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Tuesday trading in gold turned into a pretty big bear raid. As I mentioned briefly in my rant yesterday…starting shortly after Sydney opened on Tuesday morning…someone bombed the bullion market with a big sell order. The word ‘big’ is relative in this case. In the extremely thin trading that characterizes Far East gold and silver activity…a 1,000 contract sell order would hammer the market…and that’s pretty much what happened in gold. Ditto for silver.

Anyway, after the Sydney pounding [courtesy of the U.S. bullion banks out of N.Y. one would think], gold didn’t stray far away from $897…and was within a whisker of that price when trading began on the NYMEX/COMEX at around 8:20 a.m. in New York. Then it was lights out. A vertical decline like that can only occur if there is huge selling volume into a no-bid market…i.e. the traders for the bullion banks stand there with folded

Apparently its not just the US, the Middle East, and Europe Scrambling for gold, but also China, according to a recent article in the Shanghai Daily.

Investors going for gold as a safe haven

By Zhang Fengming  |   2008-11-20  |     NEWSPAPER EDITION

DEMAND for gold in China rose 18 percent in the third quarter as consumers turned to the precious metal as a safe haven for their cash, the World Gold Council said yesterday.

Demand rose to 109 tons in the third quarter, the majority of which is attributed to a strong rise in the Chinese mainland, the council said yesterday, citing figures complied by researchers GFMS Ltd.

Demand from the mainland rose 20 percent to 99.8 tons. In Hong Kong it increased 7 percent to 3.8 tons while demand in Taiwan shrank by 6 percent to 5.4 tons.

China’s gold jewelry demand grew 9 percent to 92.5 tons in the quarter as sharply lower prices