How would lack of bids prevent prices from going up. Isn't it the other way around? Buying at the offer not the bid would make price go up. I think it was a rush to raise cash by weak sellers. The hedge funds have been getting big margin calls in gold, silver, oil, and natural gas stocks the past 2 weeks.

yes, there were margin calls requiring forced sales. but what ed steer is saying is that in addition, the bullion banks pulled their bids. so when the longs tried to sell, there was no one to buy. there were lots of offers to sell, but the buyers had gone on strike. in particular, no one (on the comex at least) wanted to buy silver, so the price fell off a cliff. at some price, someone would step up and bid, but it was at the sub-$10 level.

of course at the same time people were panicking to sell silver in london and new york at whatever price they could get, people everywhere else were panicking to buy silver, no matter what price they had to pay.