From Ed Steer:

When I filed yesterday's rant in the wee hours of Thursday morning, it was already obvious that gold was under extreme pressure in the Far East. When I woke up yesterday morning, the carnage was already history. As the usual N.Y. commentator said..."Despite of [or possibly provoked by] the spectacular performance of the gold shares on Wednesday, world gold has been under heavy pressure since the TOCOM close at 2:30 a.m. N.Y. time on Thursday. Estimated Comex volume at noon was a heavy 131,921 lots." By the time U.K. ministers began to give interviews speaking of IMF gold sales in excess of what was previously envisaged, world gold was already down some $15 from the high. A further notable slump occurred not at the Comex open as usual, but at the NYSE open. Net volume was therefore almost double yesterday's: and 44.5% of the total trade before 9 a.m.

"A visitor from Mars might think it odd that gold should take such a beating on a day when raucous trumpeting of the G-20 reflation/inflation package sent commodity and equity markets soaring [oil up 8.8%...and the US$ down 1.19%]. More experienced observers, however, will recognize the pattern...if perhaps not professionally free to do so in public.

“Seeing Ministers from the U.K. jaw-boning for the bears, reminds one that the current U.K. Prime Minister, Gordon Brown, as Chancellor of the Exchequer, engineered the financially foolish U.K. gold sales in early 1999...just as gold was developing a favourable technical pattern.”

While this was not what I had in mind when I suggested last night the gold share action implied gold would be worth getting up for this morning, it has to be admitted that large technically important gold share index moves still means that there is, as Richard Russell said on Wednesday night... “something going on with gold.” Yesterday, after the smash down, Richard Russell had this to say... “As the sheer amount of Federal Reserve Notes multiples, gold should normally rise. Yet, someone [or some group] is putting pressure on gold.” Hmmm, come to think of it, the last thing the Fed wants is surging gold, a signal to the world that the dollar is being devalued. Ah, the things that go on behind our backs. The gold graph tells all.

click to enlarge

Silver was a big surprise...as it's been all week. Despite being down big almost every day...it has always bounced back by the end of Comex trading. It would have probably finished in positive territory [like platinum and palladium did] if it hadn't been stopped in its tracks once electronic trading began. And to see silver come back from three amazingly similar Comex sell-offs and then close three days running within a ten cent price band...just reeks to high heaven of price management.

click to enlarge

Open interest for Wednesday's trading activity in both gold and silver is as follows....gold o.i. fell 3,534 contracts to 365,084, of which roughly 1,400 were deliveries. Silver o.i. fell a respectable 933 contracts to 93,573. Trading volume wasn't overly heavy in either metal that day. One would think that [after the deliberate take-down in the price of both gold and silver yesterday] we should see fairly substantial declines in open interest when the numbers become available later this morning.

I want to remind you of what I said on Saturday about Friday's Commitment of Traders report. I said that it was bullish for silver and bearish for gold. Since then, I'd say that it's even more bullish for silver and somewhat less bearish for gold. No doubt there was some reasonably serious spec long liquidation yesterday, as we made new lows [on big volume] for this move in both silver and gold. Ted Butler mentioned to me that if the bullion banks wish to, they can still take gold down below its 200-day moving average, as they could easily force the speculators to puke up some 80,000 long contracts. Neither of us want to think seriously about that possibility...but if it does come to pass, then you'll know why it happened, how it happened...and who did it. The new COT report will be out at 3:30 Eastern time today.

In other gold and silver news, there were only 206 contracts delivered in gold yesterday...and nothing in silver. Nothing was added to either GLD or SLV as far as I could tell. And over at the U.S. Mint, I see that the month has started off rather modestly with 2,500 gold eagles minted and 43,000 silver eagles. After the torrid pace of the first three months of this year, I would not be entirely surprised if mintings dropped off a bit in April. Over at the Comex-authorized gold and silver warehouses, I see that silver stocks took another large drop on Thursday...this time by 2,150,049 ounces. Between yesterday and Wednesday, almost four million ounces of silver has been shipped out of the Comex. Comex silver inventories are now at their lowest level in a couple of years.

Four stories today. The first is from Reuters and filed from London. The headline reads "G-20 discussing additional gold sales". This story was filed long after gold began its decline in Far East and European trading...but at the precise moment when the gold price got the rug pulled out from under it in Comex trading in New York...about 8:19 a.m...1:19 p.m. in London. The link is here.

In a related story filed at marketwatch.com, an analyst at Morgan Stanley said that he expects the IMF to implement the sales over the next few years, "but does not believe that this presents a strong negative risk to gold prices - as it will be 'orderly' and maybe even off market." The headline reads "G20 supports IMF's plan to sell 403 tons of gold" and the link is here.

In an article posted over at nakedcapitalism.com is this piece entitled "FHLB Chairman Disgusted With FASB Accounting Alchemy, Quits". The author, Tyler Durden, publisher of Zero Hedge...rightfully says "'Now the question for taxpayers is this: If Charles Bowsher [Chairman of the Federal Home Loan Bank System] can't get comfortable with these banks' financial statements, why should anybody else be?' Why indeed? The link is here.

In an op-ed piece in the New York Times on March 31st, comes this offering by Nobel prize winner, Joseph Stiglitz. He trashes the Obama adminstration's $500 billion dollar proposal for dealing with America's ailing banks, calling it a "win-win-lose" proposal. Stiglitz goes on to say that "we are already suffering from a crisis of confidence...confidence will be eroded further. At that point the task of recreating a vibrant financial sector, and resuscitating the economy, will be even harder." The piece is entitled "Obama's Ersatz Capitalism" and I thank Craig McCarty for sending it to me. The link is here.

There will be no interruption of our permanent prosperity. - Myron Forbes, President, Pierce Arrow Motor Car Co., January 12, 1928

click to enlarge

So....what's really changed with the G20 meeting? Nothing, that's what. Just more fiat out of thin air. Besides the financial system's current litany of woes...there are still many more economic and financial shoes left to drop...credit cards, personal loans, lines of credit...and the big one...commercial real estate. The gold standard got yanked off life support in 1971. Since then we've had the biggest fiat currency bubble and debt party in world history. The beginning of the end was in July 2007...36 years later. You don't unwind a bubble this massive in just a couple of years. It will take a decade...or longer...probably much longer. And as I said before, I'll be a very old man before this bear market...and its associated "greater depression"...breaths its last. By then, precious metals will be the only game in town.

All of us at Casey's Daily Resource Plus hope you have a good weekend...and we'll see you right here on Saturday.

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