The gold price, which had been enjoying a minor rally during most of Far East trading, began to head south about 3:30 p.m. Hong Kong time, which was a half hour before the 8:00 a.m. London open.

The price declined until shortly after the start of the London lunch hour, rallied until precisely 9:00 a.m. Eastern time...hit its low at the London p.m. gold fix, which occurred at 10:00 a.m. in New York right on the button.

The subsequent rally got sold off shortly after the Comex close at 1:30 p.m. Eastern...and then declined slowly into the close of New York electronic trading at 5:15 p.m...finishing down about seven bucks from Wednesday's close.

All in all, it may not seem like much happened in the gold market yesterday...but it's obvious to me that the bullion banks were lurking about yesterday. Volume, net of all roll-overs out of the June contract, was very light.

As I alluded to in my closing remarks in this column yesterday, all eyes should have been on silver's 50-day moving average where, as you can see, the price 'failed' in rather spectacular fashion. Without doubt, JPMorgan's footprint is all over the silver price chart below.

After the bottom at 10:00 a.m. in London...silver chopped sideways within a dollar range...maybe setting a double bottom shortly after London closed for the day at 4:00 p.m. local time...which was 11:00 a.m. in New York.

The silver price rallied a bit from that second low...and then traded sideways from about 12:30 p.m. Eastern time, until the close of the New York Access market at 5:15 p.m. Volume was average.

The dollar opened around 75.90 cents...and then slowly declined to around 75.36 by 9:30 a.m. Eastern. Then, in the next hour and a half, the dollar popped up 45 basis points, before declining a bit into the 5:15 p.m. New York close. The dollar closed down a bit more than a third of a cent on the day.

And if you can find any sign of yesterday's dollar price action in the gold price action...you're better than I am.

The shares pretty much followed the gold price...but only up to a point. The low for the stocks did not come at gold's low at the London p.m. gold fix at 10:00 a.m. Eastern...which is unusual. Then, when gold reached its secondary high price around 12:50 p.m...and then began to decline into the close...the gold stocks hung in there pretty good. The HUI finished unchanged on the day.

I've been singularly impressed with the strength of the gold stocks for the last couple of weeks...and I'm hoping that the worst has past.

Despite the fact that the silver price got hammered early...and finished down about 70 cents on the day...the silver stocks closed mixed. I consider that a big win. Here's Nick Laird's new...and very much improved...Silver Sentiment Index. It's much more user friendly...and Nick hopes you like it. I certainly do.

The CME's Daily Delivery Report showed that 29 gold, along with 136 silver contracts, were posted for delivery next Tuesday. It should come as no surprise that the big issuer [135 contracts] in silver was JPMorgan...with Prudential and Merrill stopping the lion's share of these contracts. The action is worth a look...and the link is here.

There were no reported changes in either the GLD or SLV ETFs.

The U.S. Mint had a smallish sales report yesterday. They sold 2,000 one-ounce 24K gold buffaloes...along with 25,000 silver eagles. I expect that the mint should have one more sales report before May is done.

The Comex-approved depositories showed that 646,892 ounces of silver were received on Wednesday...and a smallish 68,427 ounces were withdrawn, for a net increase of 578,465 ounces. The link to that action is here.

Here's a graph I haven't posted since late April...and that's the Gold/Silver ratio. As you can see, it changed quite a bit after the May 1st 'drive-by shooting' in silver...but has started to roll over now that silver is on the rise once again.

Under their "Market Nuggets" comments at Kitco yesterday, came this short piece..."Gold is a currency and not a commodity, says newsletter editor Dennis Gartman, of The Gartman Letter. Although it has fallen “a bit” from its highs in sterling, euro or yen terms, the operative word he says is “a bit.” The trend is clearly upward when looking at price charts, he says. “New highs are almost certain in the very near future… if not today, then tomorrow and if not tomorrow then early next week,” Gartman says. While gold is a currency, other precious metals are not. “Silver, platinum and palladium are the precious commodities,” he says.

There's no link to this piece...and I thank reader 'David in California' for sharing it with us.

¤ Critical Reads

ROSENBERG: THE 7 MAJOR RISKS BREWING

Just in case you were worried that David Rosenberg of Gluskin Sheff had turned all bright and happy with regards to the US equity markets – he brings us this executive summary of what ails the world. It's a short read that's well worth your time...and I thank Nitin Agrawal for sending it along yesterday...and the link is here.

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UBS may move investment bank to UK to avoid Swiss capital regime

Reports in US suggest Swiss regulators want UBS and Credit Suisse either to hold much more capital or relocate parts of their business to lessen risk to Switzerland's taxpayers

A move to London from its Zurich headquarters would allow the bank to minimise the capital it keeps to protect against a repeat of the near collapse it suffered in 2008.

This is a story that was posted late last night in The Guardian out of London. It was sent to me by Swiss reader G.B...who had this to say about it: "UBS and CS should be made to drop their "S"... They are less and less used by the Swiss...the management is not really Swiss...and the corporate culture is definitely not Swiss."

This is a very interesting read...and the link is here.

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Belarusian ruble devaluation threatens to cause social unrest, paralyze economy

A sharp devaluation of the Belarusian ruble has spread panic across the country, with people rushing on Wednesday to buy dollars, euros, toasters and canned goods — anything that will not lose its value as quickly as the national currency.

Belarusians swept store shelves and queued for entire days at currency exchange offices in a desperate attempt to protect their savings from the country’s sinking fortunes.

I ran a story about this country's monetary problems about a month ago. At that time, the central bank of Belarus had halted gold sales to its own citizens who were trying to protect their savings from the ravages of hyperinflation.

