From Ed Steer:

For at least the last two weeks, without exception, gold has been sold off the moment that Globex trading opened in the Far East. Thursday morning was no different. From there, gold and silver didn't do a thing until the usual 3:00 a.m. New York time, when a nice rally commenced in both metals. But if you note the Kitco gold chart carefully, there was some not-for-profit seller, selling this London rally every time it looked like it showed too much 'irrational exuberance' to the upside. This happened five times during London trading. Ditto for silver. The peak in gold came about half an hour after the Comex open. From there, it got sold off until around half-past lunchtime in New York. The subsequent rally into electronic trading didn't last long. And considering the size of the rally in the precious metals on Thursday, there sure wasn't huge volume in either.

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The only difference between the price action of the two metals yesterday, was that silver had its high of the day in Globex trading...after floor trading on the Comex closed. And despite the wonderful time that gold and silver prices had on Thursday, it also seemed that someone didn't want the HUI to blast through 300...as every attempt to break out, was firmly sold down. Note specifically that the 12:30 noon rally in the gold and silver price, produced exactly the opposite reaction in the shares for about half an hour. Maybe I'm imagining things...but maybe not. Here's the HUI from yesterday...and you can be the judge.

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In gold news yesterday, I noted a story posted at kitco.com, that gold/jewelery sales in Dubai were down 60%. Yesterday there was no change in the SLV ETF...but another 7.5 tonnes was added to the GLD ETF...which makes 23.5 tonnes in four days...about 750,000 troy ounces. That's getting awfully close to the figure of one million ounces that Ted Butler mentioned on Monday was owed to GLD. So, if Ted was right about that, then he's probably pretty close to mark on silver as well...where he figures that SLV is owed somewhere between 15-20 million ounces...of which only 2.5 million has showed up so far. And lastly...a couple of gold stories...the first, a story posted at mineweb.com, has this headline..."ETFs absorb more than $3 billion of gold so far this year." The link to this story is further down. The second, from the Financial Times in London, is a story about South Africa's gold production...and that item is linked below as well.

In other news...in a Bloomberg report yesterday "The Bank of England cut the benchmark interest rate to the lowest [now 1% - Ed] since the bank was founded in 1694 to help drag the British economy out of the deepening recession." [Note to Bloomberg: The British Prime Minister called it a 'depression' on Wednesday! - Ed] In a story headlined "The City fears Russia's default" filed out of Moscow at en.rian.ru, there is now deep concern in London that Russia will, once again, default on its foreign debts. Credit default swaps have blown out to rates higher than Iceland...1,123 basis points! That's junk!!! And I note in another Bloomberg story that the once almighty AIG had their shares trade at less than $1.00 for a time yesterday. And lastly, I see that Ron Paul has re-introduced, before the U.S. House of Representatives, the bill to abolish the Fed. He doesn't pull his punches. His accompanying speach is a quick read, and the link is here.

There are so many quality must read stories that are well worth your time today, that I'm just going to post the headline and the link to all of them. Then it's up to you, dear reader, to decide which to spend time on. I feel obligated to present everything to you, as I do not wish to misinform by censoring something that might be of great interest...or importance...to you personally. We are now rapidly accelerating down the path to Armageddon...and some of these stories reveal, in depth, just how fast events are moving along. I'm not sure how much longer 'the world as we know it' is going to last at this rate.

1) Mine Web - ETFs Absorb more than $3 Billion of Gold so far this year. Click here.
2) Bloomberg - Bank of England Cut Main Rate a Half Point to 1%. Click here.
3) The Telegraph - ECB delays on interest rates despite German industrial slump. Click here.
4) Bloomberg - Bill Gross of Pimco says "Trillions must be spent...not billions". Click here.
5) RIA Novosti - The City [London] fears Russia's Default. Click here.
6) Reuters - Geithner convenes meeting of President's Working Group...the PPT. Click here.
7) Financial Times - South Africa: A rich country insisting on being poor. Click here.

The fundamentals [Britain's] are still weak, and there is still some scope for orthodox policy easing. It’s preferable to nudge [interest] rates further now, than to turn to the printing presses. - Ross Walker, economist...Royal Bank of Scotland, Bloomberg, February 5, 2009

With Bloomberg reporting that the President's Working Group on Financial Markets was meeting yesterday, there was no way on God's green earth that anything bad was going to be allowed to happen. And as the King Report said earlier this a.m..."This is a blatant signal to the stock market, which is close to another breakdown, that the PPT stands ready, willing and able to rig the stock market if needed." The Dow had another miracle starting about 10:00 a.m....and gold and silver prices, and their respective equities...were kept in check. Any of the above posted stories should be screaming red flags...almost the same as front page ads in The Wall Street Journal...extolling the reasons why everyone should be buying gold and silver with both hands. Never in my wildest dreams could I have invented such positive gold and silver stories on my own.

Have a great weekend...and I'll see you on Saturday sometime.

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