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

Caterpillar to increase prices 1-5 percent

CHICAGO, March 1 (Reuters) - Heavy equipment maker Caterpillar Inc. said on Tuesday it will increase machinery and engine prices by 1 percent to 5 percent effective in late spring due to rising costs of steel and other raw materials.

"This price action, first announced to dealers worldwide this morning, is in line with general economic conditions and industry factors," the company said in an 8-K form filed with federal regulators. Caterpillar shares rose 1 percent in morning trading.

Caterpillar Chief Executive Jim Owens had told Reuters Friday in an interview that the company might raise product prices again to cover escalating prices for steel and other raw materials.

The world's largest maker of construction and mining equipment had raised prices by about 3 percent in July and another 3 percent in January to offset rising costs.

Caterpillar, based in Peoria, Illinois, has been deluged with orders in the past year due to the economic recovery, rising commodity prices and accelerated federal tax breaks. It has come under fire from investors, however, because it hasn't been able to translate those sales into profits as quickly as expected due to production bottlenecks and higher raw material costs…

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The REALLY big news of the day came out of Dubai – not only for GATA but the entire gold world. Read on and and I will comment why below:

Hello Bill,
we had the chance for a short shake hands at the New Orleans Investment conference 2 years ago. Attached is a study about the planned unified GCC currency and gold, which I wrote for the Gulf Research Council, in case it is interesting for you.

All the best from Dubai, Eckart

Dr. Eckart Woertz
Vice President Fixed Income and Structured Products
CFC Securities Limited
P.O. Box 2260
4/F Al Attar Business Tower
Sheikh Zayed Road
Dubai, UAE

The Role of Gold in the Unified GCC Currency

The manipulation of the gold market since the Nineties

Various studies have come to the conclusion that gold is severely underpriced. They expect a gold price of at least USD 700; some estimates even reach USD 1500 and more. The chosen approaches are manifold and include comparisons between the gold price and money supply (M3), long term ratios of the gold price with oil and stock markets, supply and demand figures in the gold market or the

39- See Al-Alkim, op.cit., chapter 3-6.

40- Ugo Fasano and Zubair Iqbal, "Common Currency. GCC Countries Face Fundamental Choices as they head for Monetary Union," Finance and Development 39, no. 4 (December 2002), available under http://www.imf.org/ external/pubs/ft/fandd/2002/12/fasano.htm, p. 2.

______________

hypothetical amount of gold needed for a reintroduction of a gold cover clause. 41 Although the liquidity driven stock market frenzy and serious currency crisis in some emerging markets (Mexico, Asia, Russia) supported the US dollar in the 1990s and thus reduced the attractiveness of gold, the sell off in gold between 1996 and 2001 that propelled it below USD 260 is highly suspicious, as it happened during a time of increasing supply deficits in the gold market. This has led a number of distinguished experts who are affiliated with the Gold Antitrust Action Committee (GATA) 42 to assume that Western central and commercial banks have manipulated the gold market since the middle of the 1990s in order to defend the paper dollar standard. Such interference is quite reminiscent of the gold market interventions in the sixties during the establishment of the Gold Pool. The evidence collected encompasses comparisons between different kind of statistics and issuers, historical probabilities and standard deviations as well as anecdotal material about more or less obvious efforts to suppress the gold price. While this is not the place to discuss the material in great detail,43 it is important to be aware of the basic argument and its implications for the future gold price, should the paper dollar standard deteriorate further.

Based on 2000 figures, Frank Venoroso challenges the official statistics of Gold Fields Mineral Services (GFMS) and the World Gold Council (WGC) and assumes that annual mine

______________________

41- Van Eeden, op. cit.; Tim Wood, "Gold-oil link all but dead in 2004," (August 10, 2004): http://www.mineweb.net /sections/energy/oilgold.htm; H. Reginald Howe, "Dow/Gold Ratio=1 at 3000$: Don’t Laugh!," under http://www.goldensextant.com/ commentary5.html; Frank Veneroso, "Facts, Evidents and Logical Inference. A Presentation on Gold/ Supply/ Demand, Gold Derivatives and Gold Loans," (May 2001): http://www.gata.org/fv.pdf; Bill Fox, op. cit., p. 18.

42- GATA was founded in 1999, see. http://www.gata.org.

