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

The John Brimelow Report

Advantage Bulls? - CFTC & Gartman say so

Monday, February 14, 2005

Indian ex-duty premiums: AM $7.09, PM $6.26, with world gold at $422.20 and $422.65. Adequate for legal imports. India’s gold import propensity has held up pretty well considering world gold has risen some $9 in two business days.

Generally, the world’s largest gold buyer had a pretty cheerful day, with the stock market reaching an all-time high intra day, and January exports announced at +33% vs. ’04. Large recent inflows of foreign portfolio investment funds have been reported; the chief of the Reserve Bank gave a speech grumbling about the distorting effect these could have on India’s economy. An obvious way of offsetting these inflows would be to cut import duty on gold, about $7.25 an ounce at present! In any case, further firm support to world gold from India seems assured.

TOCOM returned after a long weekend to find world gold almost $7 higher and the yen firmer. World gold in fact rose to go out $1.80 above the Friday NY close at $422.30, but the impetus did not come from Japan. Open interest rose only the equivalent of 1,232 Comex lots, and the Mitsubishi data suggests the "General Public" actually reduced their long position slightly. The active contract closed up 16 yen on volume equal to 37, 642 Comex lots (up 164%); most of this was probably Trade House arbitrage. (NY on Friday traded 48,051 contracts. Open interest rose 514 lots.)

On Comex on Friday morning the currently usual sell-off attempt was defeated quite decisively. As UBS puts it

"On Friday in New York gold initially struggled to break through resistance at $418/oz…Eventually determined buying lifted gold through this key near-term level and light stops were triggered, taking the metal above $420/oz. Volume above $420 was rather light but gold managed to test the $422 level although not successfully during US trading."

Several observers detected Fund buying.

So apparently does The Gartman Letter, which has heeded this by going long:

"SPOT GOLD: OK, the time has come to return as gold market bulls... reluctantly, for we hate gold generally, but the trend is clear…we have stood aside from the gold market since early December when we sold our last remaining gold shares. It does appear that the uptrend, going back for several years, has held. The market has gone from overbought then to oversold recently. Support has held and we are going to return as gold market bulls this morning upon receipt of this letter, buying the GLD i-shares.. If this is a bull market, then new highs are likely and our risk/reward is very positively skewed in our favour." (JB emphasis).

Gartman’s record on gold lately has been good. Curtailing his prejudice, he went long on the breakout in October, sold essentially at the highs in December, and subsequently resisted the temptation to go short. However the credit for this is apportioned between his sagacity and the quality of the input he gets from his Hedge Funds friends (the latter being not unimportant in my view), this is a significant call.

Quite dramatic CFTC data is supportive. Various commentators supply their favored dimension. Large spec gross short the biggest since 20 July 1999 (gold was in the $260s); Large spec futures long a three year low – a level normally associated with a price $100 lower. Net spec long the lowest since July 2003 (when gold was in $350s); Gross spec short the largest since April 2001 (when gold was in the $260s). Given Gartman’s view/information, perhaps the most significant measure is that the total Comex spec long is only 3.8 Mm ozs, down from 20+ Mm ozs last November – room for over 500 tonnes of spec buying.

This is a chart illustrating the situation.

[Blockierte Grafik: http://www.lemetropolecafe.com/img2005/midas/midas0214A.gif]

Overall, the best discussion of the CFTC data was posted at Gold Eagle by Dan Norcini, with valuable charts. See

http://www.gold-eagle.com/editorials_05/norcini021105.html

He concludes

"Each of…three reaction price setbacks has seen… in spite of the fact that more FUND LONG LIQUIDATION as a percentage of the total open interest has occurred with each major price setback over the last two years, the corresponding gold price drop… has been successively shallower… What this tells me as a trader analyzing this market is that more and more buying is emerging on each of these larger price setbacks in gold and that the buyers are absorbing successively larger amounts of selling - so much so that gold's price dips are becoming more and more shallow. That can only bode well for the gold price…" (JB emphasis)

JB

Love having "foot in mouth" Dennis Gartman around. According to DG, gold was supposed to be a "train wreck" only a week or two ago. Now he is bullish. He must have received the word from his cabal clique their raid was ending. That’s his business and if he is calling gold well lately, good for him. My chuckle is with his "hate gold" comment. Huh? Why? Oh, I see, because if gold is going up a good deal, it means his Gold Cartel clients are unhappy. It’s bad for Wall Street. I get it. No wonder he attacks GATA all the time. God forbid the truth should come about his clients.

