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

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-

Vietnam's Big Cities Prepare for Gold Trading Centres

HANOI, Dec 17 Asia Pulse - The State Bank of Vietnam (SBV) has given the go-ahead to the gold industry to set up trading centres in Hanoi and Ho Chi Minh City early next year for formal gold trading.

They will be set up by the Vietnam Gold Traders Association (VGTA) whose vice president Nguyen Thanh Truc said the centres would be crucial for monitoring domestic gold trade and prices, especially after the recent long period of price fluctuations. –END-

9000 tonnes of gold reserves, destined to go up: Kamal Nath:

[Business India]: New Delhi, Dec 17 : There is a total of 9000 tonnes of gold reserves in the country, and it is likely to go up to 15,000 soon, Commerce and Industry Minister Kamal Nath said in the Lok Sabha today.

The minister said this while replying to a question from a member Uday Singh about setting up of a committee to examine the regulatory structure of the gold industry.

Kamal Nath further said that India is the biggest stockist of gold in the world and competent enough to determine and fix the yellow metal's price.

He added that nearly 30 lakh people were directly and/or indirectly employed in gold business, and another around 10 lakh people engaged in diamond trade. (ANI) Newkerala

-END-

Of course, we already know how the Chinese are gearing up their own domestic market for the same.

It is said the Germans are going to announce their gold sale plans next week. This will officially put the French, Germans and Swiss on the sell side. The bullion dealer crowd will surely flaunt this gold sale talk and ensures it receives as much press play as possible. However, what none of them will mention is whether or not any of the French, German and other European gold to be sold is actually leased gold, physical gold which has already been fed into the market place in years past, to be converted into sales on the books.

To repeat: a key to understanding the gold market and why the price MUST go much higher in the years to come is to know what GATA knows and that is half the central bank gold is not there anymore. There are approximately 13,000 less tonnes in the vaults of the central banks than the establishment claims they have. Some in our camp are adamant the central banks have even less than that number. At some point in the future this will have to be declared in some way (as the Portuguese have already done). Additionally, many central banks will find it imprudent to sell any more gold (trend followers that they are) and will have to deal publicly with the leased gold issue before any scandal breaks regarding their country’s gold reserves. Like other scandals, the gold scam will only surface after the fact – in this case it will be a soaring gold price (the Enron scandal, for example, only really broke after that firm was going belly-up).

We might be at that point now (western central banks rethinking their gold sales policy), or at least about to enter into this phase of gold market history. For review of this issue, please read the Frank Veneroso central bank gold analysis in the MIDAS missive on Sunday, December 12.

Once you come to know there is a 1500+ tonne annual supply/demand deficit and that half the central bank gold is gone, you realize where the price of gold must go and why.

It will be comical in the months to come to watch the Pinocchios in the gold world/officialdom squirm as they attempt to find ways to control the gold price advance. One story after another is likely to surface about gold sales. As one after another fails to stop the gold rise, we will visibly see their noses grow longer.

Fortunately, Canada has woken up as to the shenanigans of The Gold Cartel and how they operate. In 1997 the IMF wanted to dump physical gold, a move which made no sense and was roundly defeated, with both US Democrats AND Republicans booing the concept. The increasingly desperate Gold Cartel, running out of measures to stop the gold advance, is at it again. A suspicious Canada is on their case. From this morning’s Reuters:

A plan to revalue gold held by the International Monetary Fund to pay for debt relief must be carried out in a way that will not rock world markets, the finance minister for major producer Canada said on Thursday.

Ralph Goodale told reporters he would study the debt relief plan next month to check the fund's assertions that revaluing the gold holdings would not hit the price.

"The technocrats believe that this can be done in a way that is not disruptive, but I want to see that plan to be sure," Goodale said as he left a weekly cabinet meeting.

-END-

Back to the gold action. As is par for the course, gold was very firm, yet did not rise sharply, still digesting its way through a two week composure period following the price collapse.

