Thai Guru's Gold und Silber ... (Informationen und Vermutungen)

The John Brimelow Report

Japan moves aside: who is next?

Tuesday, August 17 2004

Indian ex-duty premiums: AM $3.97, PM $5.37, with world gold at $402.15 and $401.50. Below, and approximately at, legal import point. A resilient performance, considering world gold is up $8 or so in a couple of days.

On reflection, the comment yesterday on India’s April-June gold imports was awkwardly expressed. India imported 202.55 tonnes in the period, 30.7% or 47.63 tonnes more than the year before. To put this in perspective, the entire gold holding of the World Gold Council’s Gold Bullion Securities pool is 48.87 tonnes. India’s growth in one quarter was approximately the same.

TOCOM continued liquidating, with the active contract during the day touching a 4 month high, but finishing unchanged (as did world gold v NY’s close). Aggregate volume rose 39% to equal 18,239 Comex lots, while open interest fell the equivalent of 476 Comex. From the TOCOM Member’s position data it appears that the "General Public" has sold some 27 tonnes of paper gold in the past 10 days or so, a moderately significant obstacle to world gold prices. Mitsui-London expressed the view that they are now "closer to neutral", so maybe this impediment to a rising price is about to fade. (NY yesterday traded 46,857 contracts; open interest rose 3,103.)

A spirited attempt, widely said to be fund-lead, to rally gold in the early NY day met an impediment of its own. By 10 am 27,000 lots were estimated to have traded: the bulk a day’s volume in recent times. UBS reports:

"good fund buying started to lift the yellow metal above the $400 handle. One NY Bank coming in with a large buy order in Comex Dec Gold and a higher euro inspired more buying and both hurdles of $401 (200 day m/a) and $402 were taken out rapidly… The buying of around 4000 lots was matched with good selling on the way up… With more buying into the close of the same NY Bank the shiny metal managed a good close."

Barclays saw:

"..fund buying taking prices up to an intra-day high of $403.50 before considerable selling interest took prices back to $402 where it closed…holding around $402 although the selling interest around these levels remains considerable."

In other words, an attempt to clear a major moving average (200-day in this case) is once again provoking heavy selling, strange behavior for a proceeds-maximizing owner. Given the posture of the physical market from a seasonal as well as a price point of view, and that of the NY spec community, at the very least a good deal of bullion seems likely to change hands.

JB

CARTEL CAPITULATION WATCH

Bonds don’t like what they see coming up ahead in the US economic scene. They rose 21/32 to 111 13/32.

There was a slew of economic numbers this morning, led by the CPI below.

08:31 July CPI reported (0.1%) vs. consensus 0.2%; ex-Food & Energy 0.1% vs. consensus 0.2%
Prior CPI unrevised from 0.3%; ex-Food & Energy unrevised from prior 0.1%
* * * * *

One of the big depressants in the CPI was the drop in gasoline prices, leading to knee jerk headlines like INFLATION UNDER CONTROL. Good to know as crude oil closed today at $46.75, up 75 cents per barrel and at a new ALL-TIME HIGH!

So what gives? Over the past few weeks the US stock market was supposedly taken down out of concern over sharply rising oil prices – like $45 to $46 oil. Now oil is $2+ to nearly $3 per barrel higher than that and the US stock market has been on a bit of a tear for two days. Makes no sense. The DOW finished at 9972, up 17 and the DOG gained `2 to 1795. However, both seemed to run out of steam after firm openings. Psychological key numbers of 10,000 and 1800 could not be attained on a closing basis.

Perhaps it is ridiculous spin such as this which has stock market bulls in a flutter:

PLATTS --Analysts see positive US data pointing away from stagflation

Washington (Platts)--17Aug2004/150 pm EDT/1750 GMT

The nightmare menace of stagflation all but disappeared in July as data Tuesday showed US consumer prices dipped, industry ramped up output and home building boomed. "The recent spike in oil prices and the surprisingly weak economic data for June had caused a number of forecasters to contemplate a return of stagflation," said Wachovia senior economist Mark Vitner. "Today's CPI (consumer price index) data pour cold water on that notion," he said.

Stagflation is a crippling combination of stagnating economic activity and inflation. Many economists believed it was an impossible mix until the 1970s oil shock proved them wrong. But the threat of a return to stagflation now seems far-fetched in light of July government and central bank data showing the following: US consumer prices unexpectedly dipped 0.1% in July as sky-high gasoline prices at the pump slumped 4.7%. Stripping out volatile energy and food costs, prices were up only 0.1%.
--http://www.platts.com/petrochemicals—

More US economic headlines out this morning:

Reuters
Chain Store Sales Growth Slows
Tuesday August 17, 8:56 am ET

NEW YORK (Reuters) - Hurricanes Bonnie and Charley slowed U.S. chain store sales growth in the latest week, a report said on Tuesday.
Sales at major retailers increased by 2.3 percent on a year-over-year basis for the week ended August 14, down from the preceding week's 2.4 percent pace, said Redbook Research, an independent company. Sales in August so far were down 0.6 percent compared with July.

08:30 July Housing Starts reported 1.978M vs. consensus 1.898M; Permits reported 2.055M vs. consensus 1.95M
Prior Starts revised to 1.826M from 1.802M; Permits revised to 1.945M from prior.
* * * *

09:15 Industrial Production reported 0.4% vs. consensus 0.5%
Cap. Use 77.1% vs. consensus 77.5%. Prior Production revised to (0.5%) from (0.3%); Cap use revised to 76.9% from 77.2%.
* * * * *

09:44 YUKOY Yukos loses appeal on $3.4B tax collection order -- Reuters
* * * * *

12:17 Yukos loses appeal to pay its tax with Sibneft stake, reports Reuters
September WTI crude currently trading at $46.70.
* * * * *

You have to wonder what is really going on behind the scenes in Russia regarding oil!

GATA’s Mike Bolser:

Hi Bill:
The Fed added $5.5B in temporary repurchase agreements and $.9957Billion in permanent open market operations today, August 17th 2004. An action that caused the repo pool to drop a bit to $43.015B. The DOW's 30-day ma keeps dipping and we see the first real reaction by the Fed with today's largish permanent operation of $9957 Million. Recall that the market moving potency of the perms are far more than the temps but due to the way I carry them in the pool, this difference doesn't show up as clearly as it could.

This year we see the orange spheres (that represent the perms) with very few gaps compared to last Summer. This absence of gaps in permanent issuance tells us that the Fed is adding market interventional support in a kind of stealth fashion. Their action can levitate otherwise moribund markets in bonds and the DOW. I note with interest elsewhere at the café, that the Caribbean banks have shot up $17 Billion in their money transfers...perhaps we have a back-channel repo engine at work?

The ONE area that can be counted on to rise on its own (other than M1 monetary inflation) is energy. I will keep coming back and back to it as I see it as the greatest threat to the Fed's numerous rigs.

No one in the Fed imagined that a tiny boutique hedge fund had indirect control of $2 Trillion in derivatives but LTCM but they did and when they lost control the Fed was hard pressed to recover. Oil is like LTCM...a bomb with a burning fuse.

Oil to breach $50 barrier 'within weeks'
Oliver Morgan, industrial correspondent
The Observer Sunday August 15, 2004

Crude oil prices are set to break through the $50-a-barrel mark, according to traders and market analysts. After a week that saw records broken on successive days, traders believe the landmark figure could be passed within the next two months.

US crude went above $46 a barrel for the first time on Friday, while in London Brent broke through $43. Traders said volumes had been high throughout the week, particularly on Thursday, when more than 300,000 lots changed hands.

One Citigroup trader said: 'It is going to $50 before it goes to $40. The market is totally dislocated from fundamentals. Any piece of bad news and the market rises; anything else is just ignored.'

Friday's rises were connected to a fire at a BP refinery in America, but there is no shortage of news - from supply disruptions in Russia and the Middle East, to Chinese demand - to support record prices.

Last week the Paris-based International Energy Agency said there was only 600,000 barrels a day of sustainable spare capacity, although Saudi Arabia's oil minister attempted to ease fears, saying the kingdom could pump more if needed.

Another trader said: 'I have no doubt that the price is going through $50. I would say it will be there within five or six weeks.'

