The moderator of supply and demand is supposed to be price, right? Well, the report on third-quarter demand from the World Gold Council ought to be a real head scratcher then. Supplies of gold are down 5 percent from year-ago levels, says the council, while demand has fallen 34 percent.

Year-over-year demand has dropped in each of gold's three market segments: for investments, off 46 percent; for jewelry, down 30 percent; and for industrial use, off 11 percent.

Gold prices, however, have risen universally. In key markets such as India and Turkey, gold prices spiked 15 percent and 33 percent, respectively. In dollar terms, gold rose 12 percent year-over-year, while euro prices rose 11 percent.

The bull market may have put gold out of reach for many consumers. That may account for some of the renewed interest in "the poor man's gold"—silver.

Since Monday, silver's made its first significant breakout move relative to gold since August. The 60x level for the gold/silver ratio looks likely to be challenged. A sustained decline in the multiple would signal the end of a 16-month cycle.

Gold/Silver Ratio

The active December COMEX silver contract settled at $18.42 Wednesday, taking out the resistance spotted in our Monday Desktop column ("Where's Silver Going?").

December silver's now working the upper half of a trading band that was churned for five months following its March 2008 breakdown from a $22 high.

That puts the contract on track to test resistance at $19.18, if selling at $18.86 is overcome. Support can be anticipated at the $18.45 level.