Jim Rogers Loves Silver!

Gold didn't do much from its Wednesday open until about half an hour before the Hong Kong close late in their afternoon [4:45 p.m.]... which was also about a half an hour after London opened for trading on their Wednesday morning [8:45 a.m.]. Then gold added about $5 or $6 in short order... then at 9:30 a.m. in New York, five and a half hours later, added another $7 to it's high of the day, which Kitco says was $1,142.10 spot. Gold closed the New York session about five bucks lower than that... but up $14.40 spot from Tuesday's close.

You will notice the moment that Bernanke opened his mouth at 2:15 p.m. Gold got pegged for $7... but gained back $8 by the New York close.

Silver followed an almost identical route... rising and falling in tune with the gold price. Silver's high price of the day was $17.80... but it's high price spike came about 15 minutes after the high for gold. All in all, silver gained 30 cents from Tuesday's close.

Here's the 3-day U.S. dollar chart. The precious metals sort of followed the dollar's lead during Far East and European trading on Tuesday, but that relationship fell apart around noon in New York... as gold remained strong right into the New York close, even as the dollar rose. This trend continued into Far East trading for the first two hours of their Thursday morning... this morning. Then things changed. More on that at the end of this column.

The shares had a nice 20-minute rally on the open yesterday... and then basically traded sideways to down a tad until 2:15 p.m. when Bernanke opened his mouth. The shares gave back some of their gains... and although the gold price recovered nicely... the shares did not. Once again, the juniors were the stars of the day.

Gold's open interest rose 4,470 contracts on Tuesday. Most of that would have occurred during New York trading, as there was quite a price surge during that period. For the second day in a row, volume wasn't particularly heavy... only 167,797 contracts traded... and gold o.i. is now back over the 500k mark at 504,368 contracts. Silver had a good price increase on Tuesday as well, but it's open interest went the other direction... it fell 569 contracts. It's impossible to tell whether it was short covering or new longs being placed and spreads being lifted... but at least the o.i. went down. Volume was a very smallish 27,004 contracts... with total o.i. now down to 121,787... which is still obscenely high.

Yesterday's CME Delivery Report showed that 69 gold and 43 silver contracts are due for delivery on Friday. The SLV ETF reported no changes yesterday... but over at the GLD ETF, they reported an increase of four tonnes... 127,412 troy ounces. I'm sure that the SLV is owned tens of millions of ounces more than the 29.6 million they received during the last couple of months... but they, like everyone else buying silver in quantity, has their truck parked at the refinery door waiting for their shipment.

The U.S. Mint had some news yesterday. They reported selling another 55,500 troy ounces of gold eagles in various sizes... including 44,000 of the one-ounce variety. It's been almost a month since the Mint has had any one-ounce gold eagles to sell. The U.S. Mint will have it's biggest month of the year in December... and has already sold 146,500 ounces of gold eagle bullion coins in various sizes. Year-to-date the Mint has gone through 1,340,000 troy ounces of gold in their gold eagle program alone... along with another 200,000 troy ounces in their 24K gold buffalo bullion coins.

The Mint also had an update in silver eagles as well... up another 103,500. Month-to-date, the Mint has sold 1,790,000... and year-to-date it's 27,783,000. That's two thirds of the United States entire silver mining production going into one product... the silver eagle bullion coin. My suggestion to my American readers is to buy as many as you can afford... while they're still making them.

The Comex-approved warehouses reported receiving a rather large 1,180,667 ounces. All of it was received at the Brink's depository.

I've got a lot of stories today... and I'll start off with the precious metals related ones. The first piece is one that Casey Research's David Galland sent me yesterday. It's a piece from mineweb.com headlined "Experts expecting a rush to Canadian mining stocks ahead of year end"... particularly the junior miners. In the story, it was stated that "2010 will see junior mining companies turn in one of their best performances in a decade." Let's pray that that's the case... and the link is here.

The next gold-related story is from James Turk, which is posted over at his fgmr.com website. What he talks about is one of the reasons why I wouldn't own any ETF... especially GLD and SLV. It's a fairly long read headlined "The Fractional Reserve Aspects of Gold ETFs"... and the link is here.

