From Ed Steer:

The moment that Globex trading opened for business on Monday in the Far East, both gold and silver took off like a NASA space launch...but gold, as per usual lately...was not allowed to punch much above $750. This continued until the Comex opened in New York, when both metals once again blasted off to the upside. The bad guys showed up within half an hour and had gold safely back under $750 by the London close. Both of these rallies smell of panic short covering to me. Heaven only knows how high the price would have gone if that certain US bullion bank hadn't shown up when it did.

However, the HUI...although not closing on its highs....put in a respectable performance nevertheless.

Open interest for Friday was reported as follows yesterday...gold o.i. fell 6,835 contracts, which is another good sized chunk, especially at this point...and silver o.i. rose 1,308 contracts.

Options expiry for December delivery is now nine days away...November 20th on the Comex. As you are probably aware, December is a huge delivery month for both gold and silver, and there will be lots of roll-overs and switches between now and options expiry. I would suspect (and would be happy to be proven wrong) that the boyz will keep gold and silver price in check until then...and maybe even up until first day notice...which is November 30th. It seems like we're always waiting for some event to occur before the coast looks clear. The COT says the time is now! We'll see.

In silver news, here's something from John Reade over at UBS yesterday. "We have noted recently that Indian demand of good delivery silver from European banks has increased sharply and have wondered why this was the case. We have not seen much in the way of Indian demand for silver for about five years and had heard from the trade that India was sourcing its silver from China via the export of non-good delivery bars. One client in New York suggested to me that China had turned a net importer and (today's) Bloomberg story appears to support this, although we are having difficulties reconciling the numbers. [I've seen these numbers, and I agree with John – Ed]. If China has turned a net importer of silver after years of heavy exports - perhaps due to lower zinc smelter production and as a consequence of export taxes on silver - then the silver market may see yet another change. Over the past decade the sharpest changes in commodity price performance have been seen when China turns from net exporter to importer, or vice versa. This move may lead to silver outperforming gold over the next few months, reversing a period of dreadful relative performance and could see the gold:silver ratio down to 60 from recent levels above 83."

The news on Monday was horrific as usual...another $40 billion for AIG...and in a Bloomberg story, the "Federal Reserve is refusing to identify the recipients of almost $2 Trillion of emergency loans from American taxpayers...or the troubled assets the central bank is accepting as collateral." Things are not great over at Goldman Sachs either...as their share price action looks terminal. Fannie lost $29 billion in the last quarter. Ten days ago, Circuit City announced the closing of 155 stores...yesterday they announced Chapter 11. And in another Bloomberg story, "On Sunday, China approved a massive stimulus plan worth nearly $600 billion through 2010 to boost domestic demand as part of a global push for measures to soften an expected recession in many countries." If China's going to be spending all this money (their huge stash of foreign reserves), where are they going to get the funds to buy their share of the $2 Trillion in US Treasuries coming down the pipe? Just asking.

Today's first story is from mineweb.com. It appears that Oz Minerals is considering "a full or partial closure of its Century zinc mine in Australia"...the world's second largest. I wonder how much by-product silver (and other minerals) will disappear if they do close? The story is entitled "World No. 2 zinc miner reviews operations as metal prices fall" and the link is here.

My second offering today is the latest from silver analyst Ted Butler. It's attached as a GATA dispatch, as I feel that Chris Powell's preamble is worth the read as well. The essay is entitled "The Real Story" and the link is here.

They shall grow not old, as we that are left grow old:
Age shall not weary them, nor the years condemn.
At the going down of the sun and in the morning
We will remember them.

For the Fallen - Laurence Binyon (1869 - 1943)

As you can see, I have a report today. The only reason for that is because I can't read an itinerary. My plane apparently leaves this morning...not yesterday morning! So don't hold your breath for anything on Wednesday.

See you tomorrow...maybe. Thursday for sure!

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