Here are the 24 hour silver and gold charts from Kitco.com. The red arrows show either intervention over come by high demand or normal market action. It is impossible for me to determine which it is. The orange arrow indicates a clearer picture of likely intervention as the price was dropped as falling off a cliff. In any case both metals hit high prices over night and have been under some pressure since then.

Notice that the patterns for both precious metals are very similar. That provides some suspicion.

This graph of the miners indicates a down turn in the near future. Both the RSI and MACD are turning downward. The volume of trades (black line) seems to be dropping. One positive indicator is that the 50 moving average in blue is staying above the 200 day in red.

DRD Gold is showing deteriorating signs. Both the RSI and MACD are showing downward moves. At the black arrow, we see the bad sign that the 50 day moving average has crossed under the 200 day. For any real advances, this would have to reverse. There is a balanced wedge forming (red trend lines). There should be a breakout at the trend lines converge. Currently, it would be expected to be a downward break out, but there is no knowing in advance and the convergence is some time off.

Hecla Mining is in better shape than DROOY. However, both the RSI and MACD are turning downward. There is a drop in volume during the last 4-5 days of trading. HL has established a narrow trading range from near 4.75 to 5.00. This is a sound company which has a good position in the silver industry. It would be a great buy at about 4.00. But we must be cautious, as a correction in the precious metals is likely very near unless the dollar were to strengthen a bit. I'm putting in trailing stops on DROOY for now.

From the Daily Pfennig: "Peter Bernholz (Professor Economics in Basel) studied the world's 12 most important periods of hyperinflation and discovered that the tipping point occurs when deficits amounted to 40% of the expenditures.

For the United States we have arrived at exactly that point. The deficit of $1.5 trillion amounts to 41.7% of the $3.6 trillion in expenses.

You see, that Peter Bernholz, rounds some numbers, but for those of you keeping score at home, the real point is that the U.S. deficits are greater than 40% of expenditures... And you know me, I truly believe in this history repeating itself, or as Mark Twain put it, it may not repeat itself but it rhymes... Mark Twain also wrote: "It's not worthwhile to try to keep history from repeating itself""

The dollar gained over night, but is back on the downward path this morning. Oil has moved up to $79 from the $60s a month ago. Thus, expect higher pump prices. I can already see them rising here in San Antonio. Read Peter Berholz article with neat graphs HERE.

From MineWeb.com:

STEEL PRODUCTION

China steel production back near record

CISA figures showed that daily crude output rose to within a whisker of August's record levels

Author: Coco Li and Tom Miles (Reuters)
Posted: Tuesday , 20 Oct 2009

BEIJING (Reuters) -

- China's huge steel sector pushed production back towards the record level set in August, data from the China Iron & Steel Association seen by Reuters showed on Tuesday.

China is by far the world's biggest steel producer, with last year's output equal to that of the next eight steel producing nations put together. And this year production has boomed while steel mills elsewhere reined in operations for the first half. Read it HERE.

Many have questioned China apparent recovery from the financial crisis. With this and other reports coming out recently, it seems that Asia is leading the way out of the crisis. That is a sea change from what was seen as normal in the past. We were always the leaders out of any crisis. No longer true. The vast population of China craves the automobiles, computers, cell phones, and the other toys which we take for granted. That is causing a significant increase in domestic demand within China as the income level rises. Who said they were totally dependent upon our consumers? Even the Euro folks are big buyers from the Chinese.

From MineWeb.com:

Is your gold really there?

Continuing doubts are being expressed that all the gold claimed to be held by Central Banks and others may not be there, or title is being held by several parties as the statistics just don't appear to add up.

Author: Lawrence Williams
Posted: Monday , 19 Oct 2009

LONDON -

It doesn't just seem to be GATA which nowadays is questioning whether the volume of gold held in ETFs and in official reserves is really there - or perhaps there is more than one title to what is actually in the world's gold vaults? Would a run on gold bullion thus create panic among the Bankers?

Banking has run for centuries with the banks themselves only keeping on hand a fraction of the money owed to depositors with the balances loaned out and not always immediately available, if indeed it is even there at all, so when there is a run - like that on Britain's Northern Rock last year - the bank concerned can find it tough to keep its head above water. Northern Rock, in the event, needed to be bailed out by the U.K. government.

There are plenty of theories that the gold markets also operate on a similar principle - or perhaps worse. Not only may the banks not hold the amounts of physical gold they say they do, say the doubters, having loaned much of this to third parties, but there are now analysts and observers expressing doubts over the actual title to the gold that is still seen to be in the vaults, feeling that perhaps some of it has been sold several times over. Central Banks, for example, seem to hate being questioned over gold loans preferring to duck the question and keep any such arrangements under wraps, although most will admit to gold swaps and loans being made - but little or no detail. Read it HERE.

From LewRockwell.com:

The Zero Discount Value of Gold and Dethroning the Dollar

by Michael S. Rozeff

A truly major change in the global monetary system is beginning to materialize. The dollar is starting to be dethroned. Foreign governments and central banks are going to do the dethroning.

I have no prediction as to how slowly or quickly this process will take. The major dethroners, the Chinese, are on record as favoring a slow process. The transition is already occurring, however. Now that attitudes have shifted among the dethroners, they are likely to keep at it.

The transition will be away from the dollar’s use in international exchange and toward the use of stronger and/or more stable currencies. International deals are being made already in non-dollar currencies or through barter. Read it HERE.

From GlobalClimateScams.com:

Is Obama Poised to Cede US Sovereignty?

On October 14, Lord Christopher Monckton, a noted climate change skeptic, gave a presentation in St. Paul, MN. In this 4-minute excerpt from his speech, he issues a dire warning to all Americans regarding the United Nations Climate Change Treaty, scheduled to be signed in Copenhagen in December 2009. See the video and read the article HERE.

This is a very serious matter. All of the socialism that Obama and other presidents have brought into America are coming home to roost and causing us to lose our Constitution and liberty as we are changed more and more into slaves of the government. This treaty will virtually place us as citizens of the UN and subject us to taxation and regulation by this un-American organization. I urge you to at the very least view and listen to the short video.

Folks, we may be seeing a correction in the precious metals very soon. There is much going on in the financial crisis. This gives many folks great fears. The debate between deflation and hyperinflation (price inflation, that is). This debate continues and only God knows the outcome even for tomorrow. Long term, one would be hard put to deny that the flood of unbacked paper currencies in the world would not produce inflation. Our real question is "What about the immediate future?

Realize that we are now rapidly approaching the shopping season for our materialistic Christmas celebrations. Will this be a time for retailers to realize their usual 60% or so of annual sales or will this drop significantly this year. You can rely on the fact that there are likely to be many bargains as retailers drop prices to increase sales. I believe the pressure will be on as consumers cut back on spending.

I trust that you will all give King Jesus the place of honor, worship, and praise that He is due. After all, He is truly the cause of this season. Even though our government would like to hide this from us and the children in government schools, the fact is that without Jesus Christ, there would be no reason to celebrate.

Here are our miners from Scottrades streaming quotes: