I must admit I am just guessing here.

I think the bullion banks under the FED and on their own from the time of Volker (who publicly stated the not suppressing the gold price was a mistake) have pushed this as far as it can be taken.

Bernanke feels FDR or whoever it was who revalued the dollar from $25 / gold ounce to $40 / gold ounce was successful in that endeavor in jump starting the economy. Hence he, unlike Greenspan and company, wishes to devalue the dollar with respect to gold hoping for a similar jumpstart. By surpressing the price they are working against him at a time when he might like to shift gears.

Hence the word has probably gone out to the bullion bankers, "Do what you have to do to get your shorts covered and then let the market go." That may be why the recent suppression of the price over the last few months was so severe. The banks may have tried to do whatever they could to get the price down and get out of their shorts. Open interest is way down now.

I hope this conjecture is true because it would likely result in a long, strong run for the metals.

P.