Nothing wrong with the gold weekly chart. Still very powerful and up $8 for the week:

http://futures.tradingcharts.com/chart/YG/W

Bottom line: all the short-term gold bears looking for a correction a month ago (during the New Orleans Investment Conference and elsewhere) with gold at $433, remain offside. Since their predictions gold has rallied more than $20, lost that $20 back to its breakout point, and is lurching back up. If gold craps out from here, MIDAS and other short-term bulls will have to eat crow. If gold continues the bull move as it appears to be doing at the moment, those short-term bears will have to re-enter the long side at higher levels should they wish to have their clients participate in the coming historic gold move at reasonable prices. Short-term gold bulls ought to be very gratified so many long-term gold bulls are out of the market and a number of them are even short. This is mucho good news indeed.

Clear as day: when gold approaches $435, the price gains against the euro as The Gold Cartel and others in the trade cover shorts. As gold approaches $440, gold loses ground against the euro as the price manipulators attempt to keep gold from going through $440. The euro rallied after the early sell-off this morning, attracting specs and locals along the way.

The gold open interest fell 1492 contracts to 318,584, more evidence the cabal covers when gold approaches $435.

The latest silver bulls (Morgan Stanley, etc.) were not present on the Comex floor today and the bears did what they could to take advantage of the situation, pressing the short side in the early going. When silver blows out like it did on the break from $8, it always seems to take forever to regain a bullish composure. The process is usually much more painful and protracted than occurs in gold. So far we are seeing the same sort of price action relative to gold.

The silver open interest sank 1383 contracts to 100,715. Just a matter of time before the specs come back in to move silver towards $10.

Post Comex close commentary:

Here we go (that didn’t take long), just in...more sheeple stories about European central bank gold selling:

France, Portugal, Swiss sell gold under cenbank pact

(Updates with Portugal sales, paragraphs 1, 4)
LONDON, Dec 17 (Reuters) - Central banks in France, Portugal and Switzerland have sold altogether more than 50 tonnes of gold under a pact which came into force in September, officials in the three countries said on Friday.

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.

In Lisbon, the Bank of Portugal said it had sold 20 tonnes of gold reserves in the last two months, with liquidation to be this month.
The sale was in accordance with the agreement which came into force on September 27 this year to replace the previous one dating from 1999.

The market had already identified Switzerland as a seller, but the French central bank only said in November that it had agreed with the country's finance ministry to sell 500-600 tonnes of its gold reserves over the next five years.

The current central bank gold sales pact, known as GBCA2, raised the limit on gold sales by its 15 signatories over the next five years to 2,500 tonnes from 2,000 tonnes in 1999-2004.

The 1999 pact was designed to help stabilise prices when gold was languishing below $300 an ounce because of the stronger attraction of other investments at the time.

Anticipation is mounting in the market over major potential seller Germany, the world's second largest holder of gold, which is expected to announce its decision on gold sales over the next few days.

The Bundesbank said earlier this year it had secured an option to sell 600 tonnes under the agreement, with its president Axel Weber saying that a decision would come by the end of this year.

-END-

With the dollar sinking, the CRB taking off and oil taking out $46 per barrel, gold finally took out $440 and popped another $2. For the third time this week, The Gold Cartel was instructed by headquarters to implement their $6 Rule. This is unprecedented and reveals how petrified the bums are of a sharp gold price advance. At its high of the day, gold was up $5.50.

Reasons for gold to explode are blaring all over the place. One of them:

*The CRB (287, up 4.20) has stormed back up, led by surging crude oil (up $2.10 to $46.28 per barrel) and coffee, up 6 cents per pound. A German coffee company is raising prices by 27%. So much for commodity deflation.

