From Ed Steer:

The gold price was so quiet on Monday morning in Far East trading that I smacked the side of my computer screen to see if I could get the price to move...but, alas, it did not.

This situation existed until well into early morning trading in London. Then, moments before Hong Kong closed, and at the London a.m. gold fix...someone decided that "hey, the US$ is screaming to the upside and we better do something about the gold price." In just a few minutes, gold responded with an abrupt drop of eight bucks. Then, in the face of a continuing rising US$, gold had the audacity to gain back two dollars over the next couple of hours during London trading. But fifteen minutes before the Comex opened in New York...along came another not-for-profit seller...and gold was down another eight bucks to its lows of the day. From there, it gained back almost four dollars of that. The blue and red traces tell all.

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You just knew it was going to be a bad day for silver by the way it got trashed in New York on Sunday night...while the gold price was just about ruler flat. Anyway, by the time that trading was done on the Comex in New York about 19 hours later...silver was down 49 cents.

Monday's [and this year's] gold price action [and the media comments about it] were nicely summed up by Bill Murphy over at lemetropolecafe.com yesterday. Here's what he had to say..."Today, [the press] are all reporting again that ‘gold is down on strong dollar’, even though from the time gold hit $990 two weeks ago the dollar has done nothing more than rise from 79.5 to 80.5, a whopping 1% change compared to the $70 decline in gold and $2.50 drop in silver thanks to massive COMEX shorting. Apparently, the deflation scapegoat is back in fashion for describing gold's decline.

"Even more comical is realizing that when gold hit $1,007 in February, just four months ago, the dollar was 87.5, or seven points HIGHER than today, and the Dow was 7,200, or 1,500 points LOWER than today. Back then, 10-year Treasury yields were below 3%, compared to closer to 3.75% today, and ‘Dr. Copper’ was $1.50 compared to $2.20 today! Thus, that gold SURGE clearly coincided with real ‘deflation fears’, as opposed to today when the press reports that gold is now plunging due to ‘deflation fears.’

"Not only that, when gold hit $1,030 in March 2008, the dollar was 77, or three points LOWER than today, while the Dow was 12,500, or 4,000 points higher today."

If you're confused...you shouldn't be. The gold price is not joined at the hip with the US$ or the Dow...it goes up or down depending on who is long or short on the Comex...nothing else. Did the gold or silver price go down because of the US$ on Monday? No it didn't. It [and silver] only declined because the price was engineered lower. Does the gold chart above look like normal market action...moving with the US$ tick for tick...or does it look like someone's dicking with it? You have to be deaf, dumb, blind and/or stupid not to recognize price management staring you in the face yesterday.”

Changes in open interest for Friday's trading made no sense to either Ted Butler or myself. Gold open interest fell 3,372 contracts to 373,641...on volume of 64,694 contracts. Silver o.i. went the other way...up a whopping 3,640 contracts to 111,380...on volume of 32,130 contracts. Ted said [and I totally agreed] that this big o.i. increase in silver must have been spread related. Monday's trading activity in gold wasn't very busy either...about 87,800 contracts...a quiet day. Friday was quiet as well [64,694]...so it must be the summer doldrums setting in.

In other gold news, I note [with some surprise] that the Comex Delivery Report stated that there were no deliveries in either gold or silver yesterday. That's the first time that's happened since I've started reporting these numbers. There were no changes over at SLV...and GLD holdings slipped a very minor 29,260 ounces. And over in Switzerland at Zürcher Kantonalbank, I see that their gold ETF reported a tiny increase of 1,534 ounces...while their silver ETF added a more respectable 176,273 ounces. I thank Carl Loeb for those numbers. The U.S. Mint was kind enough to update their eagle production numbers yesterday. Since they reported last week, they have minted another 15,000 one ounce gold eagles...bringing June production up to 93,000. In silver eagles, they minted another 325,000...now up to 1,770,000 for the month. And over at the Comex-approved warehouses...another 262,325 ounces of silver were withdrawn.

I see [courtesy of Bill Buckler over at the-privateer.com] that there's another story about these gold vending machines being installed in Germany. This story is from the timesonline.co.uk...and bears the headline "Germans flock to gold bars vending machine at Frankfurt airport". The link is here.

While the stock market has rallied nicely since bottoming on March 9th, the economy continues to struggle. For some perspective on the current economic recession, today's chart illustrates the duration of all US recessions since 1900. As today's chart illustrates, the five longest recessions all began prior to 1930. The length of the current recession (now in its 18th month) is above average and the longest recession since the Great Depression. I thank P.S. for sending this along.

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And from the King Report on Monday morning..."ASI reports that rail traffic for the week ended June 13 hit a new low. ASI/Transwatch notes that lumber and crushed stone are good leading indicators for ‘future construction’. After a precipitous decline both rebounded smartly in Q1 and traded sideways for most of Q2. But now they appear to be rolling over."

Today's first story is only two paragraphs long. Short thought it is...you need to spend the 30 seconds it takes to read. It's from forbes.com and is headlined "IMF says dollar adjustment might be needed". Really? Who would have thunk that? The chief economist over at the IMF puts it rather succinctly...and the link is here.

I don't normally run political commentary in my daily column, but I do have all the time in the world for Texas Congressman, Ron Paul. His latest on the war supplemental appropriations bill that was passed last week in Congress is entitled "International Bailout Brings Us Closer to Economic Collapse". I thank P.S. for this story...and the link is here.

The next three stories have to do with one of the many criminal organizations that operates in the public domain. You can even buy shares in this one, as it's a publicly traded company. That company is Goldman Sachs. GS is joined at the hip with the U.S. Treasury Department, just as JPMorgan is with the Federal Reserve. Here are three stories [and a cartoon] that came out over the past weekend.

The first is posted over at zerohedge.blogspot.com. It's entitled "Filings Disclose Goldman Sachs' AIG Collateral Demands Were Reason For AIG Implosion". I thank Craig McCarty for the story, and the link is here.

The second story on GS is posted over at alternet.org. It bears the title "Suck on Our Yachts": Goldman Sachs Issues Non-Apology for Destroying the World Economy". "Goldman Sachs chief Lloyd Blankfein says he's sorry, then proceeds to brag about screwing us all." The author is Matt Taibbi...a writer for Rolling Stone magazine. The story is courtesy of lemetropolecafe.com and the link is here.

The last story on GS is this one from the Sunday edition of The Guardian in London. It's entitled "Goldman to make record bonus payout". I thank Florida reader, Donna Badach, for this story...and the link is "here.

The Goldman Sachs cartoon below is at least one year old...if not two...and very apropos. I kept it tucked away in my computer because I knew there might come a time when I could use it again. That time is now.

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Today it is not big business that we have to fear. It is big government. - Wendell Phillips

Yesterday, the bullion banks managed to get both gold and silver to both close below their respective 50-day moving averages. I doubt that is a coincidence. Ted Butler feels that we are about halfway through the liquidation process, but 'da boyz' still have lots of firepower left to take both metals down considerably lower than they are now...as they are totally in control of the precious metals market at the moment. I note, as I put this commentary to bed, that both gold and silver made a rally attempt in the thinly-traded Hong Kong market starting about 3:00 p.m. in their afternoon...only to run into some opposition in early London trading this morning. With options expiry for the July contract coming up on Thursday, the next couple of days’ activity could prove interesting.
See you tomorrow.

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