Note to all GSD readers: Because of the gold conference in Vancouver this weekend, I will probably NOT have a column on Saturday...but if I do, it will be very brief. Ed

It was another nothing sort of day in the gold market on Wednesday, with the gold price trading in a fifteen dollar price range everywhere on Planet Earth...a range of less than one percent.

Gold closed at $1,658.90 spot...up $7.30 on the day...and net volume was decent at 128,000 contracts, a lot of which would have been of the high-frequency trading variety.

Silver had a bit more direction. It got sold off at the London open...and you can see from the Kitco chart below that every rally attempt, no matter how tiny, ran into a not-for-profit seller. The high price tick of the day [$30.73 spot] came at 12:45 p.m. Eastern time...and then basically traded sideways from there.

Silver closed at $30.52 spot...up 46 cents on the day. It obviously would have done better if it hadn't run into a determined seller every time it attempted to move higher. Silver had an intraday price move of almost three percent. Volume was pretty heavy at 39,000 contracts...about a 40% increase from Tuesday.

The U.S. dollar index had an almost straight-line decline of 55 basis points yesterday...and since midnight on Monday night, the dollar is down 1.1 cents. That's a lot. It's obvious from the Kitco gold chart, that neither the gold nor silver price have been allowed to respond in the manner that they normally would. Here's the 3-day dollar index.

The gold stocks were up about a percent by 1:30 p.m. Eastern time before they mysteriously got sold off a percent during the following hour. But once that bout of selling stopped, the shares managed to crawl back into positive territory just before the close...and the HUI finished up 0.28%.

Even though the gold price is up a bit more than a percent this week so far...the gold stocks are down a bit more than a percent. You'll excuse me for thinking that someone is dicking with the gold price...and the shares.

The silver shares finished mixed...and Nick Laird's Silver Sentiment Index closed up 1.31% yesterday.

(Click on image to enlarge)

The CME's Daily Delivery Report showed that 58 gold and 23 silver contracts were posted for delivery on Friday. In silver, it was the Jefferies, Bank of Nova Scotia, JPMorgan 3-ring circus once again...with Jefferies the short/issuer...and the two bullion banks as the long/stoppers...as per usual. It's been like that all through January. The link to yesterday's Issuers and Stoppers Report is here.

There were no reported changes in either GLD or SLV yesterday.

But there was another sales report from the U.S. Mint. They sold another 16,000 ounces of gold eagles...along with 50,000 silver eagles. Month-to-date the mint has sold 106,000 ounces of gold eagles...9,500 one-ounce 24K gold buffaloes...along with 5,172,000 silver eagles. I'm only speculating here, but it's my belief that a lot of this product is ending up in Europe.

The Comex-approved depositories did not report receiving any silver on Tuesday...but they did ship 464,284 troy ounces of the stuff out the door.

Silver analyst Ted Butler had his mid-week commentary to paying clients yesterday...and here are a couple of paragraphs about the Sprott Silver ETF [PSLV] Offering that closed yesterday...

"The important takeaway is that a decent size chunk of physical silver will be taken off the market. It’s an open speculation as to what impact this will have on the price of silver, both short and long term. My guess is that while it certainly can’t be considered negative in any way, there are obvious forces that would prefer to make it look like it has no effect. These forces will do what they can to mute the impact of a fairly large physical purchase. Unfortunately, these commercial crooks may have built up some physical reserves over the past six months or so and may be able to accommodate Sprott’s physical purchase without too much difficulty. A couple or a few more similar-sized purchases would have a big price impact, in my opinion."

"I hope I’m wrong, but my sense is that Sprott is likely to get fairly quick delivery of whatever silver it purchases so as to avoid a repeat of the delivery delays that occurred the last time they purchased a chunk of silver. Eric Sprott has become an outspoken advocate of silver and antagonist against the silver manipulation...and I doubt the suppliers will risk delivery delays to his fund and give him the opportunity to point to tightness. I think that tightness is there, just that the sellers will be able to hide it a bit longer."

John Embry called me yesterday...and he said that by the time the smoke clears, the fund should be looking to purchase about ten million ounces of silver, which is around 10,000 good delivery bars. He said they would have sold a lot more silver if the shares hadn't been sold at such a high premium [12.5%] to the spot price. Here's the press release on that, which I dug up over at the marketwire.com website yesterday.

