The gold price made a smallish rally attempt in early Far East trading during their Tuesday morning, but that came to an end shortly before 11:00 a.m. Hong Kong time...and by the time that London opened at 8:00 a.m. BST...3:00 a.m. Eastern...the gold price was basically back to its New York closing price on Monday afternoon. This despite the fact that the dollar was in melt-up mode.

As I stated in 'The Wrap' yesterday, the bullion banks weren't going to be happy with the fact that gold and silver weren't going down as the dollar was going ballistic...and they would show up sooner or later to give it a shove.

Well, that shove started right at the London open...and you can count the six tiny sell-offs for yourself on the Kitco chart below...with the low of the day [$1,680.60 spot] coming during Comex trading at 9:10 a.m. Eastern time.

From there, a very spirited rally [short covering?] began which took the gold price back above the $1,700 mark in very short order...but then a not-for-profit seller showed up [or the buyer disappeared] shortly after 10:30 a.m...and once the seller went to lunch just a few minutes after 12 o'clock noon in New York, the gold price rallied to its New York high at 2:30 p.m. Eastern time in the New York Access Market. It traded flat from there into the close of electronic trading at 5:15 p.m.

After getting smoked for about thirty-five bucks [two percent] from Monday's close, the gold price actually finished in the black, closing at $1,790.90 spot, up $4.80 on the day. Net volume wasn't overly heavy...only 161,000 contracts.

Silver's price path was about the same as gold's, with the only significant [but very predictable] difference between it and gold, was the fact that silver was not allowed to rally back into positive territory...and was not even allowed back above the $33.50 spot mark no matter how many attempts it made.

From its New York close on Monday, to its intraday low [$32.06 spot] shortly before 9:00 a.m. in New York on Tuesday morning, silver was clocked for $2.18...a hair under 6.4%...but 'only' closed down 79 cents on the day at $33.45 spot, a little more than two percent.

Not surprisingly, silver's net volume was a very chunky 45,000 contracts, virtually double its Monday volume.

Here's the 3-day dollar chart. Like yesterday, the Japanese intervention in the yen on Sunday night is the stand-out feature on the very left of this graph.

The dollar closed Monday afternoon at 76.5 cents...and had gained another full cent by 8:50 a.m. Eastern time on Tuesday morning...which just happened to coincide with the absolute lows in the silver and gold prices. But you can see from the gold and silver chart above, that the metals didn't seriously start to decline until they were given several shoves to get the ball rolling down the hill shortly after the London open.

So to say that the gold and silver prices were a reverse image of the dollar movement yesterday is a gross exaggeration. In the end...'day boyz' had to beat it to death to make it fit...and it only partially fits at best, as it certainly doesn't explain the huge rally in both metals the occurred after the lows in New York yesterday morning...as the dollar did practically nothing after the top was in. But as I said previously, it could have been short covering, which is always independent from what the dollar is doing.

Even then, they needed a not-for-profit seller to keep it under control between 10:30 a.m. and 12 o'clock noon Eastern time.

Needless to say, with gold just coming off its low a half hour before the equity market opened, the stocks gapped down, but went into rally mode right from the outset...and once the not-for-profit seller in gold and silver disappeared minutes after 12 noon in New York, the gold shares rallied sharply and were actually in positive territory before getting sold off a hair into the close at 4:00 p.m. Eastern. The HUI finished down a tiny 0.30%...which, considering the fact that general equity markets got creamed, is a big win in my books.

Despite the fact that silver never even came close to closing in positive territory, the stocks themselves performed admirably well...at least most of them did. There was obviously a big buyer supporting the precious metal shares despite the price action in the general equity markets. Nick Laird's Silver Sentiment Index only closed down 1.74%...another big win.

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The CME's Daily Delivery Report showed that 74 gold, along with 4 silver contracts, were posted for delivery on Thursday. Nothing much to see here.

There were no reported changes in GLD yesterday but, surprisingly enough, SLV added 535,211 troy ounces of silver despite the fact that the silver price was down big yesterday...and the day before.

There was another big surprise from this week's report from Switzerland's Zürcher Kantonalbank, as the big withdrawals in gold [213,209 troy ounces] and silver [6,173,934 troy ounces] they reported two weeks ago were reversed with their report yesterday. Obviously there had been a bookkeeping error.

Not only did they reverse those numbers, they also added 75,431 ounces of gold and another 516,341 ounces of silver last week as well. The European buyers have been adding gold and silver to ZKB's precious metal ETFs with a vengeance over the last couple of months. I wonder why? I thank Carl Loeb for providing this data.

The U.S. Mint had a smallish sales report for the first day of November. They sold 4,500 ounces of gold eagles...500 one-ounce 24K gold buffaloes...and 25,000 silver eagles.