One analyst said prices would be kept up by the withdrawal of as much as a million barrels of refining capacity in Europe as plants were upgraded to meet new environmental specifications through the autumn.
++++++++++++++++++++++++++++++++++++++++++++++++
Russia

Notice the anti-Russian stories coming out? They're bending history, forgetting to mention Stalin's gulags in their history texts, says an AP piece yesterday. The Georgian mess heated up also yesterday with several dead in a fire fight between Russian dominated South Ossetia and Georgia, a province whose new Western leaning premier is supported by Bush. Meanwhile, the US is closing military bases and Sergei Ivanov, their erudite defense minister, is warning the US that a Russian encirclement strategy isn't helpful. Russian oil is fetching a pretty penny for them as they rapidly grow in financial strength. Add to the Georgian skirmish, the fact that Russia last week successfully tested an intercontinental ballistic missile, they keep on-again-off-again Iraq troupe offers conspicuously linked to WTO trade issues (so far not bearing Russian fruit) and we have a top-class piece of geopolitical entertainment unfolding. Sipping mint juleps between hurricane terrors... nothing beats it. Maybe I should build a bomb shelter.

You can always tell when Washington is preparing a policy move. They trot out negative "news" stories and the Russians always issue warnings through Itar-Tass news agency. I wonder how the compliant American press was prepped just before the battleship Maine blew up in Havana Harbor?

I imagine that the Russians are arming Iran to the teeth at this moment and perhaps our orbiting satellites have detected it. In any event, the last thing the president needs at this moment with his waning poll figures is yet another foreign policy explosion.

Gold
The cartel means to oscillate the PM Fix up and down around $400 by say, $4 or $5 either way.
Mike

Silver input from Europe:

Hi Bill,
Thanks for your outstanding service and comments regarding the gold and silver market.
Searching for silver bullions dealers in Europe IMO the following URL is highly representative for silver bullion demand and it's availability.
http://www.24carat.co.uk/silverbullionbars.html
Kind regards
Marc
(from Germany)

Gold was down around $1.20 this morning when Mahendra put out an alert to his subscribers (see below). Shortly thereafter, gold took off. Later on he sent all of us the following email:

Dear GATA Member's,
I promised that I will be back to GATA by 4th September but now I have decided to be early by two weeks. Because I feel that a small community on GATA should be given all kinds of news and views which are related to financial market. I still feel that, yes, also astrology has a role to play to giving guidance to investor's. I have found out a few extremists (not religious leader but financial market leader and as they feel that they own the market and an astrologer like me should be thrown out from the market).
Why are they worried? I want to work with all kinds of knowledgeable people, I won't take their chairs.
From the depth of my heart I really thank BILL and GATA to support my work.
Thanks Bill for your support, I am sure I won't let you and the metal community down.
Thanks & God Bless

*********************

.... (Der bereits bekannte Newsletter ist hier ausgelassen)

Gold technical input from Brother Tim:

Brother Bill, Looks like gold is rearing its 'ugly' head again. The weeklies show a solid head and shoulders formation that goes back to the beginning of the year.
Today the neckline was broken and a close higher than $403 basis spot on Friday confirms a break out with an upside objective of $455. The long term up channel which goes back several years also shows the top of the channel at $455. Given the strong technical picture of crude oil, the strong demand for gold in the cash market and the incredible public apathy toward gold, the odds favor a substantial move higher over the next few months. Keep up the great work. It's been a long haul this year, but our patience will pay off in a big way! Brother Tim

Tim Murphy
Swiss America Trading Corp
trmurphy@swissamerica.com
800-289-2646 ext 1019

The gold and silver shares remain lackluster and continue to fail to engender and decent sort of investor interest, certainly not remotely close to the enthusiasm of this commentator, nor compared to the outstanding gold/silver fundamentals.

GATA BE IN IT TO WIN IT!

MIDAS

Ulfur,

selbst der heutige Gata Bericht ,handelt mehr von Oel und Russland,als von Gold! Wollen wir hoffen das Mahendra recht behält,dann steht uns ja was bevor.Sein heutiger Bericht sogar mit einem Alert verfasst

Der wichtigste Satz im heutigen Gata Bericht war allerdings,

You have to wonder,what`s really going on behind the secnes in Russia regarding oil!!

Von der Seite kommt noch richtig was,Georgien brodelt,Yokos brodelt, Kaukasus und Irakkrieg haben die Russen den Amies auch noch nicht vergessen,wenn jetzt nur ein Funke ins Pulverfass fliegt,dann knallts aber richtig.

Danke für das Einstellen der Gata Berichte,in vier Wochen ist Thai ja wieder da??

Grüsse

Kalle

[Blockierte Grafik: http://images.bloomberg.com/nav/bblogo.gif]

Gold Rises to 1-Month High; Rising Oil May Slow U.S. Economy

Aug. 17 (Bloomberg) -- Gold prices in New York rose to the highest in a month on expectations that rising energy costs will slow the U.S. economy, dragging the dollar down.

Gold futures for December delivery rose $1.50, or 0.4 percent, to $406.70 an ounce on the Comex division of the New York Mercantile Exchange, the highest close for a most-active contract since July 16.

Crude oil on the Nymex climbed to $46.70 a barrel, near yesterday's record of $46.91, on concern that growing global demand is outpacing fuel-production capacity. Gold rose the most in four weeks on Aug. 6 after an unexpected slowdown in U.S. job growth sparked a plunge in the dollar against the euro.

``The U.S. economy thrives on cheap oil,'' said Patrick Sullivan, president of Great Lakes Trading Co., a commodity brokerage and consulting firm in Warsaw, Indiana. Gold traders expect rising energy costs will ``hurt the dollar at some point,'' he said.

Federal Reserve policy makers said last week after boosting interest rates that ``a substantial rise in energy prices'' was restraining the economy.

The metal also rose after the Labor Department said U.S. consumer prices unexpectedly fell in July, the first decline in eight months. Prior to the gains in the past two sessions, the precious metal fell 8.4 percent from a 15-year high after the Federal Reserve raised its benchmark lending rate twice, by a quarter point each time, to curb inflation.

``Gold popped up because people thought interest rates are going to be stable and not increase any more,'' said Dennis Eich, a trader at Chicago-based brokerage Peregrine Financial Group Inc

Auch die Fondsmanager weltweit trauen dem "Aufschwung" anschei-
nend nicht mehr so recht. Und handeln entsprechend:

http://www.handelsblatt.com/ps…hbi/sfn/buildhbi/cn/GoArt!200011,202973,778383/SH/0/depot/0/index.html

Gruss

Warren

Was ist denn beim Silber los
6,84 charttechn. kauftrigger generiert,
mich freut es auf jeden Fall, denn ich bin schon längst investiert

Zusammenfassung des Artikels

Viele Marktteilnehmer sind der Meinung, dass die seit Anfang des Jahres anhaltende Konsolidierung unmittelbar vor ihrem Ende steht.

Markus Metzger rechnet damit, dass der Goldpreis bald den alten Höchststand von 430 Dollar überschreitet und bis zum Jahresende 450 Dollar erreicht.

genannte Gründe für weitere Kurssteigerungen bei Gold:

• schwache Konjunkturdaten aus den USA
• schwächerer Dollar
• fortschreitende Verschuldung
• US-Handelsbilanzdefizit von 55,8 Mrd. Dollar im Juni
• Inflation

Vor allem bei den zu erwartenden Depotumschichtungen von Anleihen wird Gold der größte Profiteur sein.

Laut Ullmann (Fondsmanager von DJE Gold & Ressourcen) haben die internationalen Investoren bislang kaum in Edelmetalle investiert.

Zusätzlich rechnen Metzger und Roemheld (Fondsmanager Adig) damit, dass verschiedene Länder (Japan. China, Südkorea), die über keine nennenswerten Goldbestände, dafür aber erhebliche Bestände an US-Dollarreserven besitzen, ihre Strategie bald ändern und in Gold als Risikopuffer stärker investieren. Allein, wenn China seine aktuellen Reserven auf 5 % verdoppelt, könnte die Nachfrage kaum befriedigt werden.

Für viele Experten ist die 400-Dollar-Marke deshalb nur eine Durchgangsstation. Laut Metzger ist bis Ende 2006 ein Niveau von 600 bis 800 Dollar je Feinunze durchaus realistisch.

Quelle: Die Welt, 18.8.2004, S. 19

Ein interessanter Bericht bzgl. des Goldpreises in Euro. Hiesige Käufer von Münzen oder Barren zahlen in der Regel ja nicht in US$.

http://www.zealllc.com/2004/eurogold.htm

extrel

August 18 - Gold $404 unchanged – Silver $6.81 up 11 cents

NO FORCE ON EARTH!