About two hours after I wrote the above paragraph, Nick Laird advised me that the PSLV website has updated their silver stock by 9,258,000 troy ounces.

I don't have a lot of stories today, which suits me just fine.

¤ Critical Reads

In MF Global, JPMorgan again at center of a financial failure

In late October, as MF Global Holdings Ltd teetered toward bankruptcy, Jon Corzine phoned his close-knit circle of Wall Street friends for help.

His firm, facing demands from customers and other firms for cash, needed to sell billions of dollars in securities to raise the money. As the week progressed, MF Global executives came to believe that JPMorgan Chase & Co., one of MF Global's primary bankers and a middleman moving that cash, was dragging its feet in forwarding the funds.

Corzine phoned Barry Zubrow, then JPMorgan's chief risk officer, to question the slow payments. Corzine also called William Dudley, president of the Federal Reserve Bank of New York, to update him on MF Global's status and told him that payments were slow to arrive from JPMorgan and others. Dudley said he'd monitor the situation.

This must read Reuters story was posted on their website late last night..and I thank Roy Stephens for his first offering of the day. The link is here.

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Ron Paul's NDAA Speech Yesterday

Congressman Paul has introduced a bill to repeal Section 1021 of the National Defense Authorization Act...and here is his speech from yesterday. He compares the U.S. today to Russia over twenty years ago. The speech only lasts 3:35...no matter what the youtube.com time counter says.

Australian reader Wesley Legrand sent me this video yesterday...and the link is here.

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Treasury dips into pension funds to avoid debt limit

The Treasury on Tuesday started dipping into federal pension funds in order to give the Obama administration more credit to pay government bills.

"I will be unable to invest fully" the federal employees retirement system fund beginning Tuesday, Treasury Secretary Timothy Geithner said in a letter to Democratic and Republican leaders in Congress.

The House of Representatives is expected to vote on Wednesday on the Obama administration's request to raise the country's legal debt limit to $16.394 trillion.

This Reuters story from Tuesday was picked up by news.yahoo.com...and I thank Scott Pluschau for sending it along. The link is here.

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China’s Treasury Holdings Fell in November

China, the largest foreign lender to the U.S., reduced its holdings of Treasuries in November for a second month as yields on the debt approached lows of the year and total foreign demand accelerated.

China’s U.S. government securities ownership shrank by 0.1 percent, or $1.5 billion, in November to $1.13 trillion, according to Treasury data released yesterday. The Communist nation’s bill holdings fell 12 percent to $2.3 billion.

China’s holdings of U.S. debt have fallen 2.4 percent this year through November to $1.13 trillion, the least since July 2010, when they totaled $1.12 trillion, from $1.16 trillion at the end of 2010, Treasury data show.

This Bloomberg story from yesterday is courtesy of West Virginia reader Elliot Simon...and the link is here.

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Greece fails to reach agreement with creditors

The Institute of International Finance (IIF), which is representing hedge funds and banks in the tortuous process, confirmed the first day of the resumed talks had failed to reach a conclusion.

A spokesman for the group said: "A lengthy meeting was held today with Greek Prime Minister Lucas Papademos and with Finance Minister Evangelos Venizelos and discussions will continue tomorrow."

Greece is under intense pressure to get its private bondholders, which hold billions of euros of Greek debt, to agree to voluntary losses of at least 50pc.

This story was posted late last night on The Telegraph website...and I thank Roy Stephens for sending it along. The link is here.

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Vampire Hedge Funds Are Sucking Greece Dry

Who are the real villains on Wall Street? When it comes to institutionalized greed and corruption, nothing tops the too-big-to-fail banks like JP Morgan Chase, Bank of America and Goldman Sachs. But these financial giants form only one part of the financial oligarchy. Lurking in the shadows are aggressive hedge funds that are just as lethal to our economic well being.

If Goldman Sachs is a vampire squid, as Matt Taibbi so aptly named it, then hedge funds are like schools of piranhas or sharks, eager to strip the financial carcass to the bone.

The sharks at this very moment are circling Greece, waiting to devour that nation’s resources. To understand this attack we need to enter into the rotting innards of our financial system.

