Gold prices came out of early European trading having held onto gains made during the Asian sessions with the price hitting a high near $1593 per ounce.  Once the U.S. pre-market opened, however, the very normal selling pressure began and pushed the price back down to $1584.  Then all hell broke loose as the exit polls from Italy showed very clearly that Silvio Berlusconi had shown strongly enough to create the very real possibility of a hung Parliament as no potential coalition government would be able to rule with a clear majority.

This was horrible news for the banksters on both sides of the pond.  I’m trying really hard to be sad for them.  Look closely you might see tears.

This was too much for even the hedge fund shorts who are quickly being abandoned by the Fed and the ESF and Gold pushed up to $1595 as the mother of all short-covering rallies is very likely to be in process.  Silver was able to regain $29.00 as well, even though risk assets all sold off — like the equity markets and WTI crude.

Look for Gold and Silver to have a rough time of it between now and FOMC Chairman Bernanke’s testimony tomorrow and Wednesday.  The last time Bernanke opened his mouth on the last day of February Gold was crushed for $120 in a single session.  At this point, though, I’m sure the Euro has fallen a lot farther than the Fed wanted with the USDX now solidly above 81, which is something the Fed doesn’t want.

Given the current structure of the market expect Bernanke to now talk up the idea of more QE to the end of time than otherwise.  That would light a fire under gold prices.