They who lack talent expect things to happen without effort. They ascribe failure to a lack of inspiration or ability, or to misfortune, rather than to insufficient application. At the core of every true talent, there is an awareness of the difficulties inherent in any achievement, and the confidence that by persistence and patience, something worthwhile will be realized. Thus, talent is a species of vigor...Eric Hoffer

GO GATA!!!

The gold open interest rose 5361 contracts to 227,948 and goes to show you how determined The Gold Cartel is to keep bullion from taking out VERY key technical resistance at $405. From a technical perspective all gold needs to do is take out $405 to take off. It has already cleared other important resistance/chart points. The horse patoots manipulating the gold price, and fleecing most of you, know that. Therefore, the cabal has JP Morgan Chase sell and sell and sell yesterday, no matter how much physical market buying shows up. Then, they come back in again today to put the pressure on further, despite oil taking out $47 per barrel.

It is almost comical to hear the mainstream financial market commentators continue to remark how old market relationships don’t seem to hold anymore. Of course they don’t when markets are rigged. With WTI crude oil closing for the day at $47.39 per barrel, up another 64 cents, the gold/oil ratio has fallen to new lows at 8.52. (The Merc oil close was $42.27).

However, the bad guys have their hands full. It is called a surging physical market. Significant players all over the world (Arabs, Chinese, Russians, Indians, Turks, Koreans, etc) can see what these foolhardy morons are doing with their suppression of the price of gold. They know the value of gold with oil doing what it is and they understand how the US Government has let our financial house completely disintegrate, considering the state of US budget/trade deficits, etc. They know we are a house of cards ready to fall apart at any moment as time goes by. SPIN can only go far and Wall Street and Washington will find out in the months to come it won’t work any longer.

Besides, to paraphrase my friend Mahendra, NO FORCE ON EARTH!

"THERE IS NO EXTERNAL POWER ON EARTH OR THE UNIVERSE THAT CAN BRING DOWN THE GOLD AND SILVER PRICES. DESTINY HAS BEEN WRITTEN AND I AM JUST PREDICTING IT AS IT IS." Mahendra late last week

Silver turned things around for the precious metals today. A MIDAS comment written mid-day:

The silver trading was very thin. Morgan Stanley, the big player in that pit these days, joined others early on the sell to take it down a dime, apparently in an attempt to buy back what he sold yesterday at higher prices. The selling dried up and silver drifted back up. When Morgan S turned buyer, silver turned positive on the day in a flash.

***

About an hour later silver began to soar, rising 15 cents at one point. Not only did silver put in an outside key reversal day to the upside, it closed above all near term technical resistance at the $6.75 level. It is cleared to take out its gap left at $7.20 for a first stop.

September silver
http://futures.tradingcharts.com/chart/SV/94

The silver open interest only rose 155 contacts to 96,119. There is room for 30,00 new spec longs to power silver to new multi-year highs.

Silver continues to outpace gold. Maybe it’s because the price managers don’t have the ammo to stop it.

Gold, which fell back to $401.20 in the early going, then caught some life late in the trading session. It began to take off out of nowhere as silver surged. Going into the bell it went $404.90 BID when practically the entire cabal came out selling – namely Duetsche Bank, JP Morgan Chase and Goldman Sachs. ALL SOLD AT THE SAME TIME!!!! It’s called blatant price manipulation/price capping! Clearly, they ALL received orders simultaneously from Gold Cartel headquarters to prevent gold from getting through $405.

The gold manipulation farce goes on and on and the dingbats in the mainstream gold world will continue to say nothing as they have failed to do for so many years. These cretins remain beyond contempt.

Fortunately, the crooks may have too much to handle to keep gold down here any longer. Let’s hope so. As long articulated in this space, gold will only fly when these corrupt bums are carried out. With so many well-heeled foreigners doing the buying, this could finally happen.

For the second day in a row, gold came back from a deficit to go positive later on in the trading session. This tells us there is a substantial bid in gold, one which is clearly giving The Gold Cartel fits who desperately want to hoodwink the world skyrocketing oil prices are not inflationary. The easiest way to show this is so is to surreptitiously and artificially hold down the price of gold and then point to its subdued price action. Are the bums a tad desperate? The way the entire cabal assaulted gold late seems to reveal a bit of panic on their part. Panic? It couldn’t happen to a nicer bunch of guys!

According to the floor, the funds have turned extremely bullish after a mamby-pamby attitude towards gold the past couple of weeks. That breakaway gap MIDAS is looking for should not be too far off.

The dollar fell late closing unchanged. It was much firmer in the early going with the euro down to 122.80 before it rallied to close at 123.32, down .06. The yen was very firm, finishing the day at 109.31 in the cash market and up .62 in the futures market.

The Japanese fiscal half year ends the last day of September. Last year, in advance of that event, the yen took off as part of a repatriatization process. Japanese corporations, in order to shore up their balance sheets, bought yen, sending the yen a good deal higher. The Japanese government, in order to neutralize this process to some degree, sold dollars and bought bonds, sending the US bond market higher. At the same time, the Japanese and others bought gold, sending the gold price higher. Whether the gold move up was tied particularly to what the Japanese were doing, and will occur again, remains to be seen.

An interesting heads-up from my friend Judith McGee at Refco in Toronto.

The John Brimelow Report

JB: Ominous open interest build

Wednesday, August 18, 2004

Indian ex-duty premiums: AM $4.84, PM $5.58, with world gold at $403.10 and $403.30. Slightly below, and above, legal import point. India is tolerating the rise in world gold quite well: this fits with Reuters’ physical market round up today, quoting unusually sanguine Indian dealers:

"As long as gold is there in the range of $395 to $405, people will buy it. But at $405 and above, I don't expect much demand to come," said Rajeev Damani, managing director of Damani & Co in New Delhi. But some others dealers said consumers in India would have to buy gold anyway even if prices stay firm in the next few weeks. Indians consider gold an auspicious metal and like to buy or give it for marriages and during the festival season that generally begins in August and ends in November with Diwali, the Hindu festival of lights. "On those occasions, buyers must buy. They don't have options," said Amit Gupta, chief executive of PP Jewellers."

The story also reports premiums to be steady in the Far East.

TOCOM is not impressed. Liquidation continued, encouraged by a rallying yen. Open interest fell another 783 Comex contracts, the active contract closed down 4 yen and world gold went out $1.40 beneath the NY close. Volume slipped 21% to the equivalent of 14,716 Comex contracts. Mitsui-Sydney observes:

"The GP position is now down to 51.6 tons of longs. They normally average between 80 & 120 tons long & never go short. There could still be another 20 tons of selling but it is unlikely to get below 30 tons."

("GP" is the Japanese speculative community, or "general public". This was written before the publication of yesterday’s open interest data. They are probably now appreciably below 50 tonnes, or about where they ceased liquidating in Q2 last year. This particular ammunition source for the Bears is about exhausted.) (NY traded 44,277 contracts; open interest rose an appreciable 5,363 lots.)

Observers are unusually ambivalent about yesterday’s NY trading, noting that gold managed a rise against all currencies, and disagreeing about whether yesterday’s economic news did or did not help the metal. Gold has moved above most pet technical indicators (including the rarely mentioned downtrend line from the March 31 top), but has started to trade heavy volume and build open interest rather ominously.

Barclays today argues that gold has diverged from the usual relationship with inflation expectations since April (on the chart they offer – see attached - this seems to be so all year). At the risk of displaying one’s antiquity, it appears this month to be trying to follow Oil. Standard London’s frequently- updated Dubai kilo bar prices have shown high premiums this week almost without faltering, which is consistent with this thought.

On balance, the onus of proof lies with the Bears.

JB

CARTEL CAPITULATION WATCH

US stock market participants who were moaning about $44 oil last week have changed their minds. They seem to be deliriously happy as oil speeds towards $48 to $50 per barrel. The PPT did their job efficiently and won this battle, holding the US market long enough to turn the technicals and momentum sentiment. The DOW surged 110 higher to 10,083 and the DOG leaped 36 to 1831. Both have recaptured key technical levels which are critical to the incumbent Administration as the number of days to the upcoming US elections wane.

