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

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.

From Carolyn S on spin:

Hi, Bill
It was amusing to watch the news spin this morning. At 9:51 a.m. Robert Schroeder of MarketWatch reported: Overseas investors reduced their purchases of bonds and stocks in December, the Treasury Department said Tuesday. Foreign long-term net capital flows into the United States fell to $61.3 billion in December from a revised $89.3 billion in November. The effect, as reported by Mr. Schroeder: The dollar bounced off its lows following the report. Analysts said the news carries some negative implications for the dollar, but added it may have spurred a flurry of opportunistic bargain-hunting."

Huh?

Five minutes later, Leslie Wines decided to give it a try, as follows.

Dollar bounces after capital flows data
Market speculation predicted a more worrisome drop

By Leslie Wines, MarketWatch
Last Update: 9:56 AM ET Feb. 15, 2005

NEW YORK (MarketWatch) - The dollar managed a small bounce from its early lows Tuesday after news that foreign long-term capital flows into the U.S. fell 31.4 percent to $61.3 billion in December, easing concerns of a more severe decline.

The Treasury Department said flows fell to $61.3 billion in December against a revised $89.3 billion in November.

The euro fell back to $1.29806 in early dealings, after trading as high as $1.3039 before the capital flow news. The euro was up 0.05 percent from Monday's close.

The yen traded at 104.84 per dollar, against 104.69 per dollar before the data, for a 0.1 percent gain from the prior session.

"The dollar popped on the news because the capital flows were better than the rumors and it appears that the U.S. at this time is not having trouble funding its current account deficit," said Refco senior currency analyst Mike Malpede.

Nervousness about funding for the U.S. current account deficit has undermined the dollar.

Malpede said a smaller-than-expected overall drop in U.S. retail sales in December and a February decline in the Federal Reserve's Empire State Manufacturing index largely cancelled each other out in the minds of foreign exchange players.

The market Wednesday is expected to play off fourth-quarter Japanese gross domestic product data and testimony by Federal Reserve chief Alan Greenspan to U.S. lawmakers.

-END-

I count three pieces of bad news reported in this article: a 31.4% decline in foreign capital inflows, a drop in December U.S. retail sales, and a decline in the Empire State Manufacturing index. But since the dollar bounced up (and the stock market bounced up, and silver and gold and mining stocks all fell), it is a little bit difficult to know how to word the financial analysis. Leslie Wines wisely left the analysis to Mr. Malpede, who opined that the markets are relieved that the news was not even worse.

Ah, yes. If you have talent for making bad news into good, your government needs you! Many positions are available. Please apply NOW.
Cheers,
Carolyn

Sarge comments on the spin too:

Retail Sales Lowest In 5 Months - Associated Press

Stocks Move Higher on Strong Retail Data - Associated Press

Yesterday it was silent cartel member and ex-silver price rigger AIG. Gold Cartel honcho and price rigger extraordinaire, Citigroup, made the news too:

By The Associated Press
Monday, February 14, 2005

http://biz.yahoo.com/ap/050214/france_citigroup_4.html

PARIS -- France's treasury penalized Citigroup Inc. on Monday, giving it a lower ranking on a list used to award government business, and said the bank's controversial 12.4 billion euro ($16 billion) bond trade tarnished European markets.

The treasury said New York-headquartered Citigroup was assigned a ranking of sixth out of nine financial institutions in its overall 2004 league table list -- a ranking that would have been higher if not for the August trade. The ranking helps determine which banks
are awarded lucrative bond syndication and derivatives trading mandates, or even lead roles in state privatizations.

"Citigroup created havoc in European government bond markets," said Bertrand de Mazieres, the chief executive of the French Treasury. "We told Citigroup that they had tarnished the image of European government bond markets and that this was regrettable."

The comments are the first public show of displeasure from a European treasury at Citigroup's actions, and the first concrete sign that the matter has impacted the bank's business prospects….

The Frankfurt state prosecutor is assessing whether six Citigroup employees involved in the trade are guilty of manipulating the market.

-END-

Newmont let off the hook:

By The Associated Press
Tuesday, February 15, 2005

http://biz.yahoo.com/ap/050215…t_mining_indonesia_2.html

DENVER -- The Indonesian doctor who accused Newmont Mining Corp. of
poisoning villagers near its Minahasa gold mine there has retracted her allegations.

Dr. Jane Pangemanan sent a letter to Indonesian police earlier this month saying her complaints lodged against Newmont that claimed the company's mine waste disposal had caused diseases among local villagers were "premature."