But that's not all the silver the U.S. Mint used in October. They also used 48,980 ounces in the America the Beautiful 5-ounce coin...31,097 ounce in proof eagles...and 1,507 uncirculated eagle 1-ounce coin. That adds up to 81,584 troy ounce of silver. Year-to-date the mint has used 2,989,169 ounces of silver in those three items...so it was obvious that October was a horrible sales month.

Reader Ron Copley of Carmel, Indiana...the reader that kindly provides this information to us on a monthly basis...had this to say as well. "Also in October, the Mint sold out its entire run of 25th Anniversary 5-coin Silver Eagle sets. All 100,000 sets - 500,000 ounces - sold out within approximately 5 hours of their initial offering on the Mint's website. In the secondary market, the sets are already fetching substantial premiums over the Mint's price."

So there's another 3.4 million ounces of silver that the mint has used on top of the 36.5 million ounces used in the regular silver eagle program so far this year.

There was a lot of activity at the Comex-approved the warehouse on the last day of October. They reported receiving a very large 1,840,487 troy ounces of silver...and shipped 308,850 ounce out the door. The link to that action, which is worth the look, is here.

Silver analyst Ted Butler gave me the OK to steal one more paragraph from his weekend commentary...and here it is.

"We sold off dramatically [in the third week of September] because the commercial crooks, operating primarily on the exchanges owned by the CME Group, artificially rigged prices lower [in the middle of the night and at other thinly-traded times] to set off stops below key technical moving averages in order to force leveraged longs and other speculators to sell so that the commercials could buy. This wasn’t confined to silver, although price rigs are invariably more extreme in silver, as many markets were affected. Within barely more than a week, copper just rallied more than 70 cents (20%) after having fallen almost a dollar in the September smash. I can assure you that no negative or positive fundamental supply/demand development was responsible for the copper price volatility. As was the case in other commodities, the cause of volatility was paper dealings on the NYMEX/COMEX. This is all verified by changes in positions as detailed in CFTC data in the Commitment of Traders Report (COT). It is shameful that federal regulators stand by while a few large commercial traders, led by JPMorgan, have hijacked the commodity markets with their paper trading control. Just don’t fall for any stories suggesting legitimate changes in real supply and demand are behind the unusual price movements, as those stories are a crock." [This sounds suspiciously like what happened on Monday and Tuesday of this week. - Ed]

This hoard of ancient gold coins in the photograph below, was probably buried by a British nobleman during a time of war. He would have intended to return and retrieve his wealth when hostilities were over.

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I have the usual number of stories today...but a lot of them have to do with the referendum in Greece that their Prime Minister called late Monday night...and I ran that story in this column yesterday. What a wailing and gnashing of teeth that brought the moment Europe woke up yesterday morning.

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US Plans To Issue $846 Billion In Treasurys In The Next 6 Months, 35% More Than Previous Year

Since obviously nobody in charge has learned anything at all, and all the old school games will continue until they no longer can, and demand for US paper, already plunging at the international level, disappears [aside from the Fed of course: the Fed will always be a happy last ditch monetizer of one-ply US paper], here is the Treasury's just released schedule for bond issuance for Fiscal Q1 [Oct-Dec 2011].

This zerohedge.com piece was sent to me by Washington State reader S.A...and the link is here.

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Greece announces a euro referendum – hark what discord follows

I wish I could convey the sheer writhing horror that George Papandreou's referendum proposal has provoked in Brussels. Eurocrats instinctively dislike referendums. They feel that their work is too important and complicated to be vulnerable to the prejudices of hoi polloi (or, to be truly pretentious about it, vulnerable to the των πολλων prejudices – for once, the Greek phrase seems apposite).

A referendum at any time would be regarded by European leaders as irresponsible. But a referendum when the euro is teetering on the brink is seen as the height of ingratitude, selfishness and recklessness. Eurocrats believe they understand Papandreou's game: by putting the terms of the bailout to the electorate, he hopes to wring better terms from them. But they know, too, that people have a tendency to ignore their leaders' advice and vote against Brussels.

Yep, the "New World Order" crowd in Brussels were not amused. I thank Roy Stephens for this story that was posted in The Telegraph late Monday night...and the link is here.

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Fresh Trouble for Euro: EU Shocked and Furious at Greek Referendum Plan

Greece has stunned Europe by calling a referendum on the bailout plan agreed to by EU leaders last week. The move throws efforts to rescue the euro into doubt and heralds weeks of market turbulence ahead of the vote. A Finnish minister said Greece will in effect be voting on whether to remain in the euro.

This story, posted first thing yesterday morning on the German website spiegel.de yesterday, is Roy Stephens second offering of the day...and the link is here.