CARTEL CAPITULATION WATCH

One of the quietest US stock market days in some time. The DOW lost 5 to 10,791, while the DOG gained 6 to 2082.

Earlier today on the dollar:

Feb. 14 (Bloomberg) -- The dollar fell by the most in almost three weeks against the yen after a government report showed Japan's current-account surplus unexpectedly swelled in December.

``Traders sold the dollar against the yen as soon as they saw the trade surplus figure,'' said Steve Barrow, a currency strategist in London at Bear Stearns Cos. ``The momentum has now shifted negatively for the dollar.''

The dollar also dropped by a cent against the euro after the Commodity Futures Trading Commission said late on Feb. 11 that speculators closed bets against the U.S. currency last week. The CFTC's report suggests traders can buy euros with less concern sales by hedge funds will cause their bets to go wrong, said Rizwan Din, a currency strategist at Barclays Capital in London.

-END-

Former silver price rigger and silent Gold Cartel member, AIG, is back in the news for the usual. No wonder they quit the silver price fixing ring in London months ago – an appropriately named business dealing for them to run away from with all the other shady dealings they have been found guilty of.

Feb. 14 (Bloomberg) -- American International Group Inc. received subpoenas from New York Attorney General Eliot Spitzer and the Securities and Exchange Commission related to insurance products that may have helped companies smooth earnings.

The subpoenas, received since the world's biggest insurer reported earnings on Feb. 9, also relate to some reinsurance transactions and AIG's accounting for them, the New York-based company said today in a statement. AIG said it is cooperating with the requests.

AIG, which already agreed to pay the SEC $10 million to settle a case involving alleged income-smoothing in 2003, is at least the eighth company to be subpoenaed since Spitzer and the SEC began an industry investigation last year. Regulators are probing whether insurance companies sold non-traditional policies that acted as disguised loans and allowed clients to mask losses.

Two executives pleaded guilty to Spitzer's bid-rigging charges in October. On Feb. 9, the company said it had completed an internal review and found no wrongdoing outside the employees' unit. Shares have risen 8 percent since, in part on optimism that the company's regulatory probes would soon be resolved.

-END-

Rhody on the lease rates:

Good morning:
I am pleasantly surprised this morning that gold and silver prices have followed through from Thursday and Friday's gains in a positive fashion.

Three up days in a row????? Wow. I did notice a curious development in the silver lease rate pattern. There is a developing spike in the LATE terms, which is more pronounced the farther one goes out the rate curve. One year lease rates increased by over one third or by .25%. The surge in leasing affected all terms except the one month. This is unusual. If there is a lease and dump strategy to control the spot price, it occurs in the near terms, not the longer terms. So if this is not a price control strategy, what is it? The other possibility that comes to mind is leasing to fulfill anticipated futures contract commitments. Would entities who are naked short on COMEX use someone else's silver to fill futures contracts???? You bet.
Regards, Rhody.

From a bulliondesk article:

<>Currencies: IMF Gold Revaluation Wouldn?t Tarnish the USD
Karin Kimbrough & Sharon Yeshaya (New York)

IMF gold sale unlikely

http://www.morganstanley.com/G…20050214-mon.html#anchor3

Over the years, it has often been suggested that the price of gold affects the value of the USD. However, the available econometric evidence seems to suggest that, if anything, the USD influences gold prices and not vice versa. We note that gold prices have dropped far more than the EUR/USD exchange rate in the last two weeks, which we think is an indication that gold prices are mainly being driven by gold-specific factors currently. Moreover, the 1997 sale of gold by the RBA caused the gold price to fall temporarily, but FX market participants didn’t consider that this action should have much effect on the value of the AUD. Instead, the FX markets were more concerned about the possibility that the RBA would cut interest rates, and this was the reason for the weakening of the AUD/USD rate.

Bottom line: USD higher, gold lower

Given our constructive views on the direction of the dollar, we think that USD-denominated gold prices are likely to come down over the medium term. But in the very near term, both our metals desk and our technical analyst, Drew Baptiste, expect gold prices to rise. Drew is looking for levels as high as $430–440/oz into late winter but shares our view that over the medium term gold prices will fall further. His six-month target for gold is $370/oz.

-END-

Interesting how in one day we learn of two Morgan Stanley views. One is looking for $500 if $430 is breached. The other for $370 either way. What makes the world go round.