"The accusations I made ... claiming that the tailings produced by (Newmont's Indonesian subsidiary) caused the disease suffered by some residents of Buyat Pantai village were premature because there was never any scientific, comprehensive, detailed and integrated proof," Pangemanan wrote in a letter to police. Dow Jones got a copy of the letter from Newmont…

-END-

It appears The Gold Cartel, failing to keep gold down as planned, went after the gold shares for the second day in a row. The XAU dropped .49 to 94.86, while the HUI sank below 210 support to finish at 208.12, down 2.29.

Agnico-Eagle has been bucking the two day share downtrend. It rallied 56 cents yesterday (4.4%) and shot up another 32 cents today to $13.70. Fidelity announced an SEC filing of a 10.4% stake in the stock.

AEM
http://new.stockwatch.com/swne…utilit_snapsh_result.aspx

What is particularly irksome in addition to the way the price manipulators work the gold shares, is the way they take gold down constantly in the Access Market immediately after a price-capping day. They did so yesterday and today gold is already down 60 cents. Always the same crud and no one says anything but our camp.

Backed up by evidence of two days of gold price-capping, it is patently obvious The Gold Cartel and Working Group on Financial Markets are doing what they can to keep gold under control as Greenspan speaks before the Senate and House tomorrow and Thursday. There is no reason to believe they will let up before he finishes. However, with commodity prices so firm and few reasons for the dollar to make serious advances on the horizon, gold and silver should take off within a week. And, who knows, should The Gold Cartel be surprised in the next couple days by some unforeseen event, the specs could pour into both markets and make life miserable for the bad guys sooner rather than later.

GATA BE IN IT TO WIN IT!

MIDAS

February 16 – Gold $425.20 down 40 cents – Silver $7.22 down 12 cents

Pathetic Gold Cartel Bombs Silver In Access Market To Influence Gold; Maneuver Fails

This quote dedicated to Alan Greenspan:

No man, for any considerable period, can wear one face to himself, and another to the multitude, without finally getting bewildered as to which may be true. —Nathaniel Hawthorne

GO GATA!!!

The last couple of days MIDAS has been documenting the capping of the gold price by The Gold Cartel. I use words like farce to describe what is transpiring because it makes a mockery of the notion gold is a free market. What is worse, it reveals how a bunch of crooks have banded together, in violation of US anti-trust laws, to fleece you out of your money. This is not a whining complaint because a market is not going our way. It is further documented evidence of a historical pattern which is unnatural to free markets and reveals market manipulation by a few for their own gain at the expense of many.

It is important to understand these Orwellians will stop at nothing to accomplish their objectives with their misguided notion the end justifies the means – sounds a bit like the Communists of old to me. Those means extended to the bombing of silver in last night’s Access market. Since they were having trouble breaking gold on its own, they resorted to attacking silver to influence gold to make it easier for them to keep the gold price in check. They wanted the drum roll for Greenspan today, who highlighted his commentary "with inflation and inflation expectations well anchored,” to have theproper resonance.

This is NO guesswork on my part as to the silver action. Having traded silver of and on for 25 years I have a pretty fair idea of how the market works, often to my chagrin. There should be a full scale investigation on what occurred last evening. Why:

*Around 8 central time in the US, silver was mauled for 17 cents on the downside. I can’t ever recall such a thrashing with no outside market event or news responsible for such a move. The euro was slightly higher at the time.

*The volume was extreme. Over 4,000 contracts, or 20 million ounces, were traded. This represents 1/5th of the Comex warehouse supply and was traded at a time when volume is normally very light.

*The significant drop was not due to some large margin call, which could account for such panic selling. Silver rose 4 days in a row. The shorts had the problem, not the longs.

*This was not professional selling, wanting to maximize profits. The same people who were bombing the Access Market in the early stages of the evening could have received far higher prices a few hours earlier by selling on the Comex at 15 to 20 cent higher prices.

As further evidence of how rigged the gold and silver markets are (and of the intentions of The Gold Cartel to interfere in the free market process), one only need to review what happened at 8:30 this morning EST. This news hit the tape:

IRAN BLAST THOUGHT TO BE FIRED FROM UNKNOWN AIRCRAFT - IRAN STATE TV

REUTERS LARGE BLAST HEARD NEAR CITY OF DAILAM IN IRAN - IRAN STATE TV

Even though some good housing numbers were released, the stock futures were simultaneously hit and the dollar fell. Yet gold, which is "supposed" to take off on news like this via "safe-haven" buying sprees, was not allowed to go higher than a dollar lower on the day for the Comex session. The euro was already .30 higher and still gold was held well in check. This is after keeping gold from going above $426/$427 the previous two days as a result of documented Gold Cartel price-capping.