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Revenge of the Sovereign Nation

Greece’s astonishing decision to call a referendum – "a supreme act of democracy and of patriotism", in the words of premier George Papandreou – has more or less killed last week’s EU summit deal.

The markets cannot wait three months to find out the result, and nor is China going to lend much money to the EFSF bail-out fund until this is cleared up. The whole edifice is already at risk of crumbling. Société Générale is down 15pc this morning. The FTSE MIB index in Milan has crashed 7pc. Italian bond spreads have jumped to 450 basis points.

Unless the European Central Bank step in very soon and on a massive scale to shore up Italy, the game is up. We will have a spectacular smash-up.

This is Ambrose Evans-Pritchard at the top of his game over at The Telegraph...and this commentary is a must read. This is Roy's third offering in a row, for which I thank him. The link is here.

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Greece crisis: Papandreou's referendum is a gamble too far

The referendum announced on Monday by the Greek prime minister, George Papandreou, is probably the final bell before Greece defaults and quits the euro. Assuming it is not withdrawn amid all the political turmoil afflicting the ruling party, the vote is planned for January, and the issue will presumably be the latest bailout. But the real question will be: "Euro or drachma?"

Greece's ruling elite understands the dilemma perfectly, hence the negative reaction of political parties and the press to Papandreou's initiative, with six senior officials of his own party calling on him to resign. If the vote goes against the euro, Greece's economic, political and diplomatic strategy of the last 30 years would be deeply shaken. The repercussions would be incalculable, for Greece but also for Europe.

This story was posted in The Guardian last evening...and I thank Swiss reader B.G. for sharing it with us...and the link is here.

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Despondent Greeks call referendum plan "blackmail"

Disillusioned Greeks heaped scorn on Prime Minister George Papandreou's plan to put a bailout lifeline to a popular referendum, with some viewing it as a ploy to win backing for harsh austerity measures.

"This referendum is a bluff. They are just mocking us," said Emanuel Papadopoulos, 50-year-old street cleaner.

Like many others on the streets of Athens Tuesday, Papadopoulos said he felt the government was trying to stay in power by pocketing a semblance of popular support if Greeks voted in favor of the bailout deal.

This Reuters story, filed from Athens yesterday evening, is courtesy of Roy Stephens...and the link is here.

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Greek vote sets off 'pandemonium', engulfs Italy

Greece's startling decision to call a referendum on last week's EU summit deal has set off wild tremors across the eurozone, pushing Italy to the brink of a perilous downward spiral.

The country's ruling Pasok party appeared to be splintering on Tuesday night, leaving it unclear whether the government of premier George Papandreou can survive a parliamentary vote of confidence on Friday.

Signs that the EU's painstakingly negotiated Grand Plan is unravelling within days has been a profound shock to confidence.

A frantic search for safe havens led to the second biggest one-day fall ever recorded in Europe's AAA bond yields. Ten-year German Bund yields tumbled 25 basis points to 1.77pc, with similar moves in non-EMU Swedish and Danish debt. British Gilt yields fell to 2.2pc.

Italy took the brunt of the punishment. Spreads over Bunds spiked to a crisis-high of 459 basis points before the European Central Bank came to the rescue. Spanish spreads reached 384.

This piece from late yesterday evening's edition of The Telegraph is another Ambrose Evans-Pritchard offering...and I thank Roy Stephens for sharing another must read article with us. The link is here.

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Absent in the Euro Crisis: Political Paralysis Prevails in Italy

Italy's partners in Europe are angered by Rome's apparent inability to bring its debt mess into order. Silvio Berlusconi's failures and a state of political paralysis have allowed the country to slide to the center of the European financial crisis. The opposition appears to be powerless and many wonder if the Italians are still capable of solving their problems on their own.

While the Mediterranean coast was flooding, dams of another sort were breaking in Rome, where an entire nation found itself embarrassed and ridiculed by its partners in the European Union -- Italian media, of course, reported on that as well. The Italian president had to endure questions about whether his country's government was still capable of functioning at all, and if not, whether or not there was a replacement ready to take its place. Several members of parliament came to physical blows during a parliamentary session, while Prime Minister Silvio Berlusconi, already reduced to an object of incredulous head-shaking abroad, seemed to slip closer to his downfall. The country pinned its last hopes on a 17-page letter, demanded as an ultimatum by the country's euro-zone partners, detailing Italy's plans for averting the crisis.

For Italy, last week's summit in Brussels was a chance to find out whether the third largest economic power in the euro zone was still a serious partner within the EU at all, or whether the prime minister, unpopular at home as well as abroad, would yet again embarrass himself and his country.

Roy Stephens sent me this story that was posted over at spiegel.de late yesterday...and the link is here.