As forecasted and expected, the change of positions in the Comex COT report for gold was dramatic. The large specs reduced their longs by 51,206 contracts and shorts by 6,653 contracts. The commercials increased their longs by16,947 contracts and reduced their shorts by 29,512. The small spec long reductions are now back at their 6 weeks highs again as they reduced longs by 3,663 contracts and reduced short positions by 1,757.

GATA love this. As of Tuesday, before the recent oil surge, the large specs were short 9,000 oil contracts and the small specs were short 17,000 contracts.

With gold at $433.40 I spent my last Sunday (forget it this weekend) writing a special MIDAS:

The Big Picture: Why Gold Remains So Explosive!

I did so to counter the incredible negativity in the gold camp. So many seemed to lose focus on the real gold story so quickly. Perhaps it might be a good review for some in light of this week’s sharp price recovery.

Some key points to go over as to where we are today:

*Gold finally broke out from immense technical resistance at $430, soared $25, dropped back $23 to check the significance of the breakout and ran away from $430 for the second time, confirming the breakout.

*Gold then held further support at $435 convincingly and took out noted $440 resistance late today, for the second time this week. The Gold Cartel and trade were seen as substantial buyers any time gold approached the $435 level.

*Incredibly, nearly all the gold pundits continue to look for a correction and a number (especially the cycle people) are even bearish. Thus far, most are offside by $7 to $9 per ounce.

*Commodity prices remain very firm. If the grains ever catch some decent bids, the CRB will take out 300, making new multi-decade highs.

*The dollar remains weak and vulnerable to a major collapse. Foreign nations are demanding the US take steps to correct the growing deficit problems. Only Presidential rhetoric is offered in return. There are no plans to cut spending, or cut to taxes to solve the problem.

*Meanwhile, the conditions in Iraq continue to worsen. More troops and money are called for. How is this going to help solve the deficit problems? Next year looks like a financial market nightmare for the US.

*Outside of Café commentary there is almost no mention anywhere re what is going on in the cash market, most likely the KEY to the gold price. So strange! Our special Café thanks go out to John Brimelow and our STALKER source.

*The world’s most substantial gold buyers don’t care what the West thinks. They want cheap gold and are acting upon those wishes. They know how valuable these purchases have been over the past few years. Most also realize where the price is headed and why.

The trading in gold is extremely unusual. It has the big gap above the market. Yet, it keeps leaving gaps below the market on its return back up. Left another one today. This is very abnormal.

Both gold and silver closed on their highs and the gold physical market remains on fire. This bodes very well for next week. When are those looking for a correction going to "Cry Uncle" and get their clients back on board the coming historic gold move?

On that note, my friend Mahendra called right after Comex closed, relaxed and laughing. Predicts gold will take off on Monday and that it should run to $478 to $490 by January 1. He sees silver reaching $9 by then. We should keep in mind, Mahendra predicted gold would reach $448 by late fall many months ago when few others thought so.

Silver firmed up later on, yet exhibited little spark like we saw in the gold pit.

The dollar lost .39 to 82.63. When gold closed, the euro was around 132.90. However, after the COT report revealed the large specs short 16,000 contracts, it rallied another 25 points – last seen around 133.16.

The notion of those in the investment community that the dollar is a one way bet to go south could not be more wrong. This report states more specs are dollar bullish than dollar bearish!

Gold in euros recovered to 332.

The John Brimelow Report

Central Bank capping operation?

Friday, December 17, 2004

Indian ex-duty premiums: AM $8.03, PM $9.34, with world gold at $439.25 and $439.30. High: lavish for legal imports. This has been a busy week for Indian importers.

TOCOM appeared non-committal. Open interest slipped 163 Comex equivalent with aggregate volume up 28%, but still only equal to 13,791 Comex lots. The active contract was down 9 yen, although world gold was $1.55 above the NY close at the end, at $437.75. The Mitsubishi report, however suggests that the General Public increased its long by a sizable 7.2 tonnes (or 2,300 Comex lots) and that

"…spot gold was capped by dealers selling above 439…"

Evidently more was going on than first glance suggests. (NY yesterday traded 59,050 lots. Open interest fell 1,492 lots.)

