From Ed Steer:

Gold's low price for the day came early in Hong Kong trading on Thursday morning. From there, and in fits and starts, the gold price managed to work its way slowly higher later in the Hong Kong afternoon...and into morning trading in London. But the real fireworks didn't get started until 8:00 a.m. Eastern time...shortly before the Comex opened for trading...and at 9:00 a.m. [sharp], gold was up $15 before the usual not-for-profit seller showed up. After that, every rally attempt got firmly sold off, so that by the end of electronic trading at 5:15 in New York yesterday...gold was only up about six bucks.

Silver's moves were even more dramatic...and it was obvious that someone was there to make sure that its price was not allowed to go vertical...which it gave clear indications of doing a couple of times. The first time [along with gold] was 9:00 a.m. [sharp] in New York...and the second time was moments before London closed two hours later. By the time the smoke had cleared at the end of New York trading...silver was up a magnificent three cents. Nothing to see here folks...please move along.

I'm not sure if this upside activity in both metals was new buyers showing up...or shorts covering their positions. It has to be one or the other...or a combination of both...and a clear indication of either won't be known until the open interest figures are out later this morning. Since it occurred on Wednesday, this activity will not be in tomorrow's COT report. We'll have to wait until next Friday.

All of this price activity occurred during a big rally in the US$ that lasted about 14 hours and added about 1.10 cents to the 'value' of the greenback. This was a bit of a surprise...considering the gold/dollar relationship that existed on Monday and Tuesday. The precious metals shares found yesterday's activity to their liking, and managed to hold most of their gains into the close of trading. I was impressed. Options expiry for both gold and silver is at the end of trading today, so it could get interesting.

Open interest for Tuesday showed that gold o.i. fell 4,623 contracts to 370,347...on total volume of 103,165 contracts. Silver o.i. fell 1,145 contracts to 105,699...on chunky volume of 45,190 contracts. These numbers should be reflected in the COT tomorrow.

The Comex Delivery Report showed that 107 gold contracts were delivered...and there was nothing in silver. Neither the GLD or SLV showed any changes...and there were no changes over at the U.S. Mint. However, at the Comex-approved warehouses, I see that silver inventories jumped a pretty large 1,902,590 ounces. That's three big rigs filled to the top.

A couple of gold stories today. The first is from the Indian website commodityonline.com. The headline reads "India June gold imports may dip by 50 percent". For any of my fine readers who don't know this fact...India is by far the largest gold market in the world. This story gives an excellent in-depth look into that market. I highly recommend you take the time to read it. The link is here.

The usual New York gold commentator had this remark yesterday...and a story to back it up..."After a number of days of double-digit US$ premiums for local gold in Vietnam, stories are gratifyingly appearing that smuggling has started again." The story [posted at english.vietnammet.vn] is entitled "Chinese jewelry smuggled into Vietnam"...and the link is here.

I have a three other stories worth your while today. The first two are courtesy of Bill King over at the King Report... and the first of which is a Bloomberg story about Japan's export slump...which has just gone from bad to worse. Exports in May dropped 40.9% compared to one year ago. Japan is imploding. The story bears the headline "Japan Export Slump Deepens, Casting Doubt on Recovery" and the link is here.

The second is from the Financial Times in London. It looks like the bear market rally in emerging market economies is over. [Can the rest of the world's bourses be far behind? - Ed] The headline reads "Russian market sell-off breaks 20% level" and the link is here.

And lastly comes this short Reuters story headlined "Lawmaker accuses Fed of 'cover-up' in BofA deal"..."Documents showed the Fed tried to keep secret information about the Bank of America deal from the Office of Comptroller of the Currency, the North Carolina-based bank's direct regulator, and from the Securities and Exchange Commission" [And some still try to deny that the Fed helps rig the gold market - Ed] The link is here.

Talk about perfect timing. On June 12th, just as Russia's Sarychev Peak volcano was erupting for the first time in 20 years, the International Space Station flew directly overhead. Astronauts had their camera ready and snapped one of the most dramatic earth-science photos ever taken from space. This photo was lifted from the home page of spaceweather.com The accompanying story is worth the read and the link is here.

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What is called the 'private sector' of the economy is, in fact, the voluntary sector; and what is called the 'public sector' is, in fact, the coercive sector. - Henry Hazlitt

Yesterday's action in both precious metals...in the face of a big jump in the US dollar...was a surprise to a lot of people, including this writer. And as I fire this off to my editor in the wee hours of Thursday morning, I see that both gold and silver are still in positive territory in early London trading. As I mentioned earlier, Thursday is options expiry in both gold and silver, so today's trading activity in both metals could be exciting to watch.

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