Houston’s Dan Norcini earlier:

Just wanted to drop a quick line saying that if gold can manage to hold these gains into the close, we are mapping out one heckuva good looking technical chart pattern on the daily. If it holds near the highs of the day, it will have taken out the downtrend line that has been in place for the last two months. We will still need to get over $430 basis April on a close however as there appears to be a fair amount of resistance in that area. Should that give way, the shorts are in serious trouble and will run as a boat load of stops are sitting just above that area.

HUI close over 210 will signal a short term bottom is in. Ideally, I would like to see a close over 212 in there. That would really be nice coming on the heels of last week's upside weekly reversal. Will have to wait to see how they close today and see if they can avoid the usual 2:00PM melting action that we have seen all too often.

Grains are showing a few signs of life although not confirmed just yet. South American weather woes to blame. All we would need to run the CRB up sharply is rising grains since, as you have repeatedly pointed out, they have been one of the few laggards in the commodity world.

Check with you later.
Dan

The HUI did manage to close above 210, barely. Late in the day it was below that mark. All in all a weak performance considering the strength in gold. If gold were any other market, this could be considered normal market action after the recent gold share strength. What is aggravating is how this seems to occur time and time again when The Gold Cartel and friends are massive sellers on the Comex. Nine times out of ten, gold has dropped the next trading session. The crummy gold share action has telegraphed the next day’s Comex activity too often to be a coincidence.

The HUI finished up at 210.43, up 1.62. The XAU gained only .43 to 95.33. Gold share excitement was MUTED, as is so often par for the course.

HUI above 210 is a plus, however, as Dan noted, it must clear 212 and close there to really gain some steam. Today’s high was 211.66. You can see why by viewing the chart. It broke down from 212 after bouncing around that level for awhile. 220 is the real key, which would be a 50% recovery point from high of the move to the low. A close above 220, the point where the HUI really broke down, and it is all she wrote for the gold bear stock shorts.

HUI
http://bigcharts.marketwatch.c…&o_symb=hui&freq=1&time=8

The gold fundamentals remain superb. The technicals have changed dramatically the last three trading sessions. In each of these sessions, The Gold Cartel has been spotted as featured sellers. With Greenspan speaking in front of the Senate and House on Wednesday and Thursday, our short-term caution flags have to be flying. However, the big picture is bright as can be.

GATA BE IN IT TO WIN IT!

MIDAS

Psychologie von Gold und Silber: derzeit noch nicht im Bewußtsein der breiten Maße

http://www.gold-eagle.com/editorials_05/stein021505.html

Aus Südafrika kommt die Meldung, dass der Zeitraum für die Goldveredelung in den Raffinerien durch neue Technologien von 4 Tage auf 1 Tag verkürzt werden kann:

http://www.mineweb.net/sections/gold_silver/414596.htm

Inwieweit sich dies auf die Produktion auswirkt, ist in diesem Artikel nicht klar erkenntlich. Sofern aber keine anderen Limitfaktoren vorliegen, müßte sich dies sehr vorteilhaft auswirken, d.h. man könnte mit dieser Technologie im gleichen Zeitraum mehr Gold veredeln.

February 15 – Gold $425.60 down 20 cents – Silver $7.34 up 5 cents

Silver Continues To Move Higher, CRB At Multi-Decade Highs Again

Nothing is as real as a dream. The world can change around you, but your dream will not. Responsibilities need not erase it. Duties need not obscure it. Because the dream is within you, no one can take it away. ..Tom Clancy

GO GATA!!!

The Gold Cartel went into action yesterday as soon as the Comex closed, as they so often do…the reason being they can influence the market at that time of day using up little ammunition and on light volume. Soon after the Access Market opened, gold was down 90 cents right off the bat. By the time I went to sleep, gold was down $2.40 even though the dollar was only slightly higher. When I woke up the euro was .45 higher with gold coming back to down 50 cents. Had the crooks not gone into action, gold would have been due $2 higher and $430 would have been threatened. That is how these bums play this crooked game. That is how it works and how they fleece you. Anyone watching the gold market from last night’s close to this morning’s Comex opening knows exactly what I am referring to.

