From Ed Steer:

Both gold and silver hit their high prices of the day during early trading in the Far East on Monday morning. Then, starting about 1:00 p.m. in Hong Kong, both gold and silver began to head south...and by the time I hit the sack shortly after the London open, gold was down about $7 and silver was down about 40 cents. I had visions of a total blow-out when I woke up yesterday morning, but was pleasantly surprised to find the worst was already past. The lows for both gold and silver were at the London p.m. gold fix...10:00 a.m. in New York. After that, gold managed to gain about $5...and silver was steady into the end of Globex trading in New York at 5:15 p.m. on Monday afternoon.

Gold open interest changes in Friday's huge down day were not a surprise. Gold o.i. fell a steep 9,739 contracts to 391,960...on big volume of 168,554 contracts. Silver o.i. fell 3,483 contracts to 10,791....on big volume [switches] as well...47,997 contracts. Gold volume was decent on Monday as well...92,020 contracts...according to the usual N.Y. commentator.

He also had this interesting point...”The failure of the Bears to make any real progress during their normal prowling time...the Comex day session...raises the possibility that they may be stretched. [Were they even trying??? - Ed] Apparently the gold shares feel this way: the XAU actually finished up 0.27% on the day...having been down 3.4%; and the HUI closed down only 0.19%...having been down 3.5%. This is quite unusual action and encouraging to gold's friends.” [Yes it is...and bears watching. But the silver shares got hammered, so I'm not that encouraged. - Ed]

The Comex Delivery Report showed that 247 gold contracts were delivered on Monday...along with three contracts in silver. There are now about 2,240 gold contracts left to deliver in June...that's up about 50% since first-day notice at the end of May...a fairly large increase. I also note that, out of the blue, there are now suddenly another 211 silver contracts standing for June delivery. That's up from only a handful just last week. There have been 382 silver contracts delivered in June already...so it's been a pretty busy month in silver...considering that June is a non-delivery month for the metal. So it's a safe bet that there will be many more contracts added for delivery before the end of the month arrives. This could get interesting.

In other gold and silver news, there were no eagle updates over at the U.S. Mint's website...and no changes in GLD or SLV either. Over in Switzerland at the Zürcher Kantonalbank, there were some changes to their gold and silver stockpiles. Their big pile of gold bars got heavier by 24,979 ounces...and their mountain of silver added 570,966 ounces. At the Comex-approved warehouses, silver inventories climbed a smallish 261,184 ounces. I thank Carl Loeb for those numbers.

I have four stories today, and since I'm still in Vancouver at the gold show, I'll keep my preamble to each article to a minimum.

The first story is from Bloomberg. The headline reads..."Medvedev Questions Dollar as World Currency, Open to Yuan Swaps". Another brick in the wall for the U.S. dollar. The link is here.

In a Reuters story, the headline reads..."Top China banker calls for U.S. sales of yuan bonds" and the link is here.

Here's a good, but fairly long read from the New York Times...which I thank Craig McCarty for sending along. It's entitled "The Economy is Still at the Brink" and the link is here.


And lastly is another piece by Ambrose Evans-Pritchard from The Telegraph in London...which I 'borrowed' from the King Report. It's entitled "The depression quietly deepens"...and the link is here.

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All the perplexities, confusion and distress in America arise not from the defects in their constitution or confederation, not from want of honor or virtue, so much as from downright ignorance of the nature of coin, credit and circulation. - John Quincy Adams

So...what will today bring? Frankly, I don't have a clue. There was good liquidation of the tech fund longs in both metals on Friday...and more on Monday. But if the bullion banks are intent on cleaning out the speculative longs, the 50-day moving averages are still some distance away in both gold and silver. As was mentioned earlier, it didn't seem [at least to me] that 'da boyz' were around during the New York Comex session yesterday...or if they were, they weren't trying too hard. Today is the cut-off for Friday's Commitment of Traders, so it might get interesting.

See you on Wednesday morning.

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