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One or Two Year End Game for Money Printing: Bill Fleckenstein

With stocks tanking and gold and silver consolidate recent gains, today King World News interviewed Bill Fleckenstein, President of Fleckenstein Capital to get his take on where we are headed from here.

When asked about the action in the metals, Fleckenstein responded, “First of all gold was down in dollar terms but it was up in terms of many other foreign currencies. Sometimes people will say how can gold be down given what’s going on, a lot of chaos. So if somebody has to liquidate their account because it’s related to MF Global or some other problem related to losses in another market, when there is this much chaos on any one day, what a market does on any one day doesn’t tell you that much.”

Eric sent me this blog yesterday afternoon...and it's definitely worth the read. The link is here.

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CHART OF THE DAY: Why John Paulson Says There's No Gold Bubble

John Paulson gave a speech on October 30th to the Chinese Finance Association, where he discussed gold, inflation, the outlook for the economy, and what he's investing in.

A key point: He's still a big believer in gold, and he thinks talk of a bubble is ludicrous.

This very short story [of which you've already read more than 50%] was posted over at the businessinsider.com website on Monday. The chart is worth the trip...and if you think you've seen it someplace before, it was posted in this column sometime last week. I thank Roy Stephens once again...and the link is here.

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Einhorn Bets Gold Mining Companies Will Beat Bullion

Hedge-fund manager David Einhorn is betting that gold-mining companies will outperform bullion, reversing the trend from the past six months.

“A substantial disconnect has developed between the price of gold and the mining companies,” Einhorn said today in a conference call discussing results at Greenlight Capital Re Ltd., the reinsurer where he is chairman.

“With gold at today’s price, the mining companies have the potential to generate double-digit free cash flow returns and offer attractive risk-adjusted returns even if gold does not advance further,” Einhorn said. “Since we believe gold will continue to rise, we expect gold stocks to do even better.”

This Bloomberg piece was filed from New York early yesterday afternoon...and is Roy Stephens final offering in today's column. The link is here.

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October Surprise: Can Gold Be The Panama Canal Treaty Of 2012?

Ralph Benko of The Gold Standard Now Project takes note of a Rasmussen poll that finds strong support in the United States for returning to a gold standard to curtail the power of political and financial elites. And we thought that most Americans didn't even know how to spell "G-O-L-D," just "Cash for Gold."

This 2-page article appeared in Forbes on Monday. I thank Chris Powell for wordsmithing the introduction...and reader Phil Barlett for bringing the story to my attention. It's worth the read...and the link is here.

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What you need to know about gold price suppression: James Turk

Here's a short James Turk blog that Eric King slid into my in-box just after midnight last night. It's nothing that you probably haven't heard before, but if you're a newbie in the gold world, it's certainly worth your time...and the link to the KWN website is here.

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Now we are just on a pure printing press standard. This will end, this is the end game for that...because in the end, the printing press is no panacea, otherwise Zimbabwe wouldn’t have collapsed. - Bill Fleckenstein...01 November 2011

It's hard to pick one particular reason why the gold and silver prices go hit so hard yesterday. There was obvious intervention after the London open...and it's also possible that there were some MF Global positions being unwound. I'd love to point a bony finger at JPMorgan et al and say it was all them, so I'll just have to be satisfied in thinking that it was mostly them.

Of course, with Europe's financial and monetary system going up flames yesterday, the last thing that 'the powers that be' would want is a gold price screaming to the upside, so no doubt there was probably intervention for that reason.

The preliminary open interest numbers for yesterday's trading day weren't much help...and although there were declines in the final open interest numbers for Monday's smack-down, I was expecting more. I'm really curious as to how much of Tuesday's trading action will be in Friday's Commitment of Traders report, as yesterday at the close of Comex trading, was the cut-off for that report. I'm assuming that everything that happened on Monday will be there, but the bullion banks are famous for withholding COT volume data when it suits them...and most of what happened yesterday may fall into that category. We'll see.

As Ted Butler pointed out to me on the phone yesterday, one thing that is pretty much a given, is that we're back at the bottom of the barrel as far as being cleaned out in the COT. No doubt there was a huge amount of short covering going on during the last two trading days...and on the two dollar-plus drop in the silver price, I would assume that JPMorgan will have eliminated most, if not all, of the 3,000 contract short position they put on during the last COT reporting period. We'll find that out on Friday as well, if JPMorgan reports all their trades from yesterday in a 'timely manner'.

London has been open a bit over two hours as I write this paragraph...and, like yesterday, the activity began at 9:00 a.m. local time...as both metals are enjoying a bit of a rally at the moment. How far this gets is anyone's guess, but hope springs eternal and, as of 5:18 a.m. Eastern time, volume was not overly heavy.

As always, I look forward to the New York trading session with great interest.

See you on Thursday.