This 2-page article over at alternet.org website is also courtesy of Roy Stephens. It's certainly worth the read in my opinion...and the link is here.

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IMF push for $1 trillion rescue fund to cost UK £15bn

Downing Street says Britain is ready to consider a request for extra funds from the International Monetary Fund, which is seeking to boost its firepower to around $1 trillion to safeguard the global economy.

The government made the comments just before the IMF confirmed reports that it wanted to expand its resources to protect ailing economies against any escalation of the eurozone debt crisis.

"Based on staff’s estimate of global potential financing needs of about $1 trillion in the coming years, the Fund would aim to raise up to $500bn in additional lending resources," the IMF said in a statement.

Currently the IMF has resources of around $400bn. Britain is liable for 4.5pc of IMF funding, so a $500m increase in resources leaves the nation liable to provide an extra $22.5bn, or £15bn.

This story was posted in The Telegraph yesterday afternoon...and I thank Roy Stephens once again. The link is here.

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Saudis target 'triple-digit' oil price for the first time

Saudi Arabia said on Monday it wanted to keep crude oil prices at around $100 (U.S.) a barrel, the first time the kingdom has targeted a “triple-digit” price and a quarter above the previous ambition of $75 suggested by King Abdullah in November 2008.

Ali Naimi, the powerful Saudi oil minister, said the world’s largest oil producer aimed to “stabilize” oil prices slightly below the current level of $111 a barrel.

“Our wish and hope is we can stabilise this oil price and keep it at a level around $100”, Mr. Naimi told CNN television. “If we were able as producers and consumers to average $100 I think the world economy would be in better shape.”

Saudi Arabia is not alone in requiring higher break-even prices. The International Monetary Fund estimates that the break-even oil price for the United Arab Emirates has now risen above $80 a barrel, up more than $60 a barrel from 2008. Even Kuwait, traditionally the richest emirate in the Gulf, has seen a hefty increase.

Peak oil is upon us, dear reader...and these eye-watering break-even oil prices out of the gulf are frightening. This story was posted in London's Financial Times on Monday...and was reprinted in the Globe and Mail. It's an absolute must read...and I thank reader Avinash Raheja for sharing it with us. The link is here.

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Kung Fu Girl Interviews Louis James of Casey Research

Louis James of Casey Research is one of the smartest, savviest, and most sophisticated investors I know. I had the honor of sitting down with him for an hour over the holidays where he graciously spoke with me about investing, what to look for (and look out for…) in 2012, the future of precious metals and where he sees them going, and much, much more.

The story is contained in a mp3 audio file...or you can read a pdf transcript. The story is posted over at the kungfufinance.com website...and the link here.

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Chris Whalen - We Have Panic Right Now & Flight Into Gold

Eric King sent me this Chris Whalen blog yesterday afternoon. It's posted on the King World News website...and the link is here.

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New York Sun: Gingrich goes for gold

Growing discussion in the Republican Party about returning the United States to a gold standard is noted by yesterday's editorial in the New York Sun, which cites the prescription outlined by businessman, historian, and gold advocate Lewis Lehrman in his new book, "The True Gold Standard: A Monetary Reform Plan Without Official Reserve Currencies -- How We Get From Here To There."

I stole the above introduction...from a GATA release yesterday. The Sun's editorial is headlined "Gingrich Goes for Gold" and it's posted here.

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The Great Silver Market Myth!

Here's a very interesting 3:34 video by silver analyst Dave Morgan. In this brief video he clearly explains how little silver there really is to go around if investment demand really gets going. It's posted over at the silverseek.com website...and it's certainly worth a listen. This is Roy Stephens last offering of the day...and the link is here.

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Is Bullion Back? 'Gold Is Still In a Super Bull Market'

Gold ended last year in violent fashion, dropping 21 percent in less than three months. The sudden move, coming as equities rebounded in December, raised doubts among many investors about the sustainability of a trade that has been a winner for 10 years.

But these kinds of moves are simply par for the course, said the long-term gold bulls. It’s just a way of shaking out the weaker and more speculative investors that pile into the metal for a short-term trade, they said.