43- Frank Veneroso, Reginald H. Howe, Mike Bolser and James Turk have conducted the most important studies so far. For a thorough compilation, see John Embry and Andrew Hepburn, "Not Free and Not Fair. The Long-Term Manipulation of the Gold Price," Sprott Asset Management Special Report, August 2004 under: http://www.sprott.com.

production (2,568 t), scrap supply (602 t) and official central bank sales under the Washington Agreement of 1999 (400 t) are only partly covering an estimated world wide demand of 4,844t. Venoroso thinks that the supply gap of about 1,274 t and the supply gaps of preceding years have been closed by leased central bank gold. That leads him to the breathtaking thesis that instead of the officially acknowledged 5,000 t on lease and swap arrangements, up to 16,000 t of a total of 28,000 t may have actually left the vaults of central banks. Venoroso points out that the gold carry trade that started in the 1980s gradually went out of hand. Thereby, central banks are leasing gold to the commercial banks for a low leasing rate of about 1%. The commercial banks sell the gold in the market and invest the proceeds in higher yielding assets like treasuries, thereby earning a nice spread. As the commercial banks now have a delivery risk of physical gold to the central bank, they can hedge themselves against a gold price rise by going long on the derivative markets. Mining companies, proprietaries trading desks and hedge funds have taken the short side of these trades. Thus, on a limited base of physical gold, a gargantuan mountain of derivatives has developed. And this mountain continues to grow, although mining companies have reduced their hedges dramatically in recent years.44 To put it in a nutshell, the gold still exists in the books of central banks as receivables, and on the books of hedge funds and commercial banks as liabilities. But the actual physical gold itself has long left the vaults and now hangs around the necks of the women of the world. These women are the "ultimate longs" in the market while the banking system stays out in the rain with a gigantic derivative short position of up to 16,000 t.

___________________________

44- It is estimated that the notional value of derivative "paper gold" is 10 times higher than yearly physical production and nearly as high as all official sector gold. H. Reginald Howe, "Gold or Dross? Political Derivatives in Campaign 2000," August 2000, http://www.goldensextant.com/campaign 2000.html#anchor48727 and Howe, "Hitting the Iceberg," December 20, 2003, http://www.goldensextant.com/ commentary 26.html#anchor25233.

At current prices, it is inconceivable that this short position could be covered. A much higher gold price would be needed. This, in turn, would not only seriously hurt the profits of the banking system but would also endanger the already ailing paper dollar whose liquidity is fuelling the US and world economy alike. This is why Veneroso, Embry and others assume that an official sector of central and commercial banks has started to manage the gold price at least since the plight of the LTCM hedge fund in 1998, which purportedly held a huge short-position in gold. Occurring trading patterns suggest that apart from lending physical gold into the market, the gold price is suppressed by derivative short selling and spread trading. Similar accusations exist in the case of silver.45

This management will ultimately fail, as the supply gap will increase rather than decrease.46 Gold production is expected to decline significantly in coming years as mining companies reduced their investments in new projects during the last decade of suppressed prices. As a mining project needs 5-8 years to mature to production, this will not change anytime soon. Groundbreaking new technologies that could raise the output drastically like the discovery of cyanidation in 1887 are not likely. And epochal new discoveries like those in USA, Australia and South Africa in the 19th century47 can also not be expected, as nowadays such terra

45- The case for silver is even more compelling, as there exists a supply gap since the beginning of the eighties and there are no central bank reserves. Silver the "poor man’s gold", played a role in monetary systems until the 19th century and is also an important raw material in the electronic industry. Its long-term historic ratio to gold is 1:15, which is way above the current 1:60 and could even lead to steeper rises in price than gold. It remains to be seen if it could regain monetary importance during the unfolding crisis of the paper dollar standard, but as its use is not exclusively monetary we leave it aside here. For the manipulation story of silver, see the various articles of Ted Butler on http://www.investmentrarities.com/tbarchives. html. For silver as an investment case, see Marion Butler, "The Case for Silver," October 19, 1999: http://www.goldeagle.com/editorials_99/mbutler101899.html and various articles on http://www.silver-investor.com .

