From Ed Steer:

The tiny double bottom that occurred shortly after the close of Comex trading on Wednesday afternoon may have been the low in gold for this move. Both were ever so slightly below $900. From there, gold rose gradually until about an hour after the London a.m. gold fix on Thursday morning. Then it declined gently until shortly after the London p.m. fix was in. From there, away it went...until a not-for-profit seller showed up in after-hours Globex trading in New York and capped the little price spike that occurred at 3:30 p.m. New York time.

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Silver's antics were the same as gold's, although the price action was more exaggerated. Silver began to rise once the London a.m. gold fix was in...then declined until shortly after the London p.m. fix...and then, it too, was off to the upside, following the gold price in lock step. Both silver and gold bottomed at identical times...10:15 a.m. in New York...which, in fact, could have been a slightly later-than-normal London p.m. gold fix [which normally occurs at 3:00 p.m. London time...10:00 a.m. in New York]. The time of the 'fix' can vary around those times...depending on what's happening in the market...the same with the London a.m. gold fix. It's not 100% cast in stone.

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The changes in open interest for Wednesday's activity in gold and silver did not impress me much. Gold o.i. actually rose another 957 contracts to 366,228. In silver, open interest fell another 484 contracts to 92,567. The Commitment of Traders report [for positions held at the end of New York trading on Tuesday] will be out at 1:30 Eastern time today, and I'll report on it in my rant on Saturday. Ted is expecting a big improvement in silver and a smallish improvement in gold. The gold deliveries continue on the Comex...even though it's not a delivery month for gold. Yesterday, 109 contracts were delivered. The big issuer was Prudential Bache [100 contracts]...and the biggest stoppers were JPMorgan [65] and Fortis Clearing [26]. In silver, there wasn't much delivered...only 83 contracts in total, as delivery is almost complete. The two issuers were Merrill Lynch [61] and Goldman Sachs [22]. The biggest stoppers were JPMorgan [36] and Goldman Sachs [33]. Comex warehouse silver stock changes yesterday were immaterial. There was no change in the GLD and SLV was down 2.7 million ounces to 253.9 million ounces. Ted Butler had this to say about the decline in SLV over the last couple of days..."My sense is that this last 5 million oz. draw-down was not true liquidation, but intentional withdrawals being made under the cover of share liquidation. Can't prove it, but that's what it smells like."

In the first paragraph above, I used the word 'may' when I referred to the possible double bottom in gold on Wednesday afternoon. Neither Ted nor myself can figure out why JPMorgan and HSBC USA et al didn't go for jugular when they had the chance. They could have easily hit gold for another $25 to $30…and silver for a buck...and blasted through the 50-day moving averages for both metals and cleaned out all the tech longs still sitting there...but they didn't. Or couldn't. I suppose it's possible that gold and silver may have had a 'false' breakout yesterday...the boyz teeing us up before driving us down the fairway next week during the U.S. Treasury's auction. Maybe [as I've said a couple of times before] I'm looking for black bears in dark rooms that aren't there. We'll find out soon enough.

But having said all that, Thursday was just an excellent day from one end to the other. The shares were on fire. And of note is what happened to Central Gold Trust [a smaller, Canadian-based gold-only, version of Central Fund of Canada]. It's shares closed at a 33% premium to spot...in both Can$ and US$!!! Someone wanted to be positioned in gold badly...and in a hurry. You'd almost think that they were expecting gold to rise by 30% almost immediately. My answer to that is...bring it on!

In other news...The Telegraph..."ECB cuts rates to record 1.5%, mulls radical action". ["Radical action" means monetizing debt...printing money...or 'quantitative easing' in today's vernacular. Germany will not be amused. - Ed] In a Financial Times story out of London, I see that "Lehman Brothers’ U.S. liquidators have asked Barclays to explain what happened to an estimated $3.3 billion earmarked for bonuses and other liabilities that the UK bank received when it acquired part of the bankrupt Wall Street company last year." This request by the liquidators, "underlines the tension between the company’s creditors and Barclays, which acquired the North American arms of the investment bank for $1.5bn after it filed for bankruptcy in September." And from dominionpaper.ca [filed at Kitco] came this tidbit about the 'Darth Vader' of gold companies..."Norway's Ministry of Finance announced on January 30th that it would exclude mining giant Barrick Gold from the country's pension fund for ethical reasons." The link is here. [All of us at GATA can think of a lot of other reasons why we wouldn't own shares in this company. - Ed] I see Moody's may cut Wells Fargo, JPM outlook to negative. [How about junk...because that's where they're going to end up...probably sooner rather than later. - Ed] JPMorgan closed down 14% yesterday to $16.60. Soon it will be under $1.00...just like Citigroup was for a time yesterday. I see that GM "says there is substantial doubt about its ability as a going concern." [Hey...I've taken advanced management accounting, and they haven't been a 'going concern' for quite a while. - Ed] In a Bloomberg story I note that Blackstone Group LP wrote down to zero the value of billions of dollars of [LBO] debt it bought last year from Deutsche Bank AG.

I, like most others, are exhausted by the continuous stream of ugly news and developments. I have a ton of stories that I could run...but have narrowed it down to 'only' four. The first is from cnn.com and is headlined "U.S. Lawmakers Clash with Fed over AIG Rescue Strategy" The lawmakers want to know the names of the counterparties that AIG is giving its bail-out money to...and the Fed won't say. Sen. Bob Corker, R-Tenn., was blunt in his assessment of the windfall to AIG counterparties: "They've made out like bandits." The link is here.

Things got interesting on Jon Stewart's The Daily Show a couple of days back, when Rick Santelli was slated to appear to discuss the "riot" he incited last week on the floor of the CME. Unfortunately, Rick chose to "bail" on the interview, which did not please Jon Stewart one bit. So Jon ripped Santelli [and CNBS] a new one. It is shockingly blunt...and a virtual criminal indictment of the company. This 'R' rated video clip is about ten minutes long and is an absolute must view. I thank Ted Butler for sending it along. U.S. [and all other viewers] click here...and for copyright reasons, us Canadian viewers have to click here.

Yesterday I mentioned that Credit Default Swaps on GE bonds were at bankruptcy levels. Well, here's someone that knows far more about that that I do. This guy [Karl Denninger] is talking Armaggedon! His article is entitled "More GE (Important)". As a matter of fact, his commentary below that..."What's Dead (Short Answer: All Of It)" is worth the read as well. The link is here.

And today's last article is from Sprott Asset Management in Toronto. In their new essay, "As Safe as Gold," Eric Sprott and Sasha Solunac make the case for the premier precious metal, and they're careful to distinguish between real metal and exchange-traded-fund metal. Basically, they wouldn't touch the GLD ETF with a ten-foot cattle prod...and as you know...neither would I. That goes for the SLV, too. "Why take the risk?...Don't settle for a paper asset -- a second-rate knock-off. In this environment, counterparty risk lurks around every corner. Buy the real thing: GOLD, not GLD." The link to the entire essay is here.

The past seventy-five years have seen the growth of government from a relatively small entity charged with defending the borders, adjudicating disputes, and delivering the mail, to a bloated nightmare creature whose tentacles reach into every corner of our existence. - Doug Hornig, Casey Research

I see in an article filed at forbes.com that Nouriel Roubini has stated that..."in simple words, the U.S. financial system is effectively insolvent." Here are some more simple words...the rest of the world's financial system is 'effectively insolvent' as well. I see that GE closed the trading day at $6.66 yesterday. Is that an omen or what? But there's still time to buy more physical gold and silver before the whole system crashes and burns...but not too much.

On that cheerful note...enjoy your weekend...and I'll see you here on Saturday.