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

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.

*Perhaps today’s oil price action is revealing/reflecting concern over what lies ahead. Oil was firm early on, climbing sharply to $48 per barrel. When bearish oil stats (see below) were announced at 10:30 AM, the price cratered below $47 per barrel. However, the price crept back to unchanged and then exploded late to finish the day at $48.33, up $1.07 per barrel on the session. Technically, in the commodity markets we had yet another outside day key reversal to the upside with oil doing what it did.

*Silver managed to climb back and closed higher than where it traded most of last evening and most of this morning. Those who sold in the hole are now trapped if they were new short positions.

*The gold open interest rose 2515 contracts to 262,589, as a result of new spec buying and cartel selling. Still, this is a relatively low number and leaves room for the specs to power gold through $430. The silver open interest rose 878 contracts to 96,899 and is also relatively low. Plenty of room for the specs to pile in here too and easily take silver to new highs.

April gold
http://futures.tradingcharts.com/chart/GD/45

Gold filled the near-term gap it left right below the market after a previous gap opening. Having recovered nicely on the day after filling that gap, gold was strengthened from a technical standpoint and has built strength to take it through $430.

Nothing wrong with that gold chart. None at all. Gold broke out on Monday, taking out a well-defined downtrend line. During the last two days of cabal selling, it has held above its breakout point. Gold is warming up to go much higher, along with silver.

The John Brimelow Report

Sensible Resource Investor

Wednesday, February 16, 2005

Indian ex-duty premiums: AM $5.75, PM $6.69, with world gold at $424.70 and $424 .Adequate, and ample, for legal imports. Reserve Bank pressure on the rupee might have abated.

TOCOM selling pressure might have abated, too. On volume equal to 17,129 Comex (-42%) open interest fell the equivalent of only 302 Comex lots. The active contract went out up 5 yen, but world gold was down 25c, at $425.25. (NY yesterday traded 49,926 contracts. Open interest rose 2,515 lots.)

Shanghai gold, reopening for the first time since the 4th, showed slight (4-50c) premiums. An effort to rally gold yesterday in NY hours was once again defeated by determined selling in the upper $420s. ScotiaMocatta says:

"Gold started the New York session 425.20/425.70 and soon worked its way higher as both Comex based funds and New York dealers were noted buyers. The price topped out at 427.10/427.60 but …Overseas sellers seemed to catch the market positioned long, helping to force gold to the session low of 423.50/424.00. The sell off allowed scattered resting scale down physical buy orders to be filled."

Once again the absence of visible short covering has to mean that fresh buying was more substantial than the open interest numbers superficially suggest – and therefore the selling too.

Various alarming news events notwithstanding (and how much more alarming can the Middle East news get, short of war?) gold is clearly capped by a serious seller in the upper $420s.

One is struck by a very sensible commentary on the IMF posted on the relatively new Resource Investor web site:

"…whatever happened to moral hazard in banking?...borrowers with shocking risk profiles were extended almost unlimited lines of credit…"Highly indebted poor country" is another way of saying "planet sized non performing loan"…this…is yet another government shakedown to save multilaterals and their creditors…"

See http://www.resourceinvestor.com/pebble.asp?relid=8307

JB

CARTEL CAPITULATION WATCH

The DOW rallied later on in the day, as is so often the case, and only closed down 2 to 10,385. The DOG followed, finishing the day at 2087, down 2 also.

In a gyrating day the dollar ended up .12 to 83.72. Most currencies were weaker against the dollar; however, the March euro was up slightly to 130.31.

US economic news:

08:30 Jan. Housing Starts reported 2.159M vs. consensus 1.925M; Building Permits 2.105M vs. consensus 2M
Prior Housing Starts revised to 2.063M from 2.004M; Building Permits revised to 2.069M from 2.021M.
* * * * *

The housing news was better than anticipated. The industrial production news was like most of the rest of the US economic news the past two months, slightly softer:

Feb. 16 (Bloomberg) -- Production at U.S. factories, mines and utilities was unchanged last month, held back by a decline in energy demand, according to a Federal Reserve report.

The result follows a 0.7 percent rise in December that was lower than first reported, the Fed said today in Washington. The share of industrial capacity in use fell to 79 percent from 79.1 percent. –END-

The economic news out of Japan was soft also:

Japan Falls Into Recession as 4th-Qtr GDP Shrinks

Feb. 16 (Bloomberg) -- Japan's gross domestic product unexpectedly shrank in the fourth quarter, and revised figures also showed a contraction in the previous period, throwing the economy into its fourth recession since 1991.

The economy contracted at an annual 0.5 percent pace, the Cabinet Office said in a report in Tokyo today. The median forecast of 27 economists surveyed by Bloomberg News was for a 0.7 percent pace of growth in the fourth quarter.

Sony Corp., Hoya Corp. and Citizen Watch Co. have cut profit forecasts because of slowing global demand for products including flat-panel displays and digital cameras. Companies are keeping costs down by putting a lid on wages, damping the consumer spending that makes up half of the world's second-largest economy.

``The headline is obviously Japan is in recession,'' said Richard Jerram, chief economist at Macquarie Securities Ltd. in Tokyo. ``The main reason that things slowed down so much in the second half was exports, and I think that consumption was a little disappointing.'' ..

-END-

Greenspan:

Feb. 16 (Bloomberg) -- The U.S. economy has firmed, and except for food and energy prices, inflation ``has remained low'' even with interest rates that remain ``accommodative,'' Federal Reserve Chairman Alan Greenspan said.

``The economy seems to have entered 2005 expanding at a reasonably good pace, with inflation and inflation expectations well anchored,'' the Fed chairman said in the text of testimony to the Senate Banking Committee. ``The evidence broadly supports the view that economic fundamentals have steadied.''

Follow-up: Greenspan says markets remain more optimistic than business executives
Greenspan notes "exceptionally low" credit spreads and a "pervasive sense of confidence among investors".
* * * * *

00 Greenspan says fed funds rate remains "fairly low" despite past rate hikes
* * * * *

10:11 Follow-up x2: Greenspan testimony
The Chairman says that the economic fundamentals have "steadied" withconsumers helped by rising incomes and low interest rates. However,continued caution among business executives is noted. Inflation remains controlled, but Greenspan notes that slowing productivity growth could put pressure on prices in the future, though competitive pressures have limited inflation thus far. Greenspan also discusses narrowing credit spreads and the decline in long-term rates, noting many possible reasons for the surprising decline even as the Fed has hiked short-termrates. Finally, on the subject of the funds rate, Greenspan acknowledges the significant increase to date, but says that the real funds rate remains "fairly low" by most measures. Treasuries have moved lower on the testimony: 10-year (12/32) to yield 4.14%.