From Ed Steer:

Gold was range bound between $810 and $820 throughout most of Friday, with the bottom occurring just before London opened and the top coming at the close in London. As the usual N.Y. commentator said yesterday...this is the second day in a row that every attempt to break through $830 was thwarted. Silver's low was at the Comex open, and its high was also the London close...just like gold. Gold closed up a couple of bucks and silver was down less than dime. The HUI tacked on about 3.5%. Gold volume on Friday was around 89,500 contracts...net of switches.

Open interest in gold for Thursday showed an increase of 5,219 contracts...and for silver, o.i. rose approximately 650 contracts. The Commitment of Traders report was a big zero...virtually unchanged from the previous week...but still very bullish.

Here's a chart from chartoftheday.com that arrived in my inbox yesterday. It currently takes 10.5 ounces of gold to "buy the Dow." This is considerably less that the 44.8 ounces it took back in 1999. When priced in gold, the U.S. stock market has been in a bear market for the entire 21st century.

click to enlarge

I have a fair amount to talk about in gold, but I want to get the other news out of the way first. The stunning news yesterday was the arrest of former Nasdaq chairman Bernard Madoff for fraud...basically running a Ponzi scheme. One of the arresting FBI agents wrote that Madoff said he had "paid investors with money that wasn't there" and that he was broke and insolvent and had decided that "it could not go on" and that he expected to go to jail. He was turned in by his sons after confessing all to them. I note that GM didn't get bailed out...yet. But it will happen in one form or another sooner or later. A story out of the Financial Times in London said the following..."Germany's banking sector rescue has failed and should be modified urgently if lasting damage to the economy is to be avoided." (It's way too late for that already. - Ed)

I have four stories today...all gold and silver related. The first is piece is by investigative reporter Rob Mackinlay at investegate.co.uk. This well researched piece is entitled "Silver Investigation: CFTC does U-turn." The link is here.

The second essay is by James Turk as he weighs into the backwardation issue with this piece entitled "More on gold backwardation"...and the link is here.

The really interesting stories however, are the next two. Both are GATA dispatches, and I've included them in this format because of the preamble on each by Chris Powell, GATA's secretary treasurer, and senior editor at the Journal Enquirer in Manchester, Connecticut. The first is entitled "Former Fed governor hints at big upward revaluation of gold"...and the link is here.

The next piece is from Bill Murphy's MIDAS commentary over at lemetropolecafe.com yesterday. It will be interesting to see if there's any truth to this as the rest of December unfolds...and I'm providing it for information purposes only. I hope to have more detailed information on this next week. It's entitled "Comex said (to be) warning brokers about December gold squeeze"...and the link is here.

Today's 'blast from the past' goes back about 300 years to 1721...so to say it's "an oldie but goodie" is an understatement. This is Johann Sebastian Bach's Brandenburg Concerto No.3 in G major...1st movement, Allegro Moderato (bwv 1048). This is the first time I've ever seen a baroque bow in use. I've seen them in period prints on CD covers, but nowhere else...and I'm guessing here, but my bet is that most of those instruments would be period instruments. This is the Freiburg Baroque Orchestra...and they are fabulous. I don't think there is anyone alive who hasn't heard this piece, in one form or another, many times...so turn up your speakers, and then click here.

I must admit that today's commentary has been a super rush job, as our local Internet Service Provider has been off and on all night here in Edmonton...mostly off...and I've had to make do with five minutes here and there when it does come back on line, so I apologize profusely for the quality of this offering.

As I, and others have said over the last three or four months...the only way that this apparently terminal deflationary situation can be reversed is by a sudden and massive upwards revaluation of the gold price. For me...yesterday was the first day that I actually saw some flames...as most of what I'd seen before had just been smoke. We live in interesting times...and it appears that they may get more interesting in the days and weeks ahead. Stay tuned.

click to enlarge

Enjoy the rest of your weekend and I'll see you here on Tuesday.

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