Constant dealer selling was very much a feature of NY trading yesterday also. ScotiaMocatta comments:

"Dealer selling put pressure on the price causing a steady slip lower…The metal was forced to a late day low of 435.50/436 where physical buying appeared, causing a small bounce…"

Today also bullion traded ominously sideways for over an hour into the close, abruptly halting a powerful rally just above $440. Estimated volume soared 31% in the last half hour (to a day’s total of 50,000). It looks very much as if a large and determined seller is lurking at that level.

It is a measure of the influence of the physical market that world gold had the temerity to go straight back to test this level today, and even more that it shrugged off the news that the French have begun selling gold. (The Portuguese confession came late in the day.) It also ignored another call by UK Minister Brown activate IMF gold. These kinds of developments greatly distressed the Western-dominated gold market of the late 90s. They have no effect on Indians. Whoever is the seller will have more work to do.

JB

CARTEL CAPITULATION WATCH

The GATA-like planet looks a bit more attractive than yesterday. The DOW fell 56 to 10,649 and the bonds followed through on the downside by the close, with the March losing 10/32 to 111 14/32.

Could bonds finally be giving up the ghost? With commodity prices (But, there is no inflation) doing what they are and the dollar doing what it has, bonds ought to go south in a major league way as foreigners realize how much they are going to lose by continuing to hold, and ad to, their dollar instruments.

US economic news:

08:30 Nov. CPI reported 0.2% vs. consensus 0.2%; ex-Food & Energy 0.2% vs. consensus 0.2%
Prior total CPI unrevised at 0.6%; ex-Food & Energy unrevised at 0.2%.

Input from DOWN UNDER:

G’day Bill,

It would appear that the US$ Index level of 81 is now at a critical juncture,

If, US$ Index > 81, then Gold < US$ 450
If, US$ Index < 81, then Gold >>> US$ 450

Gold, Key Resistance, US$ 450

If foreign central banks stopped their dollar purchases, interest rates in the U.S. would immediately rise.

A rise in interest rates would threaten the U.S. recovery, bond investments would depreciate, and the dollar would fall precipitously.

A sudden drop in the dollar would undermine foreign willingness to finance U.S. deficits

If, or when, this happens … enter the Gold Bull!!!

It is now not such a point of keep the Gold price suppressed, but attempting to keep the US# Index above 81, as has been indicating since the large drop in the Gold price yesterday and last week!?

In both instances, Gold has strongly recovered, which would suggest that the US$ Index is in serious trouble.

Now, given the nature of the US$ Index, it is suggested that the "other" currencies are also in serious trouble, and given the size of the currency market, by default a CRASH in the stock markets is in the wind?!
Och aye,
Haggis

Ps……….

What is the US Dollar Index®?
Just as the Dow Jones Industrial Average provides a general indication of the value of the US stock market, the US Dollar Index (USDX®) provides a general indication of the international value of the US Dollar. Similar in many respects to the Federals Reserve Board's trade-weighted index, the USDX does this by averaging the exchange rates between the US Dollar and six major world currencies.

USDX = 50.14348112 × EURUSD-0.576 × USDJPY0.136 × GBPUSD-0.119 × USDCAD0.091 ×
USDSEK0.042 × USDCHF0.036

These 17 countries (12 countries of the Euro zone plus the five other nations whose currencies are represented in the USDX) constitute the bulk of international trade with the United States, and have well-developed foreign exchange markets with rates freely determined by market participants. In addition, many currencies not included in the USDX move in close correlation with those that are included. The USDX is computed 24 hours a day, seven days a week.

Input from London way:

Good afternoon Bill
I was interested to read Ed Steer's comments on gold and the HUI and the current position of the MACD and RSI. I have been watching from a slightly different perspective: the comparison between $HUI and $GOLD.