The day’s oil news:

10:30 DOE reports crude oil inventories reported (1.3M) barrels vs. consensus (1.875M) barrels
Gasoline inventories (2.6M) barrels vs. consensus (650K) barrels. Distillate inventories +2.1M barrels vs. consensus +1.5M barrels. September WTI crude is trading relatively flat in initial reaction to the data.
* * * * *

10:32 API reports crude oil inventories (1.5M) barrels
Gasoline inventories (3.5M) barrels, while distillate inventories +1.6M barrels. Crude spiked to $47.20, then fell to $46.90, following the release of both sets of data.
* * * * *

07:16 Speculation of bankruptcy filing by Yukos today
Unconfirmed speculation has it that Yukos could declare bankruptcy today. Yukos locally is trading down roughly 7% on the speculation. We're told an appeal hearing may be set for tomorrow. We note this speculation is likely adding to the increase in oil prices. September WTI crude currently quoted aty $46.95, off earlier highs of $47.04.
* * * * *

06:31 OPEC ups oil demand estimates for Q4, f05
For Q4 raised to 28.25M b/d, up from 27.45M. OPEC raised their estimate to 28.28M b/d in Q1 05, vs. prior estimates of 27.81 M b/d. OPEC says output may reach 30M bpd in August and may reach 30.5M/day in September. Production was up 599 K b/d from June to July, according to the report.
* * * * *

Followed by some potentially important copper news:

Aug. 18 (Bloomberg) -- Copper prices in London fell after inventories monitored by the London Metal Exchange had their biggest increase in 34 years.
Copper stored in warehouses monitored by the exchange rose 30,925 metric tons, or 39 percent, to 111,1000 tons, the LME said. It was the biggest increase in percentage terms since April 1970 and came a day after the stockpiles fell to their lowest since July 1990.
``Obviously it's knocked the market back a bit,'' said Angus Macmillan, an analyst at Prudential Bache International, in an interview. ``Thirty thousand tons of metal doesn't find its way to the market every day.''
Copper for delivery in three months on the London Metal Exchange fell $58, or 2.1 percent, to $2,770 a ton 10:14 a.m. local time.
Copper consumers had withdrawn metal from LME inventories amid forecasts that demand will outpace supply this year. Global demand will rise 6.9 percent to 16.8 million tons, exceeding output by 432,000 tons, Credit Suisse said last month….-END-

September copper fell 3.70 cents to $1.2705.

GATA’s Mike Bolser:

Hi Bill:
The Fed added $3,25 Billion in repos today August 10th 2004, an action that caused the repo pool to dip to $41.015Billion and to continue the roll-over of the pool's 30-day moving average. This change is the first is some timean as I mentioned before represents an important move. Taking any long positions in the DOW futures at this time is not recommended. There still remains a slight chance for a surprise DOW launch just before the election but that probability wanes with each passing day. Why the Fed is removing repo support at this time is anybody's guess but they ARE doing it for a reason. Even though the Dow Jones index is up at this hour, one should be wary.

The Venz

Hugo Chavez trounced his challengers in a referendum much to the chagrin of Washington who was hard at work attempting to change things in this oil-rich Latin American country. Chavez may move to strengthen his hold making any further US attempts that much more difficult. There will be no Kuwait-style oil rescue from the Venz anytime soon.

DIVO

The dollar index value of oil (DIVO) continues to rocket higher with its 200-day ma launching a very steep trajectory and this signals a profound weakness in the US Strategic Petroleum Reserve as I cannot imagine any president this close to an election permitting high oil prices if there were any way to avoid it. In other words, the president would have already aggressively sold oil in the SPR to drop its price if he could. To somehow wait until the very last political moment for an oil price drop rescue from the SPR doesn't fit with the other preemptive moves this administration has made. More and more it seems that the SPR is drained of sellable oil.
++++++++++++++++++

Big Oil isn't gaining friends these days:

World Bank ignores its own advice
By Nadia Martinez

"The World Bank's rationale for continuing to subsidize oil companies is that people in developing countries need energy. However, the Institute for Policy Studies' research suggests that 82 percent of the bank's oil - extraction projects wind up supplying consumers in the United States and Europe. The Institute has also calculated that the main beneficiaries of World Bank fossil-fuel extractive projects are Halliburton, Shell, ChevronTexaco, Total, and ExxonMobil, in that order, and the list continues.

Another rationale the World Bank offers is that its involvement in these projects offers oversight that makes them more environmentally sound and less prone to corruption. In reality, many of the bank's projects are riddled with these kinds of problems. For example, the president of Chad reportedly used part of the first proceeds from the World Bank-supported Chad-Cameroon oil pipeline on military weapons."

+++++++++++++++++++++++++
Heating-oil prices to stay hot for winter
http://www.csmonitor.com/2004/08...-usec.html

Some suppliers are already charging 35 cents a gallon higher than 2003. By Ron Scherer | Staff writer of The Christian Science Monitor

NEW YORK - If you think it's expensive to fill-up the SUV, wait until the fuel truck starts delivering this winter's heating oil.

That's right - there will be no respite from this summer's high prices. Fuel-oil companies are now offering customers' contracts that cap prices at about 35 cents a gallon higher than last winter. The Energy Information Agency estimates it will cost consumers an extra $100 to stay warm this winter using oil and an extra $179 using natural gas. And those estimates are based on wishful thinking: government forecasters are hoping today's price at more than $45 a barrel for crude oil will drop back to $38 by October. How much more it will ultimately cost to run the furnace this winter depends on the weather: a colder winter than normal could cause additional price spikes; a warmer winter might help lower or stabilize
prices.

++++++++++++++++++++++++++++

As for natural gas, there will be no retraction in natural gas prices. EIA reports Aug 10th:

³Henry Hub prices averaged $5.80 per thousand cubic feet in 2003 and are expected to average $6.21 in 2004 and $6.60 in 2005,².

Small debt-free natural gas firms with proven reserves continue to be an OK place to be.

+++++++++++++++++++++++++

Gold

I mentioned yesterday that gold may oscillate between $405 an $386 or so. This is exactly what happened today as the $404.40 high was swiftly followed by a bomb dropped by the manipulators.

My proprietary metrics (which now include synthetic real-time currency proxies) point to this pattern and in several important aspects the Fed seems to be choosing $400 as their dast-ditch defense line. They last defended DIVG 323 with several large up and down oscillations that were tradable at the time but today's up and down range seems far smaller and probably exceeds the transaction cost limits for average traders.

We see from John Brimelow's excellent reporting that the physical market is getting very hot. In addition, we see Ted Butler reporting large draws in COMEX silver inventories by way of a slick options sleight-of-hand by one of the COMEX traders which Ted believes can't happen again without a big jump in silver prices.

Against this backdrop of growing physical precious metals demand, bombing trade, economic and employment reports, continued geopolitical turmoil and soaring energy costs with the resultant deepening losses in real interest rates, it is astonishing that the Fed would adopt a line-in-the-sand strategy for gold and silver, and yet this is exactly what they have done.

The simplest advice to follow is to avoid the Fed's paper (bonds) like the plague and instead take their cheap gold and silver while it is on sale.
Mike

It could not be more clear The Gold Cartel is going all out to keep gold from leaving behind the numbers Mike has outlined for days. Do they win or lose? I bet they lose this time.

But, there is no inflation and WHY:

The King Report
M. Ramsey King Securities, Inc.
Wednesday Aug. 18, 2004 – Issue 2976 "Independent View of the News"

Here’s the most important thing you need to know about July CPI, and the same is true of August and September CPI: Q3 CPI is used for all COLAs. Ergo, the temptation to ‘fool’ with Q3 CPI is exceedingly strong because it saves Uncle Sam (robs Americans) billions of dollars.

Lower than warranted CPI overstates real GDP and real earnings. Within minutes of the CPI release a George Bush web site crowed, "Easing inflation in July had the effect of pushing up inflation-adjusted earnings. Real average weekly earnings, which posted a big 0.8 percent drop in June, rose 0.7 percent last month, according to a separate Labor Department report." But consumers have checkbooks shackled to reality. The consumer checkbook is not seasonally, hedonically or chain-weighted adjusted.

Permabulls, the Street propaganda machine and its appendages in the financial media heralded Tuesday’s economic data. These people ignored the disappointing readings in July industrial production and capacity utilization as well as the lower revisions of both for June. July industrial production was 0.4% (0.5% expected) and June is revised to -0.5% from -0.3%. July capacity utilization was 0.4 worse than expected at 77.1%. June is revised to 76.9% from 77.2%. Why would capex boom with 77.1% capacity utilization? And those that believe much of that unused capacity is obsolete don’t seem to realize that new capex, actually a historic capex boom, is occurring on a different continent.

