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

As the day wore on, the euro was really clobbered, closing at 132.52, down 1.64. However, it made a low of 132.08 and was trading near that level when gold closed on the Comex.

March euro (plunged and filled its gaps on the downside)
http://futures.tradingcharts.com/chart/EC/35

While this gold charge and retreat is tiring, it is perfectly normal action following the huge sell-off from $455 and the resulting spec liquidation. The standard for gold to complete a bottoming pattern is two weeks on these spec flush outs. Traditionally it takes that amount of time to compose itself before making a sustained move higher again.

AM Fix $441.25
PM Fix $439.50

One of the aggravating aspects of watching gold trade on a daily basis is seeing the extent to which The Gold Cartel is leaning on the price relative to foreign currencies. Because of the price suppression scheme, the price of gold in euros lagged on its way up to $455 and then tanked when the US gold price collapsed. This becomes apparent when viewing gold versus the pound too:

February gold
http://futures.tradingcharts.com/chart/GD/25

March British pound
http://futures.tradingcharts.com/chart/BP/35

This morning the pound was at its highs and gold was $14 off its highs of a couple of weeks ago.

The dollar closed at 82.62, up .86. The pound fell 1.12 to 192.02.

Gold left two gaps on the downside on Monday and Wednesday. It filled the latter today, by wiping out yesterday’s gains. If gold holds this area, like I expect, it should shoot for the big one it left on the upside.

Early in the trading game today, gold was holding its own and rebuffing the dollar gain as physical market pricing supported the price. However, the euro fall became so pronounced that funds and locals pounded the short side. Gold finally caved in before rallying $1 on the close as locals covered.

A local outfit named Crown bought 4,000 Feb $400 gold puts for 50 cents. Don’t know what that is all about.

The gold open interest rose 4047 contracts to 320,076. Tomorrow’s COT numbers should be quite interesting.

Have no idea what’s going on with silver. It is disappointing to see the warehouse stocks beginning to build. They have risen to 104,536,159 ounces over the past week. The silver open interest gained 327 contracts to 102,098.

The John Brimelow Report (early morning edition)

India unfaltering buyer: Bears look to vacations
Thursday, December 16, 2004

Indian ex-duty premiums: AM $8.39, PM $8.21, with world gold at $442.30 and $441.05. Very ample for legal imports. The rupee finished a little firmer today, at $1 = R43.915. Further strength is confidently expected.

With only a little extra help from the rupee today, Indian buyers, often thought of extremely price sensitive, weathered the c. $5 rise in world gold since yesterday with significant calm. They look set to press world gold higher.

World gold rose smoothly throughout the Asian day, peaking at $442.70, $2.35 above the NY close as Europe opened. It then sold off some $2 until, interestingly, the pre-NY market activated just before 7 AM.

Numerous Commentators are suggesting (hopefully) the inclination of the US “Funds” to go on vacation precludes the possibility of a year end rally. This is simply not a relevant consideration for the key buyers, in India, and the Middle East.

JB

CARTEL CAPITULATION WATCH

The DOW keeps on rising, this time to 10,705, up 14. The DOG took a rest, losing 16 to 2146. The March bond, which is trading at a point discount to December, lost 1 ½ points to 112 17/32, making yesterday’s launch into new high ground all the more mysterious.

US economic news:

08:30 Jobless claims for w/e 12/16 reported 317K vs. consensus 342K
Prior week revised to 360K from 357K.
* * * * *

08:30 Q3 Current Account deficit reported $164.7B vs. consensus $170.6B
Prior revised to $164.4B deficit from $166.2B.
* * * * *

08:30 Nov. Housing Starts reported 1.771M vs. consensus 1.98M; Building Permits 1.988M vs. consensus 2M
Prior Starts revised to 2.039M from 2.027M; Permits to 2.018M from 1.984M.
* * * * *

10:30 EIA reports natural gas inventories (61)bcf vs. consensus (68)bcf
For reference, year-ago data was (134)bcf. Prior week's data was (88)bcf. Jan. nat'l gas futures move lower in initial reaction.
* * * * *

12:00 Dec. Philadelphia Fed index reported 29.6 vs. consensus 20.5
Prior reading 20.7.
* * * * *

14:11 - FOMC minutes indicate that some members see actions becoming more tied to data
The minutes note that "several members commented that policy actions would likely become increasingly dependent on incoming data" and that "this might imply a more gradual path of tightening going forward than that of the last several months...or it might mean that the Committee on occasion would need to firm policy more rapidly". Though these were still minority views, it does appear that the FOMC might be edging away from its recent auto-pilot strategy of tightening unless the data markedly deteriorated, and toward a strategy of letting the data determine when and how much to move.
* * * * *

Hard to understand why this is not a bigger deal:

SEC Tells Fannie Mae To Restate Earnings

Accounting Practices Faulted; $9 Billion Loss Could Result

By David S. Hilzenrath and Carrie Johnson
Washington Post Staff Writers
Thursday, December 16, 2004; Page A01

The Securities and Exchange Commission's top accountant last night told mortgage funding giant Fannie Mae that it should correct its past accounting, a directive that could erase 38 percent of the profit the government-sponsored company has claimed since the beginning of 2001.

