From Ed Steer:

It was a very uneventful Thursday...at least as far as gold and silver prices were concerned. Both metals rose and fell gently from the beginning of Thursday's trading in the Far East...right up until the London silver fix 13 hours later...which is noon in London and 7:00 a.m. in New York. By that time, their respective prices were both back to almost unchanged on the day. But once the silver fix was in, gold tacked on about $7...and silver gained around 16 cents by the end of New York trading at 5:15 p.m. A certain amount of this rise may have had something to do with the falling US dollar...which began its descent shortly before 11:00 a.m. in New York.

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The only happening of note, was that every attempt by gold to breach $940...or silver to break above $14...was quietly turned back. That happened during Wednesday's trading as well...but with much more force. Options expiry passed very quietly, and with no fanfare at all. Therefore, the options written at those two strike prices expired out of the money, and whatever bullion bank had written these options contracts...or those at a higher strike prices...pocketed the commission. This sort of gaming happens all the time, and not just with silver and gold either.

The gold and silver shares were on fire yesterday, and their large gains surprised even me. As the usual New York commentator put it yesterday morning..."The HUI closed up 4.95% and the XAU up 5.75%...essentially at their highs, with the June downtrends decisively broken." [Is something up? - Ed]

Open interest changes for trading on Wednesday show that the big price spike in gold was caused by more longs being placed...probably by the tech funds [with the bullion banks taking the short side]...as o.i. rose a large 8,351 contracts to 378,698...on huge volume of 128,516 contracts. In silver, o.i. actually fell 972 contracts to 104,727...on a monstrous [for silver] 63,743 contracts...so it's likely that silver's price rise was a short covering rally...as this is what this decline in o.i. usually means. But 'da boyz' can hide a lot of things by placing or removing spread trades to cover their tracks.

Thursday's Comex Delivery Report showed that 151 gold contracts were delivered, along with 5 silver contracts. Based on yesterday's CFTC report, there are around 200 gold contracts and maybe 5 silver contracts left to be delivered in June. They only have today and Monday to get it done...as first day notice [and delivery] for the July contract is on Tuesday, June 30th. GLD was down 5.5 tonnes...about 176,700 ounces. There were no changes in SLV. There was another update from the U.S. Mint. There were no changes in silver eagles, but they pounded out another 10,000 gold eagles, bringing the June total to 113,000. And over at the Comex-approved warehouses, silver inventories declined 678,158 ounces.

The usual New York commentator had some interesting observations posted about what Dennis Gartman had to say yesterday morning..."In a revealing comment, The Gartman Letter, which had been sympathizing with those wishing to short gold, admits to being surprised by the action of the past couple of days. [So was I. - Ed] But it adds: 'What we do know is that there is substantive selling in gold between $980-$1000, for that area has stopped gold from advancing several times over the course of the past year. It stopped gold in July of last year; it stopped gold in March of this year; and it stopped it again in [at the end of] May. Who, or what, is there to sell gold is unimportant to us. What is important is that it has been stopped there again and again, and until that “stopper” is itself stopped from selling, or has finished its selling...being long is a mugs...or rigged...game. We know not which.' This is progress of a sort. Given TGL's role in the gold conspiracy controversies, it's a brave statement."

From the King Report on Thursday..."Yesterday, the European Central Bank pumped a record $662 billion into its money market. Even more startling is the 1% funding is good for 12 months. Analysts note that funding is nearly what the ECB has already provided for shorter periods. So the ECB is really extending terms more than boosting credit."

I have four stories today...one about real estate...and the other three are all gold-related in one form or another. The real estate story [courtesy of the King Report] is from Wednesday's Washington Post. Here is another ticking time bomb in real estate that isn't getting the attention it deserves...owners way behind on their mortgage, but the banks haven't had the time, money, or manpower to foreclose yet. It's a longish piece headlined "Not Paying the Mortgage, Yet Stuck With the Keys" and the link is here.

The next story is by Michael J. Kosares, the proprietor of USAGOLD-Centennial Precious Metals Inc. It's entitled "Dragon's Hoard"..."In one fell swoop, China profoundly alters gold market synergy" and the link is here.

Gold story number two is a Reuters piece filed from Beijing...and posted at the Interactive Investor in the U.K. "China should buy more gold because the dollar is poised for a fall and the metal is needed to support the greater international role envisaged for the yuan, a senior researcher with the ruling Communist Party said on Thursday." The headline reads something like that as well...and the link is here.

And lastly is a piece by one of Casey Research's own...Louis James...Senior Editor of the International Speculator. I read everything that Louis writes...and I highly recommend you do the same. The article is entitled "Beware of Zombies Wearing Lipstick" and is posted at kitcocasey.com. The link is here.

The free market punishes irresponsibility. Government rewards it. - Harry Browne

So...where to from here...now that options expiry, the FOMC meeting, and the U.S. Treasury's bonds have been downloaded to other central banks around the world? Can we go up from here? Sure...but in order to do so, the bullion banks will continue piling on short positions against all longs...and get to even more obscene levels than they are now. Can they get overrun...crash and burn? Yes, but not likely. Could we go down from here? Yep. Retail gold and silver bullion sales are way down...and for all intents and purposes, the Middle and Far East are not importing any precious metals worth mentioning. Gold and silver into the ETFs has slowed markedly...so where's the demand?

However...speaking with my GATA hat on...gold and precious metal prices have been controlled by government and/or the banks for almost all of recorded history. Nobody knows what the free market price of either of these metals really are...but I can guarantee you that they are several [if not many] orders of magnitude larger than they are now.

My very good friend [and GATA compatriot] Bill Murphy over at lemetropolecafe.com said in his commentary yesterday afternoon that "Gold [is] Poised to Gap Up and Soar". From your lips, to God's ears, Bill. Maybe that's what the shares have been telling us for the last couple of days. I'd love that to be the case. But I'm prepared for any outcome...and so should you.

I note, as I put the finishing touches on this report, that gold is finally trading over $940...and silver is over $14. Will it stay that way? Hope so! I don't like being a bear and crying "wolf"...but that's what the Commitment of Traders shows...and up to this point, it's been 100% accurate. So I'm not about to say that "this time it's different"...because it may not be. But like I said earlier, I'd love to be wrong...as I can eat humble pie with the best of them...as long as I've got a good bottle of wine to wash it down with.

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

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