The main reason for econobulls getting jiggy is the better than expected housing starts and permits. As we keep harping, housing starts greatly outpace sales, which means inventory building at the top of (if not a bubble) a long, historic run in housing. Plus permits keep soaring. If Easy Al continues to keep interest rates at emergency levels, and industrial loan demand stays soft, bankers and other financial entities will eagerly supply loans to builders. And builders will gladly take money and build, regardless of market fundamentals. You’d think more people would under stand the concepts of sated demand and borrowing future economic activity for immediate gratification.

-END-

But, there is no inflation!

WASHINGTON, Aug 18 (Reuters) - BellSouth Corp. said on Wednesday its new labor contract had triggered a $3.3 billion increase in its estimates of future retiree medical costs, reducing fourth-quarter earnings by 3 cents to 4 cents a share.
BellSouth spokeswoman LeAnn Hansen said the company was still calculating the effects of the increase on earnings beyond the fourth quarter. Analysts had estimated on average that BellSouth would earn 49 cents a share, according to Reuters Estimates.
The change raises BellSouth's total retiree medical benefit obligations by about 46 percent to roughly $10.5 billion from estimates calculated at the end of 2003….-END-

Lois Ringel thought some Café members might have an interest in some history:

I am giving you the main link for this article. There are various references to gold in different segments of links in the boxes (I - VI ) I have taken the following quote from the 1932 - 1933 section. It is unbelievable how much of this context shadows what is going on today. Although this article is very long, a quick synopsis can be done by clicking each link and just reading side notes in each one. Would be a very interesting link for Midas..
Best,
Lois

Click here: Great Depression, Collapse of governments

France and England had at last recognized their policy errors, by U.S. political stupidity remained in full force and effect.
However, the war debts were one of the fundamental causes of the Great Depression, and a discharge in bankruptcy was now the only way out. At least, at the Lausanne Conference, Britain and France had recognized the error of their political policies and demonstrated a willingness to correct their past errors. But U.S. political stupidity remained in full force and effect.

The available supply of gold was sufficient for financial needs as long as trade restrictions are not so high as to force settlement of financial obligations by exporting gold instead of goods

-END-

I was talking to a devout Christian Café member about Mahendra this morning and he brought some thoughts to my attention. I asked him if he would write them down and send in for the MIDAS as I have spotlighted the "M" man of late. This is for clarification purposes for various members only, not to open up email discussions on the merits of these comments (have no time for it).

Bill,
Some café members may wonder why you give any mention of an "out of the box" type of seer like brother Mahendra. Especially those of a more religious bent. Well maybe they might consider a little history. (Also consider the veracity/sincerity of many of the Wall Street seers, oh sorry; to be doctrinally correct I should call them "analysts").

The "wise men" who were the FIRST to arrive (brought gifts and recognized the Messiah -some 30 years before he even went public about Himself!), were actually Babylonian astrologers (Strong’s #3904, "magos" (word of Babylonian origin)) and most likely descendants from the mentoring/teaching/training centers originated by the great seer Daniel! I believe it is still a valid BUT delicate art today.

I am NOT flat out condoning astrology as the preferred way of guiding ones every move, NO NO. But one shouldn’t throw out a valid art just because there are many misguided/dishonourable folk practicing it for ill-gotten gains. Every area/facet of human life; spiritual; physical (air, water, food); social/political; financial/commercial (now there’s your specialty); and intellectual/scientific, has been CORRUPTED by the fall of man.

So it is imperative and the responsibility of each individual to make an effort to discern "truth from a lie", remembering that even their most trusted leaders are still fallible.

Consider that there was a time when the "Church" taught that the Earth was flat, and those that taught otherwise did so at risk of death! So I always try and follow the Masters advice, "You shall know them by their fruits". This does not mean that Mahendra’s every call has to be correct (it never will be), but in what kind of SPIRIT does he offer it!

As an aside, the Master also said "Blessed are the peacemakers". The fruit of past president Jimmy Carter sure comes to mind as a great example. The current administration …. well I do have to wonder how time will evaluate that.
Keep Well & Stay True,
Buena Fe

Speaking of peacemakers and the most critical issue of the day, the following AP story is stunning and very relevant to the gold world. As Café veterans remember, a GATA contingent met with the Speaker of the House, Dennis Hastert, on May 10, 2001 to go over the manipulation of the gold market. It is a long story what occurred that day, etc, after a very positive meeting and to be repeated at another time. We gave The Speaker a copy of our lengthy, bound Gold Derivatives Crisis Document which I then distributed the next day at the offices of all the Senate and House banking committee members. One of the those members was Nebraska Congressman Doug Bereuter. He could not have been nicer.

Before the Iraq War started, I spent some time in the MIDAS commentary saying I felt it would become the biggest blunder in US history. It cost me dearly with many conservative Café members, a small number of which are no longer members. The reason I felt it important to bring this up then is that it seemed to me an ill-advised Iraq intervention would seriously affect US prestige, US government deficits, the morale of the American people, the US dollar, bring about too many US soldier deaths, etc. In addition, knowing how and why the US administration was lying about gold, it also seemed to me they were probably lying about the real reasons we were going to war (lying or not, the reasons DID prove to be bogus). Were these developments to occur (which they have), it once again seemed to me they would eventually have an enormous impact on the price of gold. Can’t see how this will not be the case in the months ahead. Meanwhile, Congressman Bereuter:

LINCOLN, Neb. (AP)--A top Republican U.S. congressman has broken from his party in the final days of his House career, saying he believes the U.S. military assault on Iraq was unjustified and the situation there has deteriorated into "a dangerous, costly mess."

"I've reached the conclusion, retrospectively, now that the inadequate intelligence and faulty conclusions are being revealed, that all things being considered, it was a mistake to launch that military action," Rep. Doug Bereuter, R-Neb., wrote in a letter to his constituents.

"Left unresolved for now is whether intelligence was intentionally misconstrued to justify military action," he said.

Bereuter is a senior member of the House International Relations Committee and vice chairman of the House Intelligence Committee. He is stepping down after 13 terms to become the president of the Asia Foundation effective Sept. 1.

The letter, sent to constituents who have contacted him about the war, was reported by the Lincoln Journal Star in its Wednesday editions.

In 2002, Bereuter had spoken out in support of a House resolution authorizing the president to go to war.

President George W. Bush has continued to argue the war was justified because Saddam represented a threat to the U.S., his neighbors and the people of Iraq.

In addition to "a massive failure or misinterpretation of intelligence," Bereuter said the Bush administration made several other errors in going to war despite warnings about the consequences.

"From the beginning of the conflict, it was doubtful that we for long would be seen as liberators, but instead increasingly as an occupying force," he said.

"Now we are immersed in a dangerous, costly mess, and there is no easy and quick way to end our responsibilities in Iraq without creating bigger future problems in the region and, in general, in the Muslim world."

Bereuter said as a result of the war, "our country's reputation around the world has never been lower and our alliances are weakened."

Lincoln City Council member Jeff Fortenberry, a Republican, is facing off against Democratic state Sen. Matt Connealy to replace Bereuter said.
(END) Dow Jones Newswires
08-18-04 1152ET(AP-DJ-08-18-04 1552GMT)

Around 950 US soldiers are dead thus far in the war. What is not discussed much in the media is 6500 US soldiers have been wounded, a decent number of which no longer have one of their limbs. How many of them are related to those gung-ho neo-cons in Washington who got us into this mess?

Producer gold de-hedging gathers pace in Q2
Our Bureau
Mumbai , Aug. 17

PRODUCER de-hedging of gold accelerated in the second quarter of the year as reflected in the slashing of outstanding producer hedge positions by 3.4 million ounces (106 tonnes).

In its latest hedging report, the London-based GFMS Ltd, a reputed precious metals consultancy, attributed the marked decline in the hedge book to reduction in nominal contract volumes.

Apart from the ongoing delivery into existing positions and buybacks, the two other major events in the June quarter were the AngloGold-Ashanti merger, which resulted in the integration of the industry's third and fifth biggest hedge books to create the world's second largest hedge book; and secondly, Newcrest's book restructure, the consultancy said.