Fannie said last month that if it was required to make such a correction, it might have to record $9 billion of previously unreported losses.

"Fannie Mae's accounting did not comply in material respects" with two major accounting rules, the SEC's chief accountant, Donald T. Nicolaisen, said in a written statement. Instead of following requirements, "Fannie Mae internally developed its own unique methodology," Nicolaisen said.

Nicolaisen's statement was a powerful rebuke to District-based Fannie Mae, which had appealed to the SEC after another agency accused it of manipulating accounting estimates to achieve desired financial results and deliberately violating other accounting requirements to make its earnings smoother….

-END-

Greg Pickup made a good point this morning. We hear the consumer is tapped out, with US personal savings at record lows. All true and should have a profound impact some day on the US economy. However, in the meantime the stock market is chugging along and home prices have soared, leaving many Americans with the impression that everything is fine. Their net worth is doing just fine, thank you very much. When the US stock market goes into its inevitable dive and home prices sink, it will be an entirely different ballgame as far as how the US consumer feels.

Sound input:

Good Morning Bill,
I have received many positive emails concerning my missive, which you were so kind to post. So many good, intelligent people within LeMetropole. That goodness in people is something that I need to be reminded of, because thirty years in law enforcement has jaded my view. Too bad our elected officials, wall street and corporate executives don't also share that goodness and desire to do the right thing. I will maintain my cynicism toward them and do what I can to uncover their sinister behavior.

Peter George's recent post is filled with good useful information. I especially enjoyed his recounting of the Plaza Accord of 1985. Realizing the trade deficit was only 3% of GDP then, and it stands at 6% now, tells me everything I need to know about how gold will be propelled much, much, higher. Contrary to all the negative pundits and top-calling analysts, who narrowly focus upon chart formations only, while excluding the valuable underlying fundamentals; it is apparent to me that this gold bull is in its infancy and destined to awe even us gold bugs. A cursory review of gold's gains during 1985 - 1987 indicate about a 70% rise from about $285 - $485. That was with the USD devaluing 50%. Presently, the USD has dropped about 10% and gold has already risen about 55% from about $280 - $435. I am no statistician, so I won't attempt to extrapolate what that means; but, as a lay person it is evident that because the USD is in its infancy for devaluation then Gold is just starting its ascent.

It will be very interesting to watch the cartel attempt to keep both bullion and the shares in lock down mode. Seems to me this pressure cooker is ready to blow. I am feeling very confident that you, Bill, are correct and that the naysayers have an agenda. I don't mean to beat the proverbial dead horse, but during the past two days I have read several more articles about why the mining shares are not performing. It is really sickening to me that they are nitpicked and held to a totally different standard than the negative cash flow NASDAQ darlings, which no one every seems to criticize. One well known gold bug indicated how GSS was held up to x-ray scrutiny during their IAG take over effort, and the analysts didn't like what they saw. He continued on about how the entire industry is suffering from higher costs in their currency, which the rise in dollar denominated gold doesn't begin to offset. Over and over this profitability issue is pounded. BULLSH*T!!! Syllogistically, all the NASDAQ shares with astronomical P/Es should be beaten down, but they keep soaring higher. Those with no earnings should be real bargains, but they keep making new highs. Why are there no pundits top-calling them, and prognosticating their much needed severe correction. Only the mining shares, which should be valued for their reserve assets and not P/Es, are held to this double standard. Incidentally, the P/Es of most of my beaten down shares are all decent and within the realm of value plays! So, the whole earnings, out of favor argument is flawed, and worse, it is contrived. But, I digress.