The situation has gone from critical to terminal in less than six weeks. This AP story, filed from Minsk...and posted in the Wednesday edition of The Washington Post...updates the situation in that country.

I thank Casey Research's own Bud Conrad for this story...which is an absolute must read from one end to the other...and the link is here.

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Jeff Nichols Interview About Gold, Silver Strategy

Here's a Bloomberg video interview from yesterday that was sent to me by Russian reader Alex Lvov.

Jeff Nichols, managing director at American Precious Metals Advisors Inc., talks about his strategy for precious metals and the outlook for gold and silver prices. Nichols speaks with Pimm Fox on Bloomberg Television's "Taking Stock".

The interview, which I consider worth watching, runs for 6:19...and the link is here.

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Why Gold Is Going Higher: David Galland

While there are many reasons that gold and silver are going to keep moving higher as the fiat currencies trend lower, at our recent Casey Research Summit in Boca Raton, faculty member Mike Maloney pointed out a fact that, while obvious in hindsight, I had never heard mentioned previously.

Namely that during the last major precious metals bull market in the 1970s, only about 10% of the world could own gold – either due to legal restrictions or a lack of liquid capital.

Today, few countries prohibit gold ownership, and a far higher percentage of the world’s population has transitioned out of poverty.

With some embarrassment, I thank reader Peter Handley for sending me a story from my own backyard...and the link to this Casey Research article is here.

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Silver Should be $150 Today: Stephen Leeb

With so much volatility in the gold and silver markets, King World News interviewed one of the top ranked money managers in the country yesterday...Dr. Stephen Leeb, Founder of Leeb Capital Management.

Eric sent me this blog yesterday morning...and it's definitely worth your time. The link is here.

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Once $3,000 Falls...Gold will Launch Like a Rocket: Rob McEwen

With the gold and silver markets still experiencing turbulence and the US dollar attempting to stabilize, King World News interviewed one of the great company builders, Rob McEwen former CEO of Goldcorp and current Chairman & CEO of US Gold.

Eric sent me this blog in the wee hours of this morning...and it, too, is worth the read...and the link is here.

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Peñoles now hedging some gold and silver production

Here's a story that was posted over at the mineweb.com yesterday...and it's courtesy of reader 'David in California'.

Mexican miner Peñoles said on Wednesday it hedged the bulk of the gold production it will receive from the Noche Buena mine, part-owned by its giant precious metals mining subsidiary Fresnillo. They sold forward 146,280 ounces of gold through 2016...along with 13.4 million ounces of silver through 2013...and 17,502 ounces of gold from other mines through 2012.

This is not a large amount of either metal...and probably had something to do with the financing of the Noche Buena mine, which starts production next year. The link to this very short story is here.

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U.S. commodity regulation -- a failed mission? - Ted Butler

Silver market analyst Ted Butler writes this week that the U.S. Commodity Futures Trading Commission, exchange owner CME Group, JPMorgan Chase & Co., and silver ETF manager BlackRock are now all complicit in the manipulation of the silver market...but silver investors are not powerless. Rather, Butler writes, they can complain to their members of Congress -- and such complaints, Butler adds, have gotten results before.

This is certainly a must read...and the link to this essay, posted over at silverseek.com, is here.

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Gold's net trading volume on Thursday was under 50,000 contracts once all the June roll-overs were removed. The preliminary open interest number showed a decline of 7,483 contracts...and most of that would be spreads being lifted...as there was nothing in the price action on Thursday to warrant such a drop in open interest.

Gold's final open interest number for the Wednesday trading session showed a huge decline of 17,262 contracts...all of which were spread related as well...and market neutral. The preliminary open interest number showed an increase of 7,813 contracts...but during a roll-over week [like this week]...a lot of these spread-related changes in open interest don't really mean a lot.

Silver's volume on Thursday was around 75,000 contracts net...much the same volume as Wednesday...and the preliminary open interest number showed an increase of only 2,492 contracts, which will undoubtedly be much reduced when the final number is posted later this a.m.

Silver's final open interest number for Wednesday showed an increase of 1,567 contracts...which is a pretty chunky decline from the preliminary number...which showed an increase of 6,039 contracts.

As I reported at the top of this column, with the delivery notice of 136 contracts in silver for Tuesday, the May silver contract has now past into the history books without incident. But this is the third or fourth month in a row where it has gone right down to the wire. JPMorgan was the last big short to deliver to the long holders again this month.

As far as the silver backwardation issue on Thursday was concerned, the premiums narrowed by a fraction of a penny in the nearer delivery months...and that was about the only change from Wednesday.

Today, at 3:30 p.m. Eastern time sharp, comes the latest Commitment of Traders report, for positions held at the close of trading on Tuesday, May 24th. When that time arrives, you can click here for the report.

Here's the 1-year silver chart once again.

Silver's attempt to break through its 50-day moving average at 2:00 a.m. Eastern time Thursday morning ran into the proverbial brick wall.

During the Friday trading session earlier today, both silver and gold began to rally the moment that trading began in the New York Access market at 6:00 p.m. Eastern time last night...and both worked their way slowly higher until the very early afternoon during the Hong Kong session. Silver made it just over the $38 mark before getting sold off...and gold is up about eight bucks in early London trading.

This price activity may have had something to do with the dollar...which fell off a cliff late last night...and has since stabilized just a hair above the 75 cent mark.

With today being Friday...Monday being the Memorial Day holiday in the U.S...and first day notice for delivery into the June gold contract on Tuesday...it could be an interesting trading session in New York early in the morning. But, I expect it to quiet down considerably as the day wears on, as everyone in New York's financial district will be heading out the door to get a running start on the long weekend.

I hope all my American readers have a great holiday weekend...and I'll see you on Saturday.