Realised prices (for all the companies that reported this data) averaged $387 an ounce - roughly $6/oz lower than the period average spot price.

Prices ranged from a low of $322/oz to a high of $447/oz with just over 60 per cent of mine production delivered at prices lower than spot.

Producers with hedge books achieved a weighted average price of $385/oz (close to $8/oz lower than average spot), while their unhedged counterparts secured an average of $394/oz (or $1/oz higher than spot), the GFMS release said.
-END-

More confirmation the producers cut back their hedging substantially in the second quarter. More proof the cabal was the main depressant of the gold price in the second quarter, as their selling precipitated the specs dumping their long positions. Had it not been for The Gold Cartel, the producer back backs would have cushioned the gold setback in the second quarter and not turned many of the specs into shorts, shorts that were subsequently buried.

It is important to keep in mind the mainstream gold world used to cite gold producer hedging as reasons for gold’s failure to advance. Even when that was nonsense, this was the "official" explanation given. Now that gold falls when the producers are covering, the ninnies remain silent. The whole affair has been a SHAM for a very long time. Sick of it yet?

On a positive note, we KNOW from our sources the Arabs are buying physical gold. With oil poised for $50 per barrel, it would make sense for them to be VERY aggressive accumulators of gold anywhere around $400. They are raking in the bucks for their expensive oil. Are they going to increase their dollar holdings? Don’t think so. Historically, they have loaded up on gold when the oil/gold price ratio fell below $11 to $13. I know this from a former client my brother Tim and I had from Afghanistan. There is every reason to believe the Arabs and the East will load up all the gold they can down here.

The gold shares showed modest signs of life with the XAU up .56 to 90.41 and the HUI 2.10 higher at 196.86. Beaten up Golden Star Resources led the way following an upgrade from Nesbitt Burns and a bout of short-covering. Recently I suggested GSS was a "steal" at $3.70. Looks like the case so far. It closed at $4.27, up 30 cents or 7.56%. No reason for Golden Star not to be a high flyer again like it was late last year.

GATA BE IN IT TO WIN IT!

MIDAS

Schön, dass wieder alles funktioniert. Einer der Gründe in Edelmetalle
zu investieren besteht darin, dass die Geldmenge ständig erhöht wird
und so der reale Wert des Geldes, z.B. des Dollars, ständig sinkt. Im
Forum wurde schon des öfteren darüber diskutiert, dass Alan Greenspan
mit seiner lockeren Fiskalpolitik die Spekulationsblase der 90 er Jahre
erst ermöglicht hat. Für alle, die es interessiert, eine Tabelle mit der
Geldmengenentwicklung seit 1959.

http://www.federalreserve.gov/releases/H6/hist/h6hist1.txt

Gruss

Warren

Warren oder auch jeder andere,

was bedeutet M1, M2 und M3 genau?

Danke für euere Erklärungen.

extrel

Hallo extrel,

Die Geldmenge M1 besteht aus dem gesamten Bargeldumlauf
ohne Kassenbestände der Kreditinstitute und Sichteinlagen inländischer
Nichtbanken.

Die Geldmenge M2 besteht aus M1 und allen Termineinlagen in-
ländischer Nichtbanken mit Befristung unter 4 Jahren.

Die Geldmenge M3 setzt sich aus M2 unter Einbeziehung der Spar-
einlagen mit dreimonatiger Kündigungsfrist zusammen.

Ob diese Definitionen für Amerika auch zutreffen weiss ich nicht genau.

Gruss

Warren

"Wir erwarten für den Goldpreis weiterhin eine Handelsspanne zwischen 372 und 410 Dollar", erklärt Ralph Acampora, oberster Charttechniker von Prudential Securities. Jetzt könnte die Stimmung für das gelbe Metall nach dem Durchhänger der zurückliegenden Wochen wieder ins Positive drehen.

Mit der Verunsicherung der Anleger durch die schwachen Weltbörsen der vergangenen Tage zeigt der Goldpreis eine aufsteigende Tendenz. "Angeheizt werden könnte die Nachfrage durch politische und wirtschaftliche Unsicherheiten sowie die anhaltende Schwäche beim US-Dollar", analysiert Graham Birch. Der Manager des Merill LIIF World Gold Fund, das beste Produkt im 5-Jahres-Vergleich, sieht darüber hinaus einen deutlichen Anstieg der Goldnachfrage der Verbraucher: "Das World Gold Council schätzt, dass sich die robuste Nachfrage von Seiten der Schmuckindustrie in den Schlüsselmärkten fortsetzen wird". Die langfristigen Fundamentaldaten für den Goldmarkt sind nach Birchs Meinung weiterhin intakt: das geringe Angebot aus den Goldminen, die Auflösung von Absicherungspositionen der Goldproduzenten und die steigende Nachfrage von Anlegern. HF

Übersicht über Gold-Fonds, Stand 8/2004 (in EUR)

Fonds / ISIN / Fondsvolumen in Mio. EUR / Wertentwicklung 1 Jahr in % / 5 Jahre in %

Merill LIIF Wld Gold A / LU0055631609 / 1469,96 / 5,2 / 175,9
AIG Equity Fund Gold / CH0002783535 / 49,1 / -3,3 / 144,6
PEH Q-Goldmines / LU0070355788 / 38,6 / -1,2 / 112,5
Capital Invest Gold Stock A / AT0000857040 / 22,7 / -0,1 / 66,4
Sogelux Eq Gold Mines AC / LU0006229875 / 9,3 / -8,3 / 62,1

Quelle: Focus Money, Nr. 35, 19.8., S.44

Hier noch ein interessanter Link,aus dem Forum von "dottore

http://www.federalobserver.com/archive.php?aid=7849

Grüsse

Kalle

August 19 - Gold $406.60 up $2.60 – Silver $6.80 down 1 cent

Argentina Buys 42 Tonnes Of Gold In First Half Of This Year

The moment one definitely commits oneself, then providence moves too. All sorts of things occur to help one that would never otherwise occurred. A whole stream of events issues from the decision, raising in one's favor all manner of unforeseen incidents and meetings and material assistance which no man could have dreamed would have come his way. Whatever you can do or dream you can, begin it. Boldness has genius, power and magic in it. Begin it now...Attributed To Goethe

GO GATA!!!

With every reason in the world for gold to be $500 bid, it did manage to give us the gap opening we have been looking for, coming in $2 to $3 higher as advertised in this column. Then, as always, the increasingly desperate Gold Cartel put up their DO NOT PASS GO sign and that was it. Gold did make a marginal new high after the first hour, however, it was immediately thrust back to where it was right after the opening, which is where it closed, even after oil SOARED! It should be apparent to even the brain dead the US Government and friends are doing all they can to keep the price of gold subdued.

The big news of the day is Argentina announced it bought 42 tonnes of gold in the first six months of this year. This is HUGE in that it signals a sea change concerning central bank liquidation. All we have heard about for years is selling by central banks. The ones that have done some buying rarely make an announcement such as this. The amount is not insignificant as it represents 1/10th of what the European signatories in the Washington Agreement are allowed to sell for the entire year. It is also important in that it might influence other central banks to follow suit.

And, of course, this shines more light on just how corrupt and deceitful The Gold Cartel is. We know the gold producers were major buyers of gold during the first half of the year. Now, we find out just one central bank bought about 1.7% of the total yearly mine supply.

If the gold industry was worth a dork, they would be jumping up and down about who did the selling, and why, to suppress the gold price. Since the leaders of this industry and their main organization, the World Gold Council, have as much gumption as a bunch of scarecrows, nothing will ever happen in this crucial regard.

BUENOS AIRES, Aug 19 (Reuters) - Argentina's Central Bank confirmed on Thursday that it bought 42 tonnes of gold in the first half of the year in its strategy to diversify reserves after the end of the peso's one-to-one peg against the dollar in early 2002.
"We were positive about gold," a Central Bank official told Reuters on the condition of anonymity. "We thought that in this international context with a war going on and the price of oil going up, we were relatively positive in relation to gold."

The official said gold now accounted for less than 3 percent of Argentina's total foreign reserves. A little more than 20 percent of reserves are now in non-dollar assets, which he considered a "reasonable" level.

He said the Central Bank had not yet decided if it would accumulate more gold.

"We are in this precise moment deciding the benchmark of the administration of reserves," the official said.