What a farce of a market! First there was the obvious crummy action of the shares yesterday, which foretold of a Gold Cartel attack today. Then, there was the obvious Access Market action last night, followed by the euro going up .55 today and gold only ALLOWED back to the unchanged+ level for a brief period of time. Any trader could see gold was being set up to be trashed at the slightest opportunity. The cabal was waiting for something. Surely it was this report which they must have had in their back pocket:

9:00 US reports net capital inflows of $61.3B in December vs consensus $58.5B November inflows were revised to $89.3B from $81.0B.
* * * *

This number is widely followed to ascertain the willingness of foreigners to finance our debt. Since it was better than expected, the dollar regained some strength. That was all the bums needed and what they had clearly been waiting for. I blinked and gold was taken down $2 even though the euro was STILL up .30.

However, the best laid plans failed to win the day for the Working Group on Financial Markets and their efforts to prop up the dollar:

2/15 WASHINGTON (Dow Jones)--The Bush administration Tuesday urged Syria to withdraw its troops from Lebanon, calling Syrian forces there a destabilizing presence.

White House spokesman Scott McClellan made the comments minutes after the news emerged that the U.S. was withdrawing its ambassador to Syria…

-END-

The dollar was on the firm side when this news hit the tape. The euro, after tailing off sharply, took off again. So did silver. However, gold was not allowed to go above unchanged for more than a nanosecond. The manipulation was that obvious. If the Syrian news hit the dollar, it should have affected gold to even a greater degree. Nope. Clearly The Gold Cartel operatives were given instructions yesterday and today to keep gold from closing above the $426/$427 area. Mission accomplished.

$430 gold was safe for the time being.

Yesterday I mentioned how gold was breaking out in euro terms. That was all it took for the cabal to go into action. It closed today at 326.40, way off its 328+ high. End of this breakout for the time being. A Gold Cartel mantra is to contain gold in other currencies. Been at that drill for years.

The gold open interest was a stunner to myself and other market watchers. It only rose 692 contracts to 260,074. Our veteran floor source expected it to be 10,000 contracts to 15,000 contracts higher. We know The Gold Cartel and dealers were huge sellers yesterday and the funds were massive buyers. For the OI to rise so little on nearly a limit up day (almost $6) suggests spec shorts were covering those positions like crazy and the dealers were far more long below $420 than previously thought. Thus the spec buying cancelled out the cabal selling from an OI standpoint.

The silver open interest fell 401 contracts to 96,021. This could represent Morgan Stanley taking some profits, so this number was not a surprise.

Silver went back to fill one of the two gaps it left below. It either did so, or missed by a penny. Either way, for silver to storm back like it day after making that kind of effort is BULLISH. No telling what silver could do in the weeks ahead.

The good news, no matter how you slice it, is the open interest in both gold and silver are very low from a recent standpoint. There is plenty of room for the specs to pile into both precious metals and take the prices MUCH MUCH higher.

Here is another BIG positive. The Gold Cartel took a huge number of specs out of their long positions; meanwhile, the CRB has crept up and is not far from making multi-decade highs on a spot basis. Coffee, up 5 cents, led the way today as the CRB gained 1.46 to 289.33, even though pivotal oil and the grains were lower.

The April contract registered a NEW CONRACT HIGH:

April CRB
http://futures.tradingcharts.com/chart/RB/45

Copper, near an all-time high of $148.20, helped the CRB too by going up another 1.4 cents to $1.4585.

March copper
http://futures.tradingcharts.com/chart/CP/35

Quietly, US commodity prices have moved to 20+ year high levels. Few pundits seem to be paying attention. The point is with commodity prices moving up so stoutly and so few specs on board inflation barometers gold and silver, we have a highly probable shot for some serious precious metals fireworks in the very near future.

The John Brimelow Report

JB: Japan sells; GLD does not buy; China... laughs?

Tuesday, February 15, 2005

Indian ex-duty premiums: AM $ 5.15, PM $ 5.45, with world gold at $424.40 and $424.60. Somewhat narrow for legal imports. World gold has risen more than $10 in three business days, of course, which usually disgruntles the Indian market. Probably more important however was rupee-weakening intervention by the Reserve Bank. In all likelihood premiums will widen again when the currency stabilizes.

Japan turned a significant seller. Although the active contract closed up 6 yen (and intra day was 6 yen higher) open interest fell the equivalent of 2,685 Comex contacts (8.35 tonnes), on volume equal to 29,655 Comex lots (-21%). Mitsubishi’s data suggests the "General Public" long was slashed 15.1 tonnes. While it is true that the yen-accentuated TOCOM gold price has jumped 4% since last week, the abruptness of the direction change suggests a Fund seller was largely responsible. In that which case the pressure might be short lived. World gold today unusually faltered in Japanese hours, going out $1.25 below the NY close. (NY yesterday traded 53,332 contracts; open interest rose 692 lots.)