Here it is in chart form and, just as Ed says, both MACD and RSI are at low levels, and well below levels at which rallies in this index have taken place in the past. Each time the 50 day ma crossed above the 200 day ma there was a six month rally in the index and in the HUI.

[Blockierte Grafik: http://www.lemetropolecafe.com/img2004/SharpChart1217.gif]

If I were short gold shares and gold at this juncture I would be worried because the 50 day ma crossed the 200 day ma in mid-October (at around the same time gold broke above $433 and out of the handle of the teacup) and, although turning down slightly, the daily is now tacking back upwards toward the 200 day ma.

My guess is that this index will continue to strengthen and put in a run lasting around 6 months from when it breaks above the 200 day ma. When will that happen? Between now and yearend.
Best regards
Ian

PS
Forgot to mention that gold shares will outperform gold itself on this next move.
Ian

Makes sense to me Nick:

Hi Bill,
It is quite amazing to witness so many of the "experts" becoming increasingly bearish on gold. Every passing day fewer and fewer of us bulls remain. So who knows? Perhaps the these "experts" will be right and we are set for a protracted correction. But then again, I've rarely witnessed a market that behaves according to the crowd's "certain" predictions. It is never that easy.

There is an old traders adage, "Markets resume their primary trends on dullness". This is one very dull market, indeed! As well, the bull will often resume its move with massive investor disinterest and disbelief. As you have been writing for some time, this gold bull is like a train that is rapidly being emptied of its passengers. Will the gold train leave the station with a just a handful of us partygoers on board? Perhaps its time I head to the observation car for a cocktail or two in anticipation of some great scenery along the way. All aboard?!

Cheers!

Nick Ferris
J-Pacific Gold Inc.
info@jpgold.com
http://www.jpgold.com
1-888-236-5200
TSXV Symbol: JPN
OTC BB Symbol: JPNJF

This is the bombshell I referred to weeks ago. If it were not for allies of The Gold Cartel, the effort to remonitize silver in neighboring Mexico would have passed. Still might as some more time goes by on this significant issue. Anyway, GATA’s Chris Powell recaps it best:

5p ET Friday, December 17, 2004

Dear Friend of GATA and Gold:

Hugo Salinas Price -- businessman, philosopher, and Mexican patriot -- describes in the essay appended here the great progress being made in Mexico toward the remonetization of silver. He argues for what GATA has been arguing for -- giving people a choice of money and making money compete for people rather than the other way round. That will be, as Salinas Price suggests, the end of imperialism and the renewal of human liberty and dignity.

If only developing countries, particularly Mexico and South Africa, realized that their poverty is half self-inflicted, that they are actually sitting upon the most enormous and liberating wealth and need only to mobilize it against their exploiters. ...

***

Stay tuned!

The gold share action remains dreadful. The XAU soared .07 to 98.33, while the HUI limped to a 1.01 gain to 214.89. Newmont fell 17 cents to $44.65 with gold up $5. This has reached the point of absurdity.

The better gold acts, the more the gold share light bulbs seem to go off. Gold remains one of the least understood and worst reported-on markets in history, most of all by the gold industry itself. We have a complete disconnect in the gold share market vis-à-vis what is going on in the gold physical market. As oft-stated here, the reason is very simple. Wall Street is mostly gold bearish. The gold market pundits with attending clients are mostly gold neutral to bearish. Who outside of a few in our bullish camp is out there telling anyone to buy the shares at the moment? How can the shares move up under these circumstances?

This is going to lead to a move up in gold, silver and the shares which is going to stun the investment community. The light bulbs are ALL going to go off at the same time. The coming advance in the gold/silver shares will be SPECTACULAR, and it will be swift. In retrospect months down the road, you will read much commentary on how obvious this all was.

This is a weekend for sweet dreams and one of preparation for Christmas and the holiday season.

GATA BE IN IT TO WIN IT!

MIDAS