-END-

The Russians continue to build their gold reserves too:

MOSCOW (Dow Jones)--The Russian central bank said Thursday that its level of foreign exchange and gold reserves rose $600 million to a record high of $89.6 billion in the week ended Aug. 13. –END-

Only the dummy western central banks are sellers, conned into a duplicitous gold selling scheme by former US Treasury Secretary Robert Rubin and our Fed (soon after Greenspan took a Board seat at the BIS in Switzerland). When gold shoots for the moon, they will look more than foolish. Of course, many of these short-sighted central bankers will be long gone by then, having been put out to pasture.

Don’t know about you, but I am sick and tired of being disgusted and peeved to no end at the price manipulators. This morning I was pumped. All was as it should be. Even the senior gold shares, led by a surging Newmont, were on fire. Then, nothing for the gold price for the rest of the day. Oh for the time when the cabal swine are buried! [Blockierte Grafik: http://www.goldseiten-forum.de/images/smilies/biggrin.gif]

You get some idea what kind of effort The Gold Cartel is making when viewing the open interest which leaped 5320 contracts, or more than 10,000 contracts in just two days. This represents massive selling by the crooks in an effort to control the price, as the specs pile in and oil streaks for the moon.

Irrespective of the price-capping, the gold chart gains more power by the day:

December gold
http://futures.tradingcharts.com/chart/GD/84

Silver ran up to $6.91 soon after the opening and that was it for its positive price action also. Profit taking set in from there on in. Not much to add except the open interest jumped 1576 contracts to 97,685.

The John Brimelow Report

Middle East, Argentina: Thanks, WGC

Thursday, August 19, 2004

Indian ex-duty premiums: AM $5.31, PM $6.47, with world gold at $404.20 and $405.45. Adequate for legal imports. This is basis Bombay; but the other Indian cities Reuters reports show similar results. Surprising, given the rise in world gold; maybe Festival season demand is starting to appear.

TOCOM officials reported gold futures volume today, 18,915 TOCOM lots equal to 6,081 Comex, traded below 20,000 lots for the first time since September 2cnd, 2002. It was also 69% down on yesterday. TOCOM speculators have no faith in US$ gold it seems, and considerable confidence in the yen. The active contract closed unchanged and world gold was 25c below NY at the end. Open interest was static (-33 Comex contract equivalent). (Yesterday NY traded 35,599 contracts; open interest rose a comparatively steep 5,320 lots. Open interest has now risen 13,876 contracts or 1.387 Mm ozs - 43 tonnes - this week, with Comex gold going up only $5.30.

Oddly, the Tokyo kilo bar premium, refreshed today by Reuters, is a fairly respectable 50c. This suggests that physical, perhaps jewelry, demand is reasonable, even if the appetite for leveraged futures positions is low. Premiums around the Far East are consistent with moderate appetite, except in Hong Kong. Shanghai is trading at a discount.

The Dubai kilo bar premiums which can be derived from the Standard London website

http://www.standardbank.com/PreciousMetals/home.asp

(a total of 12 readings this morning – it updates every half hour) are very high, mostly in the $1.25 -$1.50 range. They are distinctly higher than normal over the past month, despite gold’s exuberance today. While one is not entirely confident about this vantage point, this news does square with the idea of heavy Middle Eastern buying coming in, facilitated no doubt by the Oil price.

The idea that initiative has shifted to the Eastern physical market perhaps explains the confusion amongst the commentators, who seem to be at a loss to explain gold’s stealthy upward creep.

The news that the Argentine Central Bank has started rebuilding a gold position seems similarly to have bemused observers. As none of them appear to remember, Argentina followed Australia in 1997 in the parade of Central Banks routing the gold market by announcing heavy sales (in this case, virtually all the country had). Since then, Argentina has experienced a serious FX crisis, which makes it surprising to see the country straying off the Dollar plantation. Further, and astonishingly, Reuters has subsequently carried an interview with an anonymous Argentine Central Bank official extolling the move as a prudent investment decision:

"We were positive about gold," a central bank official told Reuters on the condition of anonymity. "We thought that in this international context with a war going on and the price of oil going up, we were relatively positive about gold."

Apparently this is part of a diversification decision:

"During the era of convertibility, we practically had 100 percent of reserves in dollars," the official said. "Once convertibility was abandoned, the central bank decided to modify the proportion that it had in dollars and we began diversification." In addition to gold, the central bank has bought euros, Japanese yen, British pounds and Swiss francs."

It is difficult to recall the last time a Central Bank spoke positively about gold’s role in a FX Reserve portfolio, except cosmetically in the context of selling.

The World Gold Council, which broke the news, claims to have known about this all along.

"The purchases were reported by the IMF every month and we have tracked them -- we know that they (Argentina) bought varying amounts in January, February, March, April and May," WGC senior economist Jill Leyland told Reuters."

Gold’s friend’s will appreciate the characteristic moral courage and dedication to gold owners shown by the WGC in failing to ensure that this positive information, supposedly in the public domain, got appropriate publicity.

JB

The World Gold Council is beyond worthless. Any company contributing $3 per ounce of gold production ought to have their head examined. Shareholders in those companies ought to vigorously protest this outrage.

CARTEL CAPITULATION WATCH

The dollar fell .33 to 87.82 and the euro gained .41 to 123.64.

08:30 Jobless claims for w/e 8/14 reported 331K vs. consensus 335K
Prior week revised to 334K from 333K.
* * * * *

DJN: *DJ US Aug 7 Continuing Claims +16K to 2,904,000 EOM
* * * * *

10:30 EIA reports natural gas inventories +78bcf vs. consensus +80bcf
For reference, the year-ago data was +77bcf. September natural gas futures are currently trading slightly higher in reaction to the data.
* * * * *

12:00 August Philadelphia Fed index reported 28.5 vs. consensus 30
Prior reading was 36.1.
* * * * *

Philadelphia Fed Manufacturers Report Slower Pace of Growth

PHILADELPHIA, Aug. 19

Activity in the region's manufacturing sector continues to expand, according to firms surveyed for this month's Business Outlook Survey. Most of the survey's broad indicators of activity, however, suggest a more moderate pace of growth than in July. Indicators for new orders, shipments, and employment remained positive but fell from their readings in July. Firms continue to report a rise in prices for inputs and for their own finished goods. Despite the decline in the survey's indicators for current activity, expectations for general growth over the next six months remain very positive….. –END-

That lower pace of growth was with oil some $9 to $11 (33%) a barrel cheaper than it is today. It is generally acknowledged the sharply increasing oil price is a drag on the US economy. If so, what are the August and September economic numbers going to look like?

If it weren’t for the PPT goosing the US stock market, you have to wonder what the DOW and DOG would be selling at today – what with oil soaring and Iraq falling apart.

Perhaps one reason the skyrocketing oil prices have not made a large impact yet on US consumers and stock players is that gasoline prices have been substantially lagging the oil price increases. In many cases gasoline prices (for some reason) have not gone up at all the past few weeks. This is important to keep in mind because it is gasoline prices (and heating oil prices in winter) which the consumer reacts too, not what WTI is selling for in Oklahoma. This tells me the consumer is going to experience some sticker shock in the weeks ahead and curtail other spending.

Meanwhile, while the low-life bums in New York and Washington capped gold in the most blatant of fashions, crude oil went berserk, closing at $48.70, up $1.43. One of the reasons why:

14:40 Militants set fire to Iraqi South Oil Co. buildings
Al-Sadr loyalists reportedly broke into the oil company compound and burned the warehouses and equipment to the ground, according to the report. The fire then spread to the company offices.
* * * * *

Only a matter of time before THIS has a major impact on consumers around the world:

September crude oil
http://futures.tradingcharts.com/chart/CO/94

Incredibly (that is if you never heard of the PPT) the DOW only closed down 42 to 10,040. At one point it crashed through 10,000, however, the price manipulators, having done their thing on the Comex, rushed in to save the day and turn the DOW around. The DOG lost 11 to 1820. This US stock market has become a joke. It won’t be too funny to the investors when it collapses and investors find out they were conned into investing into an illusion – an illusion fostered by Orwellians manipulating markets behind the scenes. What a disaster it is going to be when this all blows up!

