I doubt there will be any sustained weakness. I think the reason that we are seeing so much volatility lately is there is a rush by smaller retail spec players to close out losing short sales on any price weakness created by the usual price capping intervention. This means that just a few large players are effectively fighting the entire market at this point in their efforts to hold gold and silver down. Lined up against them are the hedge funds buying bullion, retail longs around the world, CB buyers looking to quietly rebuild bullion holdings, and a few senior gold producers that are still trying to close out hedges. The raids will not go away, but if the Cartel was still in control then we would never have busted through $1100 on the eve of COMEX futures expiry earlier this month. Instead, the raids have now become open season for those looking to buy.

So this market action is sure to further increase the concentration of shorts held by just a small handfull of players. If this was a scam on the long side it would have been crushed by the CFTC a long time ago. But since it is connected bankers acting on behalf of the Federal government, the regulators look the other way and pretend its all just fine. Lets not forget that Blanchard & Co sued Barrick in Federal Court for market rigging and the trial was thrown out because Barrick disclosed they were an agent of the Federal Government. Therefore JPM and a few others are untouchable. And who else on this planet would dare to go billions of dollars in the hole on a losing short play, and continue to go further out on thin ice by adding to that even as all the other players are scrambling to buy?

They will continue to cheat and steal until the house of cards collapses, just as we saw wtih Barrings Bank, Enron, Madoff, and many others. The smartest fund managers in the world are now putting hundreds of millions of dollars into physical gold and building positions in junior mining companies. I think they have the right idea. The market and mother nature will put an end to the manipulation even if the regulators refuse to do so.

cheers!

mike