The gold price made several attempts to break above the $1,800 spot price level during Far East and early London trading yesterday, but never quite made it.

Then, about half past lunchtime in London, a real serious buyer appeared...and in less than an hour, the gold price was up about forty bucks. This happy state of affairs lasted until minutes after the Comex open in New York, then the buyer either disappeared, or a seller of some note showed up.

From there, the gold price got sold off about fifteen dollars going into the London p.m. gold fix at 10:00 a.m. Eastern time. Then a smallish rally got squashed...but at precisely 12:00 noon in New York, a somewhat more substantial rally developed that lasted until just about the end of electronic trading at 5:15 p.m. Eastern.

Gold was up $46.60 on the day...and volume wasn't overly heavy once again...whatever that means these days.

Silver's price pattern was very similar to gold's...except it was more 'volatile'. The low for the day came around 1:00 p.m. Hong Kong time in the thinly-traded Far East market, but really began to fly shortly after London opened for trading. From there, the trading pattern was the same as gold's...price rise halted minutes after the Comex open...down into the London p.m. gold fix...subsequent rally got crushed...and the final rally beginning at precisely 12:00 noon in New York.

By the time the smoke cleared, silver was only up 47 cents on the day. Net volume was decent.

I must admit that I was underwhelmed by the performance of the gold stocks yesterday. Considering the size of the gain in the metal itself, I was expecting better. The low at the London p.m. gold fix stands out like a sore thumb...as does the low at 12:00 noon Eastern time. But considering the fact that the HUI is almost back at its old high...and the gold price is a long way from its old high, I guess I should be grateful. The HUI finished up 1.55%.

The silver stocks did very well for themselves again yesterday...and a lot of the junior producers chalked up some really impressive gains. Nick Laird's Silver Sentiment Index was up a respectable 2.07%. This is the second day in a row that the silver stocks have outperformed their golden cousins.

(Click on image to enlarge)

Well, the CME's Daily Delivery Report that came out late last night showed the deliveries for First Day Notice. There were 1,323 gold contracts, along with 173 silver contracts posted for delivery tomorrow.

In gold, the big shorts/issuers were the 'usual suspects'...with the Bank of Nova Scotia and JPMorgan delivering 1,311 of those contracts. The biggest longs/receiver with 1,204 contracts, was JPMorgan in its client account. All the other issuers and stoppers were of no consequence.

And it was the same short list of 'usual suspects' in silver as well. Of the 173 silver contracts posted for delivery on September 1st, the biggest short/issuer was JPMorgan [153 contracts] in its client account...and the biggest long/stopper was the Bank of Nova Scotia with 64 contracts received.

The list of issuers and stoppers in both metals is well worth a look...and the link is here.

The GLD reported receiving a smallish 48,680 ounces of gold...and there was no report from SLV.

The U.S. Mint had no sales report.

There was more activity over at the Comex-approved depositories on Monday, as they reported receiving 596,377 ounces of silver...and shipped 625,758 ounces of the stuff out the door, for a net decline of 29,381 ounces troy. The link to that report is here.

Here's a chart comparing the S&P today to the Nikkei in Japan's lost decade. The chart deserves your attention. This zerohedge.com graph was posted in yesterday's King Report.

(Click on image to enlarge)

I'm delighted to report that I don't have a lot of stories for you today.

¤ Critical Reads

Consumer confidence plunges as hope dims

Consumer confidence plunged in August as expectations dived, with worsening views on future business conditions, jobs and income, the Conference Board reported Tuesday.

The nonprofit organization said its consumer-confidence index fell to 44.5 in August, the lowest level since April 2009, from a slightly downwardly revised 59.2 in July. It was the sixth-largest one-month decline in the past 21 years.

The only surprise about this report is the fact that it's taken this long for it to happen. I thank Florida reader Donna Badach for sending me this marketwatch.com story...and the link is here.

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EU rules out fresh capitalisation for Europe's banks

The officials poured cold water on calls from Christine Lagarde, head of the International Monetary Fund for "mandatory" re-capitalization to avoid another financial crisis but acknowledged that the EU economy was continuing to weaken.

Jean-Claude Trichet, president of the European Central Bank, said there was no shortage of liquidity in the European banking system. EU economic commissioner Olli Rehn insisted that the health of EU banks had improved over the last year.

I 'borrowed' this story from yesterday's edition of the King Report. It's a story that was posted over at The Telegraph on Monday...and the link is here.

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Secret Exemptions Allowed Speculators to Distort Futures Markets

Here's your only absolute must watch/listen item for the day. It's a video posted over at therealnews.com...and was sent to me by reader Keith Hodge yesterday.

In this interview, Paul Jay talks to Michael Greenberger, who was the former Chief of Staff to Brooksley Born, who was chairperson of the CFTC from August 26, 1996 to June 1, 1999.

I was so impressed with this interview, that I sent it off to Ted Butler for his approbation. He thought it was first rate as well but, as he pointed out, Greenberger makes the same mistake that everyone else makes when talking about price manipulation on the Comex...that it can only happen on the long side of the market. The possibility of a short-side corner on any commodity is never discussed.