Thanks again for being there Bill, and many thanks to all the great folks within LeMetropole. It is comforting to know there is this network of like minded people, our own support group. I strongly believe that we will all be vindicated and generously rewarded for enduring this wall of worry. Happy Holidays and Best Wishes for a Healthy, Prosperous New Year.
Rich Caccavale

On Jim Rogers and gold:

Bill,
I had to smile when I read this quote in last night's Midas:

**Here is a small excerpt I received from a Café member who was talking about someone in the know who works for Citigroup, a defendant in Reg Howe’s gold price manipulation law suit:** **"

"Well the other week I was at a similar City function and found myself sitting next to the same person and we started to talk about gold which he thought was a poor investment _because the central banks rigged the market_!!"
---------------------------------

Bill, several years ago I read the following in Jim Roger's first book "Investment Biker." I re-read it every so often, especially on days when I am particularly disgusted with the Cartel's antics. It is particularly appropriate in light of that guy's comment about central banks rigging the market. Rogers wrote:

/"In all my years of investing, there's one rule I've prized beyond every other: Always bet against central banks and with the real world. In the seventies, the central banks were defending the United States' artificially low price of gold. Central banks and governments always try to maintain artificial levels, high or low, whether of a currency, a metal, wool, whatever. Usually these prices are absurd, and the market knows they're absurd. When a central bank is defending something--whether it's gold at thirty-five dollars or the lira at eight hundred to the dollar--the smart investor always goes the other way. It may take a while, but I promise you you'll come out ahead. It's a golden rule of investing. In it's collective wisdom the market always knows that if some people are clinging to an artificially low price of thirty-five dollars, you should keep buying gold at that price.When after thirty-five years the price of gold was finally released, it went up more than it should have because it had been kept low for so long. Such violent movement happens whenever a price has been kept high or low."/ (end of quote)

That guy you quoted confirmed to me, one more time, that I'm on the right track with my gold and silver investments. Funny thing, from what I've read recently, Jim Rogers doesn't believe this present gold market is manipulated. Looks like JR will be late for THIS party!
J. Noble

My friend Bob Bishop has a fine piece up at the Kitco web site:

Fat City? Not Exactly

For several weeks now newspapers and other media outlets have been reporting on the dollar's decline and the corresponding rise in the gold price. Gold has traded as high as $456 and the impression it is making on the uninformed is that things must be awfully good in any sector based on an underlying commodity trading on a 16-year-high. "Things must be amazing in your business right now" is the paraphrased comment I've heard several times in recent weeks. That perception is quite understandable, but as more informed observers know, there are a few other issues that make the reality a bit different. A month ago we proposed a few reasons why gold shares are lagging the rise in gold, and a brief review of that list seems in order; I'll follow that with a fleshing out of this topic, a few additional reasons why gold could be doing so well and the shares could be performing so unevenly….

***

For the entire article, go to:

http://www.kitco.com/ind/GoldReport/dec142004.html

The gold shares continue to act miserably. The XAU lost 1.74 to 98.26 and the HUI sank 5.52 to 213.88.

Gold finally upticked in the Access market after the Comex close, up 50 cents to $437. Then again, the euro rallied 40 points after gold closed.

Gold remains well above staunch support at $430. The cash market is sizzling and shows no signs of let-up. Gold might need to ebb and flow here a few more days. However, the big picture has bullion headed uptown. No later than early January the shares should follow.

GATA BE IN IT TO WIN IT!

MIDAS

Hi James,
This is from Reg Howe’s article titled, Déjà Vu: Central Banks at the Abyss. FYI "gold deposits" do have a specific definition in the international banking world as disclosed in this IMF template. I highlighted an important section in red. Without the ETF defining "gold deposit" I cannot determine the significance of this definition except it gives the cabal more room to conduct nefarious activities. The prospectus uses the term "transfer of gold deposits" so maybe the "gold deposits" and not the bullion are transferred, which sounds really strange since the "gold deposit" is a central bank "gold deposit" and the central bank transfers gold, they do not transfer a deposit.

At this point I am not sure what to make of this so I will leave it with you. I just wanted to be sure you caught the IMF definition of "gold deposit".

The failure to define important terms is as dangerous as the failure to have the right to audit and the failure to insure the gold. I guess if it really is not gold they cannot insure it.
Ron

Die gesamte Marktkapitalisierung aller Silberminenaktien ist 27,67 Mrd. Dollar:

http://news.silverseek.com/Dani/1103299200.php

Dies ist 1/4 von Coca Cola !

Eine sehr deutliche Aussage von Möller, ARD-Börsenstudio:

Laßt den Dollar fallen...

Soll etwa die Deutsche Bundesbank Gold verkaufen gegen Dollar, die dann keiner mehr haben will ? Also wertvolles Edelmetall eintauschen gegen wertloses Papiergeld ...

http://boerse.ard.de/content.jsp?key=dokument_73564

So eine Aussage erhält man nur selten.

Leider sind Stimmen wie Möller, die sich gegen die Goldverkäufe aussprechen, in den Medien zu selten zu hören.

