts of its all-time high!!!

As I've said before, the only way this can happen (without involving spreads) is that the bullion banks are increasing their long positions faster than they're covering their shorts, or the tech funds are going short faster than they are pitching their long positions...or both are happening at the same time. My hat is off to these crooks for hiding their movements in silver without anyone being able to see what's going on behind the scenes. The Commitment of Traders report tomorrow is the most important one that's come out since I've been following it. Will it tell all? As I said yesterday...don't count on it...as the boyz will keep this secret from the light of day as long as they possibly can.

In international news, I see in a story in the Financial Times in London that Russia has made it clear that despite a ceasefire agreement with Georgia, it will do whatever it pleases in the defeated country. And there are lots of stories out there from every corner of the world saying how "Russia's new-found imperialism" should be stopped. Hey...what happened to American imperialism? Did it just disappear? And lastly, debka.com further updated news about the three major US naval strike forces due in the Persian Gulf this week...along with forces from France, Britain and (gulp!) Canada. Is a naval blockade (or worse) in the cards for Iran?

Today's first story is a rather innocuous one involving a border settlement issue between Russia and China...one that had been festering for well over 100 years. It shows just how much relations have been improved between these two countries. The story from Yahoo is entitled "China, Russia sign border agreement". The link is here.

The second story is one of great interest from Ambrose Evans-Pritchard from The Telegraph in London. This is his first story on gold that I can remember. I hope he has more like it. The article...which is well worth the read...is headlined "Stage two of the gold bull market is just beginning" and is linked here.

The US Treasury has seen its debt limit increased by US$1.65 Trillion since September 27, 2007. That's ten MONTHS ago. It took the US government just under two CENTURIES (1787-1984) to increase its funded debt to a TOTAL of US$1.65 Trillion. Now they have given themselves permission to borrow that amount in less than ONE YEAR. - Bill Buckler, the-privateer.com

There's a good chance that the worst is behind us and the bottom is in. However, I still have one eye on options expiry on August 26th. With both gold and silver prices below all their significant moving averages, the '8 or less' traders...the bullion banks...are still in full control of this market. However, it was a relief to see both metals climbing steadily off their respective bottoms yesterday. I hope we don't have to wait that long before the situation resolves itself totally to the upside, but I'm still on the lookout for "in your ear".

See you on Friday.

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