But, having said all that, watching this 18-minute video should be right at the top of your "To Do" list...and the link is here.

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Fed to hasten currencies' race to the bottom, Leeb tells King World News

I stole the following preamble from Chris Powell's GATA release yesterday, mainly because it saved me the trouble of wordsmithing an introduction myself, as Eric had already sent me the link.

Money manager and market analyst Stephen Leeb told King World News yesterday that the monetary metals are beginning to fly again in anticipation of more money creation by the Federal Reserve and other central banks in a race to devalue currencies. An excerpt from the interview is posted at the KWN website...and the link is here.

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Gold 2011 - A CNBC Special Report - The Golden Age of Gold

This 11-part gold report is rather an ambitious undertaking for a mainstream media outlet like CNBC. True, there is certainly some disinformation in here, but you know that the general public is now getting on board once you start seeing things like this. There are also three slideshows in the right side-bar that are worth your time as well...so this story should keep you off the streets for quite a while.

I thank West Virginia reader Elliot Simon for sending this along yesterday...and it's certainly worth spending some time on. The link is here.

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Here is Why Gold Shorts are Worried: Michael Pento

Here's a short blog posted over at King World News that Eric sent me yesterday. In it, Michael Pento says that the reason that gold is rising again is because of the fact that the Fed will announce more monetary stimulus at the FOMC meeting in September.

I suppose there's some truth in that, but I don't agree entirely...and I will explain why further down in 'The Wrap' section of this column. The link to the KWN blog, is here.

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I'm Now 100% in Gold, Roubini is Wrong: Gerald Celente

When asked what he was doing with his own money, Celente replied: "What did [Nouriel] Roubini say? Gold would be lucky to go to $1,100 an ounce. Where is it now? Flirting between the high of $1,780s and $1,900s. There are a number of people like myself and others that believe it's going much higher. You know, I used to be in Swiss francs [along with gold], I am not in Swiss francs anymore. I got into Swiss francs about a year and a half ago and did very well, but I've transferred everything I own into gold. I'm now totally invested in gold."

Eric sent me this story late yesterday...and the link to the King World News blog is here.

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What is NOT uncertain is that the current global fiat money system is DOOMED. The longer it is kept on life support, the worse its eventual demise will be. Gold has been telling us that for more than ten years. But now, more and more people are beginning to listen. - Bill Buckler, Gold This Week...August 27, 2011

Net gold volume on Tuesday was around 190,000 contracts, which was almost identical to the volume that we had on Monday...and silver's net volume was about 27,000 contracts. Virtually all the contract holders in the September delivery month have rolled over into December, or sold their positions prior to first day notice, which is today.

I said in my closing comments yesterday that I expected that both gold and silver would get sold off in New York if volume was on the light side. I don't know how much more spectacularly wrong I could get.

It's my guess that the big rallies in both gold and silver that began in the London trading session was more short covering by the Commercial traders. I'm sure that there were some tech funds going long, but both rallies had all the hallmarks of short covering. All the volume and open interest data associated with Tuesday's trading day should be included in Friday's Commitment of Traders Report, as yesterday was the cut-off for it.

I mentioned in the Michael Pento story posted at King World News earlier in this column, that I didn't entirely agree with what he to say about the reason for the big rally in gold since the beginning of August.

As Ted Butler pointed out in his quote that I posted in this column yesterday, the real reason that gold has been rising since early August is the fact that we are in the midst of an historic short-covering rally by the Commercial traders who are covering their short positions...and booking huge loses in the process. I urge you to re-read that one paragraph at the link above.

Every Commitment of Traders report since August 2nd has confirmed this fact...and the COT report due out on Friday will most likely provide further confirmation. It's a report that both Ted and I are looking forward to with great interest.

Here's a nifty chart titled "Transparent Precious Metal Holdings" that I borrowed from Nick Laird over at sharelynx.com. This shows the number of ounces of gold and silver in all the known repositories. As you can see, the silver ounces held dwarfs the gold ounces held by a factor of more than 8:1...and the holdings of platinum and palladium don't even register on this chart.

(Click on image to enlarge)

The gold price did practically nothing in the thinly-traded Far East market...and the London open at 3:00 a.m. Eastern time was a non-event as well. Of course the Tuesday trading day started off in a somewhat similar fashion...and look what happened there when the smoke finally cleared. Volume so far is pretty light.

Silver hasn't done much, either...trading mostly between $41.20 and $41.40 spot. Volume is basically non-existent...the lowest I can ever remember...under 2,000 contracts traded as of 3:34 a.m. Eastern time.

With volumes this light, I wouldn't read too much into any significant price activity in either direction at this time of day.

I haven't a clue as to what might happen during New York trading session today. However, it is the last day of the month...and there might be some book-squaring/tape painting going on. Most of yesterday's excitement occurred before the Comex open, so nothing would surprise me when I turn my computer on later this morning.

See you here on Thursday.