Bullion Desk meldet, daß noch für dieses Jahr die Ankündigung der Buba zu den geplanten Goldverkäufen erwartet wird.

17/12/2004 09:55:00
Bundesbank Gold Sales – Details To Emerge At Last

TheBullionDesk – The Bundesbank seems set to announce further details of its planned gold sales. The second Central Bank Gold Agreement, which started in September 2004, allowed central banks to sell up to 2,500 tonnes of gold over the five years that the agreement runs. Out of this, the Bundesbank is entitled to sell 600 tonnes, however so far no actual commitment has been made by the Bank.

According to Reuters a decision by the Bundesbank is expected to be announced over the coming days. This will help clarify the situation. The gold market is expecting the Bundesbank to sell its full entitlement of 600 tonnes with annual sales of 120 tonnes over the five year period that the agreement runs.

The German government is keen for the Bundesbank to sell the gold as it could help the government reduce its budget deficit. Herein lies the problem, as the former president of the Bundesbank, Ernst Welteke, did not wanted the money raised from selling gold to be used just to pay off debt, instead he argued that the money should go into interest paying assets with the interest being used to fund research and education.

The current Bundesbank President, Axel Weber, has said a decision will be made by year-end. The market generally expects Germany to sell its 600 tonnes, so any such announcement should have little negative impact, however, should they decide not to sell or to reduce the volume, then this could be quite bullish for the gold market.

With other central bank’s possibly looking to diversify their reserve assets and to reduce their dollar holdings, it is quite possible that another central bank, Russia, China, or any number of other Asian central banks may have approach the Bundesbank, this would have the effect of keeping the gold off the market and presumably see dollars sold for euro’s.
http://www.thebulliondesk.com/ReportItem.aspx?Code=wbuba

Asiatische Banken kaufen womöglich das Buba-Gold auf und in Eichels Haushaltsloch verschwinden die Golderlöse auf Nimmerwiedersehen.

Weiter volatiler Goldmarkt (17.12.2004)

Der gestrige Handelstag war erneut recht volatil. Der Goldpreis schwankte dabei innerhalb einer Handelsspanne von 435 US$ und 442,25 US$ pro Feinunze. Weiterhin bleibt der Dollar der wichtigste Einflussfaktor für das gelbe Metall. Nachdem sich der Greenback gestern nach guten Konjunkturdaten auf rund 1,3250 erholen konnte, verlor das Gold an Boden und erreichte das Tagestief. Gute physische Nachfrage führte im Anschluss zu einer leichten Erholung. So ging die Feinunze wenig verändert bei Kursen um 438,50 US$ aus dem New Yorker Geschäft. Die Aufmerksamkeit der Investoren dürfte sich heute auf die Veröffentlichung der Konsumentenpreise in den USA richten. Wir rechnen mit einer Kernrate (ohne Energie und Lebensmittel) von 2,3%. Inklusive der volatilen Energiepreise dürfte die Marke von 3,5% klar überschritten werden.

Die Anzahl der Kundenaufträge hat im Vergleich zu den Vortagen etwas abgenommen, verharrt aber nach wie vor auf sehr hohem Niveau. Im Fokus der Privatkunden liegen weiterhin die Goldmünzen 1 Unze Krügerrand und Maple Leaf sowie Goldbarren ab einer Gewichtseinheit von 100 Gramm. Die prompte Verfügbarkeit einiger Gattungen im Barrenbereich ist unverändert schwierig. Dies hängt mit der allgemein guten physischen Nachfrage in Deutschland zusammen und wird sich wieder entspannen, sobald sich die Hersteller auf die neue Situation eingestellt haben.

Das Silber pendelt weiter innerhalb einer Bandbreite von 6,50 US$ und 7 US$ pro Feinunze. Die spekulativ orientierten Fonds bauen ihre Positionen angesichts des nahenden Jahresendes weiter ab. Daher können wir uns gut vorstellen, dass Silber weiterhin tendenziell zur Schwäche neigt. Viele unserer Kunden sehen dies anders und bewerten die derzeitige Kursschwäche als kurzfristige Korrektur. Die Nachfrage nach Silberbarren 1000 Gramm und 5000 Gramm ist schon bemerkenswert. Zwischenzeitlich ist die Sekundärware etwas knapp geworden. Neu produzierte Barren sind jedoch in jeder Größenordnung verfügbar, haben aber einen deutlichen Preisnachteil.

