From Ed Steer:

Gold rose a bit in Far East trading and then began to slide once London opened for business. The slide ended at the London p.m. fix. From there it rose a hair and then didn't do much after that. Silver was similar. Basically it was a nothing day. There was no rally allowed to get out of hand on Tuesday...not like Monday's Comex opening! Tuesday's volume was once again on the light side...only 59,980 gold contracts were traded, with a switch effect of 3,930 contracts.

As far as open interest changes for Monday, I must admit that I wasn't expecting the numbers that were reported. I mentioned that volume in gold was very light...52,600 contracts...which is basically air. But despite that, gold o.i. was reported up a largish 2,757 contracts to 336,238. That's a lot of firepower to put out a $15 gold rally. Silver was even more off the charts. There, o.i. rose 1,956 contracts to 93,504. That's a lot! Ted Butler [plus the usual N.Y. gold commentator] was just as amazed as I was. He said that there may have been some spreads put on at the same time to disguise much smaller o.i. numbers. We won't know that until Friday's COT...if they include Tuesday's activity.

No gold was delivered on Tuesday according to the Comex Delivery Report. But eight contracts in silver changed hands. At the Comex-approved PM storage facilities, another 262,356 ounces were taken off the exchange. Over in Switzerland at Zürcher Kantonalbank, the new numbers for the ZKB ETFs have been updated. Last week another 112,676 ounces of gold were added...along with 185,549 ounces of silver. I thank Carl Loeb for providing that info. And, for the second day in a row, the U.S. mint has updated its mintings of both gold and silver eagles. In one ounce gold eagles, the total increased by another 5,000 to 73,500...and in silver eagles, another 82,500 were produced, bringing the monthly total to 1,293,000.

Today I have three stories...two of which are on very disparate subjects...but, in my opinion...more than worth investing your time in reading. Because, if true, they will affect all of us within the balance of our lifetimes. Along with those two stories is silver analyst Ted Butler's latest commentary.

A long time ago, back in the late1960s, I worked for NASA at the rocket range in Churchill, Manitoba. This was in an age when man's understanding of outer space was was virtually non-existent...and every rocket we fired was for pure research purposes only. In the forty years since then, I have always followed the space sciences closely...and particularly the goings-on of the nearest star...our sun. This essay is about the history our sun's sunspot cycle. The sun has gone very quiet as it transitions into Solar Cycle 24. If past history is any guide, this will likely have profound implications for life on earth. For the average reader, it gets a little technical at times, but other than that...it's a pretty lucid read. I urge you to spend some time on this pdf file entitled "Sunspot Minima: There are two paths ahead; each marked with a 'Danger' signpost". I thank John O'Reilly for sending it along...and the link is here.

The next story...a story about the world's water situation...appeared in the April edition of The Economist. The story itself is filed from Istanbul, Turkey. It's another article that I feel is worth your attention. It bears the title "Sin aqua non: Water shortages are a growing problem, but not for the reasons most people think." I thank P.S. for sending me the story...and the link is here.

And lastly is silver analyst Ted Butler's latest commentary. In this essay, Butler digs deeply into the last Commitment of Traders report and the April Bank Participation report...both which were issued last Friday...and which I discussed briefly in my Tuesday rant. Ted has more time and space than I do...and his knowledge in this area is vastly superior to mine. Needless to say, I feel that this is a 'must read'. The essay...which deals mainly with the hugely bullish silver situation...is entitled "A Nice Set Up"...and the link is here.

The depression has ended. - Dr. Julius Klein, Assistant Secretary of Commerce, 09 June 1931

Tuesday was a day like every other...people talking about a bottom being in sight. But I see that U.S. retail sales were down, and I noted in a Bloomberg story issued in the wee hours of this morning that UBS is going to lay off another 7,500 people....and Intel's CEO said his company still faces a "fragile economic environment." It sure doesn't sound like a bottom to me...and it isn't.

I hope your Wednesday goes well...and I'll see you tomorrow morning.

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