From Ed Steer:

The late Thursday afternoon rally in gold on the Comex didn't have much follow-through during Far East trading on Friday. However, activity picked up once London opened for business, and...with the exception of three attempted selloffs that failed...it was a solid up day through London, Comex floor trading, and the Globex electronic trading that followed. Silver's price pattern was the same as gold's. As I said yesterday, it was critical that both metals held support above their respective 50-day moving averages...and it's obvious that they did. Volume yesterday was around 112,000 contracts, net of switches. The gold 'point & figure' chart I posted on Thursday looks entirely different after Friday's rally...but we ain't out of the woods yet...as the updated P&F graph below clearly shows.

click to enlarge

Thursday's open interest changes in gold showed an increase of a very tiny 74 contracts. This brought gold's open interest up to 313,798. In silver, o.i. fell 665 contracts, reducing open interest to a smallish 85,480 contracts.

The new Commitment of Traders report came out yesterday. This time there was noticeable improvement in both silver and gold. In silver, the boyz reduced their net short position by 3,240 contracts...they went long 210 contracts and covered 3,030 short contracts. The Non-Commericals and Nonreportables obviously did the opposite...dumping longs and increasing their short positions.
In gold, the story was similar. The boyz improved their short position substantially by going long 4,667 contracts and covering 3,252 shorts, for a net improvement of 7,919 contracts. The other two categories more or less did the opposite. This was the improvement Ted and I were expecting last week, but didn't get. The link to the lastest COT is here.

In gold news, a story over at forbes.com says "The U.S. Mint said its gold and platinum numismatic coins will now be directly related to the average weekly London fix prices for the metals. The Mint said the pricing change was effective Jan. 12th." Mail & Guardian (Johannesburg)...the headline read "Widespread job losses expected in S.A. mining...Production output, particularly for gold and platinum, will continue to decline."

In the 'other news' category...the first five are Bloomberg stories...I see that G.E. is going to toss between 7,500 and 11,000 workers over the next little while. Hertz is about to send 4,000 of their employees into the unemployment lines. Bank of America got another $20 billion cash and $118 billion in new loan guarantees. Circuit City is now officially history after 60 years. And another hedge fund manager has disappeared...this one in Florida. Money is reported to be missing. Reuters (Washington) "U.S. December industrial production drops a bigger-than-expected 2%." Reuters "California Governor Arnold Schwarzenegger said on Thursday the state ‘faces insolvency within weeks...California is in a state of emergency’." Then yesterday, this story came out of the Los Angeles Times..."State Controller John Chiang announced today that his office would suspend tax refunds, welfare checks, student grants and other payments owed to Californians starting Feb. 1st, as a result of the state's cash crisis. Chiang said he had no choice but to stop making some $3.7 billion in payments in the absence of action by the governor and lawmakers to close the state's nearly $42-billion budget deficit. More than half of those payments are tax refunds." Bloomberg (Moscow) "Russian ruble falls most in 10 years this week after five devaluations" And lastly, at bbc.co.uk, the headline reads "Zimbabwe rolls out Z$100 TRILLION dollar note". [Buy gold!!! – Ed]

click to enlarge

Today's first item is by Mike Hewitt over at dollardaze.org. The title of his essay is "The Fate of Paper Money". It's a very interesting and educational article about the fate of paper money over the last 1,000 years or so, and the link is here.

Today's second story is another GATA release. A Federal Reserve Board document from 1961, contained in the archive of the board's late longtime chairman, William McChesney Martin Jr., shows the Fed planning to intervene surreptitiously in the currency and gold markets to support the dollar and to conceal, obscure, and falsify U.S. government records so that the intervention would not be discovered. The document seems to outline everything that GATA has complained about for years. GATA consultant James Turk, founder of GoldMoney and editor of the Freemarket Gold & Money Report, analyzes the document in "The Fed's Blueprint for Market Intervention"...and the link is here.

Our contemporary brand of socialism has one fatal flaw. It's too expensive. When you try to shower benefits on so many recipients, you eventually must resort to subterfuge. Foremost among those tricks is money and credit expansion. Inevitably, you debase your currency. - James Cook

Today's 'blast from the past' is from 1978. It was the group's only great hit, and the band faded into total obscurity after that. But what a beat it has...and what a hit it was...and the link is here.

Well, you have to be completely naive not to see that the Dow was 'saved' again yesterday...for the second day in a row. The banking index (KRX) came within an eyelash of hitting a new low as well. So...do we crash from here...or do we get an "Obama Bounce?" Who knows. I'll be ready for anything when the markets reopen on Tuesday after Martin Luther King Day.