After bottoming on the final day of 2011, gold is back at it again, up five percent in the new year, compared to a 3.9 percent return for the S&P 500 index. Despite the volatile ending, gold finished up 2011 by 10 percent, while the benchmark for U.S. equities was virtually unchanged.

This story was posted on the cnbc.com website late yesterday afternoon in New York...and I thank reader Phil Barlett for sending it along. It's certainly worth reading...and the link is here.

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The end is near, Embry warns gold price riggers

Interviewed by King World News yesterday, Sprott Asset Management's John Embry predicts that the physical gold market is about to overwhelm the price-rigging paper market, resulting in gold price increases that guarantee that no one ever, ever takes a gold price bet against Peter Grandich.

I borrowed the above introduction from Chris Powell's GATA release yesterday...and the link to this must read KWN blog is here.

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(Click on image to enlarge)

There are no markets anymore...only interventions. - Chris Powell, GATA

It was no surprise that the high of the day came just before the London open...and the low of the day came at the London p.m. gold fix at 3:00 p.m. GMT...or 10:00 a.m. Eastern time. Once again the London p.m. fix was lower than the London a.m. fix.

The preliminary open interest numbers in gold showed a moderate increase in o.i....and silver's open interest declined several hundred contracts. The final open interest numbers for Monday and Tuesday showed a decent increase in gold open interest...and a smallish increase in silver's open interest. All of that will be in tomorrow's Commitment of Traders Report.

Nick Laird has been busy the last couple of days...and had a whole pile of new charts for me to look at when I checked my e-mails on Wednesday when I got up. I spent an hour on the phone with him earlier this morning...which was late Thursday afternoon on the east coast of Australia...and we had a lot to talk about.

By the time I was through talking to him, I decided that my Vancouver presentation will center around the data that he has provided...and I will spend very little time talking about the Commitment of Traders Report, as all this new data has eclipsed that.

Here are two more charts that will be in my presentation at the Casey Research pavilion at the Vancouver Resource Conference this weekend. They may seem complicated at first glance...but they are not. If you spend a few minutes studying them, it won't take you long to see what the charts show.

The first graph shows the percentage gain or loss every year since the bull market in gold started in 1999...so you are looking at thirteen consecutive years of data. Nick informed me that all this data came from the LBMA website, so it's all official.

There are two bars for every year. The green bar is the price gain or loss that year if you bought the London p.m. gold fix...and then sold at the London a.m. fix the following morning, a nineteen and a half hour time period. The red bar shows the price gain or loss if you bought the London a.m. fix...and sold the London p.m. fix four and a half hours later.

The 'click to enlarge' feature come in real handy here.

(Click on image to enlarge)

As Nick states in the two boxes on the graph..."Since 1999 there has been a cumulative upward bias on the price of the ex-London trading hours of +343%...with a cumulative downward bias on the price of the London trading hours of -151%." But it's the comment in the other box that is the most damning..."As can be seen on an annual basis, London is short each and every year of the gold bull market."

As Nick also pointed out..."What are the odds that we can be in the biggest bull market in gold's history...and the price between the a.m. and p.m. gold fixes has shown a price decline every single year for thirteen years in a row?" That's a good question!

Well, dear reader, it's NOT possible unless the market is rigged seven ways to heaven...and the proof of that is staring you right in the face.

The next graph is a derivative of the first graph...and it shows the dollar gain or loss every year since the bull market in gold started in 1999...and it reads exactly the same as the percentage graph above.

(Click on image to enlarge)

As Nick points out on this graph..."Since 1999, there has been a cumulative upward bias on the price of the ex-London trading hours of +$2,426...with a cumulative downward bias on the price of the London trading hours of -$1,139.

Any questions?

If you think these two graphs are spectacular, wait until the see the ones that I'll be posting in this space tomorrow.

In Thursday trading in the Far East, not much happened to the gold price. There was a quick spike up at 9:00 a.m. in London...and that was quickly sold down. The silver price didn't do a thing until shortly after the London open...and then rose sharply to almost the $31 level before getting sold off to unchanged. As of 5:25 a.m. Eastern time, gold's net volume is about average...and silver volume is pretty chunky. The dollar index is down about 20 basis points.

That's all I have for today...and I await the New York open with more than the usual amount of interest.

I hope your Thursday goes well...and I'll see you here tomorrow.