Two subordinate ECB Central Banks sold E57Mm of gold last week, about 5.5 tonnes, about the recent average.

Yesterday in New York, according to ScotiaMocatta

"funds were keen to buy right from the opening bell. The metal made a steady climb higher absorbing scale up overseas based selling in the process. A session high of 426.20/426.70 was posted before slipping back to 425.80/426.30 at the close."

A view seconded by UBS:

"Yesterday in US trading gold opened at the low and moved higher on decent speculative buying in April gold. One European bank was a noted seller of gold through the day against mainly CTA interest."

Since one must surely assume that at least part of the unusually large short reported by the CFTC last week was covered in the past couple of days, the 4,650 contract increase in open interest since last Tuesday’s CFTC cut-off (when gold was $413) has to be read as indicating the presence of a pretty serious seller. Reviewing the 2005 gold chart suggest that the $426-29 level has become very sensitive.

The fact that GLD has gone the past – volatile - week without any change at all to the 155.09 tonne reported gold outstanding has to be thought odd.

While waiting for this resistance level to be dealt with it is somewhat soothing to contemplate Bridgewater Associates latest jeremiad on Foreign Central Bank ownership in US Treasuries:

"Foreigners owned only 20% of US treasuries ten years ago. Now they own 55% and that number has risen by about 5 percentage points each of the last three years…only foreign central banks are willing to buy US treasuries on the massive scale required…While Japan is the largest holder of treasuries, emerging markets are very large players as well. In fact, the ownership of treasuries and agencies by emerging markets has been increasing by almost 3 percentage points a year in recent years. Once again, almost all of this increase is by the public sector"

"Emerging Markets" (which means mainly China and the HKMA) now hold 24% of outstanding US Treasury and Agency debt. Bridgewater thinks this economically unwise for the foreigners and that it will therefore end. Of course, the real issue is political. For some reason, China is, in essence, willing to fund America’s Middle East venture. One day, perhaps, it will not.

JB

CARTEL CAPITULATION WATCH

The US stock market continues to trend up. The DOW gained 46 to 10,837 and the DOG rose 6 to 2089.

US economic news:

Feb. Empire Manufacturing reported 19.19vs. consensus 20
Prior unrevised at 20.08.
* * * * *

08:30 Jan. Retail Sales reported (0.3%) vs. consensus (0.4%); ex-Autos reported 0.6% vs. consensus 0.4%
Prior Retail Sales revised to 1.1% from 1.2%; ex-Autos unrevised at 0.3%.
* * * * *

13:00 February NAHB Housing Market Index reported 68 vs. consensus 69
Prior reading was 70.

Flattening Home Prices Spell Trouble for First-Time Homeowners

PRINCETON, N.J., Feb. 15 /PRNewswire/ -- The end of the housing bubble could mean substantial losses in home value for millions of Americans, reports RealEstateJournal.com, The Wall Street Journal's guide to property. Housing prices, adjusted for inflation, are up 36% since 1995 -- the steepest boom in at least 50 years -- according to the Center for Economic and Policy Research in Washington, D.C.
Although the overall economy could bear a flattening or modest decline in house prices, many young Americans -- who were encouraged to buy homes because of low interest rates or government homeownership programs for low-income individuals -- could experience financial hardship when the housing bubble bursts. And, if interest rates rise, some buyers who stretched their purchasing power with adjustable-rate loans and interest-only mortgages could face financial problems.
"As long as prices remain near today's levels, most homeowners will still have a lot of equity against which they can borrow to finance other types of spending," says Valerie Patterson, senior producer, RealEstateJournal.com. "However, if housing prices take a nosedive, many families would be unable to sell their home for enough to pay off the outstanding mortgage." RealEstateJournal.com offers this advice for potential homebuyers:..

-END-

So much for gold trading against the dollar again. The dollar fell .40 to 83.60 with the March euro rising to 130.23 and above key 130 resistance. The yen was a stellar performer as it rose to 104.36.

On the capital inflows report:

1. It is old news. While the number was not as weak as expected, December was far weaker than November.

2. These numbers are pre-G7 in early February when US creditors demanded the US take steps to get its fiscal house in order. When the costs for Iraq are taken into account, nothing of the sort has been done. This lack of serious effort by the US should take its toll in the months to come and negatively affect the capital inflow numbers in the future.