There were rumblings today that Fannie Mae is having trouble with its derivatives positions. This is just one more reason The Working Group on Financial Markets has The Gold Cartel working overtime to stop gold, if they can. A streaking gold price could set off a derivatives neutron bomb in either the interest rate or gold market, or in both. The bad guys must be extremely nervous at the moment with oil flying, the one market they cannot control. Should the unexpected happen and oil was to take out $50 per barrel, bells and whistles are going to start flashing in the derivatives markets and put the PPT crowd in a monster sweat.

GATA’s Mike Bolser:

Hi Bill:
The Fed added a whopping $19.25 Billion in temps today August 19th 2004, an action that hardly changed the repo pool's ma but jumped the pool total up to $50.765. The DOW's 30-day ma is still dipping to new lows for the move and the pool's ma likewise is rolling over from its linear phase (although this move is VERY early). The DOW is weak at this hour 11AM and that suggests the Fed isn't getting the old bang for their repo bucks. What the Fed HAS done well is squeeze the bond market into submission using "policy puts" with the 30-year tracking at 5.0% in a flat line condition.

I have updated my site to include additional charts some of which are based upon proprietary and synthetic metrics and will move to a subscription basis with a new gateway site in Early September:
http://www.pbase.com/gmbolser/root
Failure mechanism

I reported yesterday that the Fed had decided to hold $400 by oscillating above and below that value while doing the opposite with the MCDI (major currency dollar index). A proprietary metric shows this pattern and even gave some lead time to it. Today's action continues to show the Fed's efforts in this regard but it is interesting to note the Fed has used most of its predicted up range in my metric.

We see a pattern today of a fairly big move in gold but barely any dollar change. IF my interpretation is correct, the Fed has relaxed their hold to the top of their mini-cycle range and, in order to maintain its oscillation above and below $400, will add down pressure very soon, say, early next week. If this doesn't happen then the Fed may retreat to a higher DIVG defense level. It is a time of change for the Fed. Can they hold?

I have data that shows what happened the LAST time the Fed decided to retreat higher (note that the Fed has altered their historical MCDI data and only if one has recorded it daily can it be reliable). On July 21rst 2003 the Fed failed in its gold manipulation (likely due to a high gold loss RATE) and retreated upward in the DIVG. On that day gold shot up over $5 but the dollar hardly changed at all thus jumping the DIVG out of control. The Fed then chose for its upward retreat slope the exact upward tilting linear regression line of the previous 6 months.

Even if today's jump is just a blip, the Fed's ultimate failure will be signaled by a big gold move AND no change in the dollar. It is this kind of action to which we must be sensitive.

No matter what the Fed imagines their control status to be, the market of physical buyers is growing and that group will overwhelm the Fed at the least expected time (including some central bankers who surprise the Fed and abandon the cartel). The government's Wall Street acolytes may be able to short the gold shares of highly liquid miners, but they can't manufacture gold or silver.

More on strategic oil

August 18, 2004, 8:56 a.m.
Oil: Fear vs. Fact
The petroleum market is climbing a wall of worry.

http: /www.nationalreview.com/nr...180856.asp

"Speculation pervades the oil market, with fear of a supply outage pushing oil prices to $46 a barrel ‹ a record level. This price reflects a premium of $18 to $22 above what supply-and-demand fundamentals can satisfy.

Historically, the relationship between oil prices and industry-held oil inventories explained more than 90 percent of the moves in oil prices: Whenever inventories rose, oil prices fell (and vice versa). However, the relationship broke down this year. Even though inventories have built strongly, oil prices have soared.

In the past, inventory levels of 295 million barrels ‹ the current level have dictated an oil price in the range of $24 to $28 a barrel. The difference between this price range and the current price represents a fear premium that supply with be insufficient to meet demand." END

Mike: The writer forgets that "oil inventories" may be physically high while the contained oil has already been sold forward. Exactly the same scenario in central bank gold as central banks claim 33,000 tonnes of vault gold while they actually have sold 15,000 tonnes of it forward.
++++++++++++++++++++++++++++++++++++++++++
And we also see that refinery production is slipping:

US refining capacity, product demand not rising in step

By Oil & Gas Journal editors
HOUSTON, Aug. 18 -- US refining capacity has not kept up with increasing demand for petroleum products. Some within the industry view this decline as being driven by fundamental refining trends as well as the globalization of product trading.

This view, however, "holds that the US refining capacity situation is the inevitable result of a global market for petroleum products, as well as the decline in domestic crude production," according to a report released Tuesday by New York-based Petroleum Industry Research Foundation Inc.

(PIRINC) entitled, Refining Capacity: Challenges and Opportunities Facing
the US Industry. END
++++++++++++++++++++

I continue to believe that the SPR has been drained as today we push through $48 per bbl. The Wall Street propaganda that high oil and resultant trade deficit explosions aren't a problem tells us that they ARE a problem even as the states reduce their fuel taxation giving voters the temporary illusion of cheaper oil. These actions are NOT the moves of a government in control of its Strategic Petroleum Reserve inventories. On the contrary, the recent market developments continue to say that there's no more oil left to sell out of the SPR.
Mike

From The King Report last night:

The Boston Globe reports Bank of America will lay off hundreds of tellers and other employees at Fleet bank branches. The layoffs commenced Wednesday. A Fleet manager estimates at least 1,500 people will lose their jobs…But now then can move from the Establishment Report to the Household Survey or stay within the Establishment Report’s B/D Rate by becoming self-employed. -END-

Bernie Schaeffer calls attention to the ongoing market manipulations again:
http://www.schaeffersresearch.…bservations.aspx?ID=10876

A heads-up for you:

China Reform Monitor No. 557, August 18, 2004
American Foreign Policy Council, Washington, DC
http://www.afpc.org

Editor: Al Santoli
Associate Editors: Miki Scheidel, Lisa-Marie Shanks

RISING SINO-JAPANESE TENSIONS THREATEN ASIAN STABILITY;
NEW "HIGHLY-ACCURATE" PLA GUIDED MISSILE

August 8:

China is steadily increasing its political, economic, and military pressure on Japan, subsequently heightening Sino-Japanese tensions, reports the Taipei Times. The sovereignty conflict over Tiaoyutai (Senkaku Islands) and the repeated encroachment of Chinese survey ships in Japan's territory in the East China Sea has played a part in a rapid increase of nationalism in both countries. In addition, China's ongoing military development forced Japan to amend its Constitution to allow for a more liberal use of military power [See Asia Security Monitor No. 86]. The increased Sino-Japanese tension will speed Japan's military reform and promote military cooperation with Taiwan and the U.S.

August 10:

The Chinese Communist Party's Central Military Commission, in which ultimate control of the military resides, will be expanded to co-opt the commanders of the air, naval and missile forces, reports the Singapore Straits Times. In an overall restructuring of top command structure, China appointed two experts - Lieutenant-General Xu Qiliang and Vice-Admiral Wu Shengli - well versed in anti-aircraft carrier warfare to head the People's Liberation Army (PLA) General Staff Department (GSD). The GSD - which has been dominated by the army for decades - is responsible for planning and executing war plans. The two new deputy chiefs of staff are deeply involved in war preparations against Taiwan, having spent a large part of their careers in air force and navy units based in Fujian, the Chinese province nearest Taiwan.

August 13:

A new detailed analysis by the U.S. International Trade Commission reported that the trade position in every domestic manufacturing sector worsened last year and is rapidly losing ground to China, reports Manufacturing News. The ITC analysis stated that some key U.S. manufacturers suffered "severe deterioration" in international markets. Although U.S. exports increased by $21.8 billion in 2003, imports soared to almost five times that amount - reaching $1.3 trillion - causing a U.S. manufacturing deficit increase of $73.5 billion.

ITC suggests that since its entry into the World Trade Organization (WTO), "China has drawn production away from the United States, Mexico and many Asian countries primarily because of low labor rates and government policies promoting foreign investment." U.S. imports of computer products from China increased by 48 percent last year. In addition, major U.S. computer manufacturers such as Dell and Hewlett-Packard as well as the largest contract manufacturers in the world, especially from Taiwan, have shifted substantial operations to China.

August 17:

China has successfully tested a new guided missile that the official China News Service claims is highly accurate, reports China Daily. The missile, developed by the China Aerospace Science and Industry Corporation, "accurately hit its target with a high degree of precision," said project researcher Feng Dawei. He added that his fellow researchers were committed to, "realizing the grand task of reunifying the motherland." China's Minister of Defense and Vice-Chairman of the powerful Central Military Commission, Cao Gangchuan, attended the test and praised the researchers for having made a "huge contribution."

-END-