I spoke last night and today with two market pros about the silver joke. From a third who saw the same hanky-panky:

Bill,
NOW we know why silver miner Hecla was down 23 cents yesterday although the metal rallied late to $7.35/oz.
Are you keeping of record of these unusual incidents?
Wistar

Iran quickly cleared up the concern over the bomb blast by stating it was no missile attack and the markets calmed down, waiting to salute Greenspan’s testimony before Congress. However, market jitters over Iran and Syria are likely to remain on the front burner:

2/15 TEHRAN (Reuters) - Iran and Syria, both locked in rows with the United States, said on Wednesday they will form a common front to face challenges and threats.

"We are ready to help Syria on all grounds to confront threats," Iranian Vice-President Mohammad Reza Aref said in Tehran after meeting Syrian Prime Minister Naji al-Otari.

Otari told reporters: "This meeting, which takes place at this sensitive time, is important, especially because Syria and Iran face several challenges and it is necessary to build a common front."…

-END-

This potential geo-political tension was ramified further by this story which surfaced late in the morning:

Iran Will Know How to Build Bomb in 6 Months - Israel
Feb 16, 8:17 AM (ET)
By Andrew Cawthorne

LONDON (Reuters) - Israel said on Wednesday arch-foe Iran was just six months away from having the knowledge to build an atomic bomb, as Tehran accused the United States of using satellites "and other tools" to spy on its nuclear sites.

The Israeli warning followed Secretary of State Condoleezza Rice's call last week for Iran to abandon any pursuit of nuclear weapons and meet its international obligations if it was to be sure of avoiding conflict.

"The question is not if the Iranians will have a nuclear bomb in 2009, 10 or 11, the main question is when are they going to have the knowledge to do it," Israeli Foreign Minister Silvan Shalom said on a visit to London.

"We believe in six months from today they will end all the tests and experiments they are doing to have that knowledge."

The chief of Israel's Mossad intelligence agency said in January Iran would have the capability to produce enriched uranium, which can be used in both power stations and nuclear bombs, by the end of 2005.

Iran's Intelligence Minister Ali Yunesi on Wednesday again denied that his country's civilian nuclear facilities were a cover for an atomic weapons program, saying U.S. satellites were spying on Iran but would find nothing as "we have nothing to hide."…

-END-

Had silver done what it did without the gold price-capping and peculiar precious metals share price action, I might have thought nothing of it. However, taken all into account, this was no fluke. It was planned. Fortunately, it appears the ruse is going to backfire.

As often has been the case over the years, we see how gold leads the dollar as far as price action goes. Gold was influenced DOWN ahead of Greenspan’s testimony and the euro soon followed suit. However, whether coincidence or not, the euro reversed course with a vengeance when the Israel/Iran story broke. Gold had turned back up first and then the euro followed on the upside, blowing right by gold as it was capped again once it came close to thinking about going up on the day. That was not to be tolerated by the cabal with Greenspan still on stage.

Now that my rant is over there is much positive news to report.

The orchestrated plan to bury gold this morning was thwarted by substantial ETF buying and HUGE physical market buy side pricing by dealers. It was enormous and surfaced when spot broke $423. This cash buying is The Gold Cartel’s Achilles Heel.

*The cabal has done all they could to cap gold three days in a row and take it down, yet the price is still at levels where they began this operation. They are losing. Once spot takes out $427, it should streak for $430.

*As mentioned in an earlier MIDAS, we expected gold to be contained while Greenspan peddled his patented performance art pabulum. The bad guys can only keep the water from breaking through the dam for so long. Once gold takes out $430/$431 and closes above that level, it will be katy bar the door.

*While negative an unwanted for a world peace scenario, tensions in the Middle East are rapidly heating up to a noticeable degree and as we saw this morning could have a major affect on all financial markets should something concrete develop. As the likelihood of conflict increases, more and more world investors are going to turn to gold. At some point, the cabal’s price-capping will do no good at all.

The US has created a real problem for itself and not an easy one to resolve. We attack Iraq under misguided pretenses and find out it has no weapons of mass destruction. In doing so 1464 US soldiers have been killed and over ten thousand have been maimed and wounded. Our military, as is well known, is stretched very thin.

The results of the recent elections were both predictable and disturbing. Iraq’s new leadership structure suggests it will move closer to Iran. It is ironic that we helped Iraq in the late 80’s to take on Iran and prevent its influence from spreading. Now, we have helped them become closer together.

In further irony, the world tension these days is over the other two "Axis of Evil" countries which have a nuclear bomb, or are acknowledged to be close to having one. So what to do? This is not good, nor likely to get any better in the months to come either. The inevitable increased tension is going to send even more investors gold’s way.