Palladium erreichte unterdessen ein neues 16-Monatstief mit Preisen um 175 US$. Gerade in den letzten Tagen wurde dieses Metall unter langfristigen Aspekten in mehreren Publikationen empfohlen. Dies können wir unterschreiben, möchten aber darauf hinweisen, dass das physische Palladiuminvestment in Deutschland der gesetzlichen Mehrwertsteuer von 16% unterliegt.

Wir wünschen Ihnen einen erfolgreichen Handelstag

Die gute Nachricht zum Wochenende:

http://www.silverminers.com/publications/showpub.aspx?id=454

Die Verwendung von Silber als Geldersatz in Mexiko, schlägt immer größere Wellen. Diese Idee wurde vor einigen Monaten schon mal diskutiert. Jetzt gibt es den nächsten Schritt: Anscheinend haben 31 mexikanische Gouverneure sowie zahlreiche Journalisten ein Kommunique unterzeichnet, in dem sie einmütig die Monetarisierung von Silber begrüßen ! Die mexikanische Zentralbank ist hochalarmiert und arbeitet dagegen an.

Wenn dies in die Tat umgesetzt wird, haben wir einen Riesenschub bei der physischen Nachfrage !

December 17 – Gold $441.40 up $4.90 – Silver $6.75 up 8 cents

POWERFUL Gold Week!/Unprecedented:$6 Rule Required Three Times In Five Days

I've believed ever since that living on the edge, living in and through your fear, is the summit of life, and that people who refuse to take that dare condemn themselves to a life of living death....John H, Johnson
(American Businessman, founder of Johnson Publishing)

Early to mid-morning MIDAS commentary:

A fairly wild morning. Gold firmed all during the night and early in the European trading session, and against all currencies, reaching $440 at one point, a substantial move up from Thursday afternoon’s Comex close. The London AM Fix, which has been strong all week long despite what Comex did the previous sessions, was $439.20. This substantiates what has been presented to you day after day about the cash market from John Brimelow and me. The physical market is so firm it wants to take the gold price higher in order to ration the available supply. Only market manipulation and price suppression by The Gold Cartel is preventing gold from flying.

Gold was up in early trading, even though the dollar was a bit firmer. Then the CPI number was released and the bonds and currencies went wild, over a predicted number to boot. Bonds were up a ¼ point and quickly tanked, dropping a ½ point+. The euro went from unchanged to down a full point. Gold followed, as it did yesterday, however, the shorts were unable to bring the bullion price down to the unchanged level.

It was clear to gold watchers yesterday that gold was "dragged" down by the euro. The cash market said no to the takedown while the currency gold crowd said yes. With such firm demand by the physical buyers on the price setback to the $435 level, enough was enough, gold refused to collapse. It is important to note that this $435 level has held on three different trading sessions during this phase of the gold correction from $455 – just as the previous $430/$432 support level initially held three times after the $20 mugging.

Correction, maybe?

I received the Russian central bank gold news article yesterday while going to press. After further review, the story could be bogus in that it failed to mention, and include, foreign currency reserves. Actually, as far as their "official statistics" are concerned, Russia hasn’t bought any gold at all.

Yet again? GATA’s Ken Reser make special note of this peculiar quote in the story which leaves their official numbers in question:

"Russia's gold reserves have grown by $44 billion since he year started, Mr. Ulyukayev said. This is a record high for Russia, bringing it to sixth position on world rankings."

Why would Ulyukayev make such a specific comment if it were not so?

Ken goes on to note:

"This brings russia to #6 ranking in the world..this means above swiss with 1600+ T...I will get to the bottom of this yet!"

That specific comment belies the official numbers. Perhaps the Russians are waiting to "officially" convert their TRUE holdings from foreign exchange reserves to gold reserves. Wouldn’t it be something if they were one of the ones lending gold and are waiting to call their gold back, which is why they don’t have them listed as official reserves at the moment. Some intrigue here. Ulyukayev might have let the cat out of the bag.

Meanwhile, the real gold story is taking place behind the scenes and is not reported anywhere but in the GATA camp. Stories continue to surface re the West selling gold and the East buying gold. The foolish central banker sheep in the West continue to dump cheap gold, while the Asians, Indians and Arabs keep scooping it up. The latest news on that score:

17 Dec 2004 13:55

France, Switzerland sell gold under cenbank pact

LONDON, Dec 17 (Reuters) - The Bank of France sold 8.1 tonnes of gold by the end of October this year under the Central Bank Gold Sales Agreement, the World Gold Council said on Friday, citing International Monetary Fund statistics.

It also identified Switzerland as a seller -- saying it had sold 23.6 tonnes of the metal by the end of October.

WGC said that a total of 59 tonnes of gold had been sold so far under the pact, struck in September this year to replace a previous one agreed in 1999. –END-