May 26– Gold $650.80 up $2.50 – Silver $12.67 up 10 cents
Goldman Sachs and JP Morgan Chase Gold Bombing Raid Fails 
"The real rulers in Washington are invisible and exercise power from behind the scenes." ---Supreme Court Justice Felix Frankfurter
GO GATA!
An IN YOUR FACE GOLD CARTEL performance by gold. What a turnaround. SO bullish!
The other day I mentioned how gold ALWAYS goes down on market news emanating from Washington which should be bullish for the price. The move is ALWAYS counterintuitive. This morning was no exception.
Gold’s continued recovery was moving along just fine, with the price up as much as $6, when this news hit the tape:
Inflation Rises Above Fed Comfort Zone
Friday May 26, 8:45 am ET
By Martin Crutsinger, AP Economics Writer
Incomes and Spending Up, but Inflation Rises Above Fed Comfort Zone
WASHINGTON (AP) -- Consumer spending grew in April at the fastest pace in three months, supported by solid income growth. But in a worrisome development, a key gauge of inflation watched by the Federal Reserve posted the biggest increase in 13 months…
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That was all the Orwellians needed to see to take gold down, in an attempt to defuse the inflation talk of the day. "Everything is fine in Stepfordville. See the gold price go down you robots. What inflation problem?" 
Gold was then hit for $15, falling all the way to $640.
From a savvy fellow Café member:
"I just spoke to the floor and surprisingly Goldman and JPM initiated the selling!"
Enron is child’s play compared to the damage the top dogs at these two firms have done to unsuspecting and affected people all over the world. In time the gold scandal will be a top billing story and the Justice Department should go after them as much as they did the Enron people. One difference, and problem, with that. These executives will claim they were acting on behalf of the Fed and US Treasury.
It will surprise no veteran Café member that the "worrisome" inflation number caused a HUGE bid for dollars by an "unknown entity." This "bid," causing the dollar to briefly soar, came out of nowhere and was set in motion as the price of gold was still up $4 to $5. US interest rates, on the other hand, barely budged, while the stock market kept its strength.
Boy, are we getting a lot of mileage out of this one:
"And last, the provision of international credits and joint efforts to influence asset prices (especially gold and foreign exchange) in circumstances where this might be thought useful."
By William R. White
Economic Adviser
BIS
Today it was thought to be useful to send the dollar higher. It is that simple.
In addition to the inflation news, well pre-advertised news of the Treasury Secretary’s forced resignation hit the tape last night. Can’t have gold going up and the dollar in the tank with rumblings circulating over the US Treasury. "Everything must be fine!"
However, you know what they say about the best laid plans. The price break brought in a surge of buying, especially from the physical market. So much so gold was able to steadily climb back and go up on the day. The comeback was of the in your face variety to The Gold Cartel, which clearly wanted the price in dumpster today.
The rally and close higher bodes well for next week. It shows other traders that The Gold Cartel is vulnerable as well as serving notice that gold is in high demand below $650.
The gold open interest only rose 1065 contracts yesterday to 312,556. The specs have fled this market and continue to do so.
The COT report on gold released this afternoon was very bullish. The large specs reduced their long positions by 19,526 contracts and reduced shorts by 4,467 contracts, while the commercials increased longs by 1,651 contacts while reducing shorts by 15,798 contracts. As MIDAS constantly brings to your attention, The Gold Cartel uses these raids to gradually extricate themselves from their short positions. This is why the open interest is so relatively low.
My bet remains same … gold is on the move up again, shooting for $900 per ounce.
June gold
http://futures.tradingcharts.com/chart/GD/66
Silver actually led the move back up today, going plus first after the early smash down.
The silver open interest fell 1066 contracts to 109,280.
Technically silver is composing itself after the sharp price drop and appears ready to move higher just as it did in April:
July silver
http://futures.tradingcharts.com/chart/SV/76
The death of the copper market is greatly exaggerated. July finished the day up 10.75 cents to $3.8150. Aluminum closed up also.
Crude oil put on another nickel to $71.37 per barrel.
The "entity" buying drove the dollar up .60 to 85.19. The euro fell .80 to 127.22 and the yen sank 1.12 to 112.71. Once again we see the relationship between the dollar and gold is negligible. Although, it is fair to say that if the dollar had not been propped up by the Orwellians, the price of gold probably would have been much higher.
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