The next precious metals story was contained in a GATA dispatch yesterday. Discussion of gold market manipulation is growing and becoming more open. yesterday's formal acknowledgement comes from John Browne, senior market strategist for Peter Schiff's Euro-Pacific Capital, whose latest commentary remarks as follows about the European central bank gold agreement: "However, it is highly suspicious that these nominally independent central banks would take coordinated action to support the gold price. This is especially true given that they've spent the last 40 years trying to do the opposite. In my opinion, it is much more likely that the CBGA was designed to covertly time purchases and sales to magnify gold's price volatility, in order to dissuade investors from holding it over the long term." Browne's commentary is headlined "As Good as Gold" and is posted over at goldseek.com... and the link is here.

The next story is from The Telegraph in London. It's another offering by Ambrose Evans-Pritchard and bears the headline "Gulf petro-powers to launch currency in latest threat to dollar hegemony"... "The Arab states of the Gulf region have agreed to launch a single currency modelled on the euro, hoping to blaze a trail towards a pan-Arab monetary union swelling to the ancient borders of the Ummayad Caliphate." This article is well worth spending some time on. I thank reader Brad Robertson for bringing this story to my attention... and the link is here.

Here's another piece that Casey Research's David Galland passed around yesterday. It's a partial CNBC video interview between Jim Rogers and Maria B. Rogers mentions both gold and silver... and they spend a lot of time talking about them... and it's obvious that Rogers is a huge silver fan. That, dear reader, is what you should consider being as well. I'm already one. This video is well worth watching... and the link is here.

Craig McCarty sent me a Reuters piece yesterday that made me shake my head in amazement. Time magazine has named Ben Bernanke the 'Man of the Year' exactly one day before the Senate votes for his reconfirmation... which is now today. As Craig said... "Talk about media control and an inside job! What's next... Tiger Woods as family man of the year?" I'd love to see B.B. get voted out just because of that, but we'll have to wait and see. I have no link... and, dear reader, do you really want one?

There's been a lot of talk about boosting the U.S. debt limit lately. The figure being bandied about is $1.8 Trillion dollars. Now it appears that they're considering a much smaller short-term boost of roughly $200 to $300 billion just to prevent the U.S. from going into default over the next couple of months. Here's the very brief Reuters report on that linked here.

And lastly, come this story that I lifted from yesterday's King Report. It's another piece from The Telegraph in London... this one by writer Edmund Conway. The headline reads "Moody's warns of 'social unrest' as sovereign debt spirals'. These problems already exist in Greece and several smaller countries in eastern Europe... and it's only a matter of time before it becomes a problem in the U.S.A... which is one of the reasons why the Patriot Act was passed. The link to the story is here.

The truth of the matter is that you always know the right thing to do. The hard part is doing it. - Norman Schwarzkopf

Well, Jim Rogers didn't pull any punches when he talked about gold and silver... especially silver. And, dear reader, if you don't believe me, then maybe you'll believe him. He's also a big fan of other commodities as well... but I think I'll continue to stick with the two monetary commodities...as the central banks of the world print their way into this upcoming hyperinflationary depression.

Casey's International Speculator covers a myriad of junior mining companies and precious metals exploration stocks every month. The money I've made on just one of these junior companies in the month of December alone, has paid for the yearly subscription price many times over... and right now it's a bargain for first-time subscribers at $400 off the regular subscription price! How can you lose??? This special Christmas offer ends tomorrow!!! Click here to learn more.

As I mentioned near the beginning of today's commentary, a serious U.S. dollar rally began around 8:00 p.m. last night... which was at the beginning of early Thursday morning trading in Hong Kong. The nice little rally in both gold and silver that were developing before that, turned on a dime... and both metals are down... with silver down 30 cents and gold down more than $15 as I write this at 5:55 a.m. Eastern time. Volume in the February gold contract is already a monstrous 52,601 contracts... and silver volume [for March] is lagging badly at 6,147 contracts.

It will be of great interest to see how long this dollar rally lasts. Jim Rogers stated in that interview that he was long the U.S. dollar in the very short term only. Let's see how he makes out... and how gold and silver do in the face of that.

See you on Friday.