46- Rhona O’Connell, "Gold demand growth outstrips production," November 25, 2004, http://www.mineweb.net/ sections/gold_silver/393445.htm .
47- See Peter L. Bernstein, The Power of Gold…, op.cit., pp. 219-238.

incognita of mining does not longer exist. On the demand side, Western investment demand has not even kicked in yet like it did in the 1970s, while retail demand in important markets like India, Arabia and Asia remains stable or is even rising despite augmented gold prices. Additionally, other central banks than the Western ones are actually buyers (e.g. China, Russia, Argentina), as they need to diversify their dangerously one-sided currency reserves.48 That is especially true for China, which is sitting on a huge pile of USD 500 billion in currency reserves, while officially having gold reserves of only 1.6% of that amount (Table 3). Actually there are repeated rumours that in recent years China may have bought more than the 200 t that it officially acknowledges, and the reopening of the Shanghai gold market in 2001 after over fifty years of closure may not be accidental. Finally, Japan has announced that it may purchase gold as well, in order to diversify its similarly one-sided currency reserves (USD 800 BN).

The likely outcome is the current manipulation scheme of the gold price will fail like the Gold Pool in the sixties. Once it fails, it will be highly difficult and expensive to accumulate a gold reserve. This is especially true for central banks that have low gold reserves like those in the GCC countries.

Shrewd women and unprepared Central Banks: Private and official gold holdings in the GCC countries…

To read this special gold report in its entirety, go to:
The Role of Gold Digital.pdf

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Why is this SUCH A BIG DEAL?

*The last market manipulation paragraph says it all.

*This report is now circulating all over the Arab world to the right people, including the Middle East Arab central bankers, the sheiks, the money manager advisors, etc.

*The report acknowledges GATA is correct in our basic assertions.

*This report enhances GATA’s credibility enormously and ranks right up there with the Sprott Report (http://www.gata.org/SprottPressRelease.html) and the Russian central bank paper (http://www.gata.org/RCBTakesNote.html) read at the LBMA conference last June.

*The report is also a HOME RUN for GATA as far as Gold Rush 21 (http://www.GoldRush21.com) is concerned. One of the goals of GR 21 is to get the word out to the investment world re GATA’s assertions, especially that half the central bank gold is no longer there. Once the investment world understands GATA is RIGHT and we know what we are talking about, there will be a rush for gold like never seen before. This distinguished paper will go a long way to assist GATA achieving this objective, which in turn, will help make YOU a fortune.

*Most importantly, this revealing document by Dr. Woertz details reasons for the wealthy Arabs and their institutions to load their gold boat NOW. This WILL have a major impact as far as the gold price is concerned in the weeks and months to come. John Brimelow reports above on the "huge" gold demand emanating out of Turkey, which represents Arab gold demand. Wait until they read this report. With $50 to $60 oil, they have money to burn.

OK, are you happy with what happened to gold and silver today? Are you happy with what your gold shares are doing? Are you happy you are being fleeced day after day by a bunch of crooks? If not, DO SOMETHING ABOUT IT. Shame on you if you have not called up the gold company CEO’s to urge them to attend Gold Rush 21 – especially the majors. The more shareholders these CEOs hear from, the more likely it is they will consider attending. This paper ought to make it a lot easier for you to persuade them why they should be there. Please send them all a copy, even if by email. This is a MUST read for every gold company CEO. Make sure to call them back in a week and ask them their opinion of what is offered regarding the gold price manipulation in the paper and to back up their own opinions should they differ.

You might also let them know that Tami Matsufuji, President of Jipangu and Japan's "Mr.Gold," is coming all the way from Tokyo to Dawson City in the Yukon to attend Gold Rush 21. What could be their excuse for not coming?

You can sit there and moan and groan about what The Gold Cartel elitists are doing to you, or effect a CHANGE. Up to you.

Not only is the gold demand news positive coming from the Arab world, it continues to build in India also:

Yellow Metal to be Traded in Paper Form

Business Standard, Mumbai
Tuesday, March 01, 2005

http://www.business-standard.c…rtinvestor/storypage.php?
chklogin=N&autono=182101&lselect=1&leftnm=lmnu6&leftindx=6

The Union finance minister today announced that the Securities Exchange Board of India (Sebi) and the Reserve Bank of India (RBI) would work out the modalities for mutual funds to float gold-backed units which would be traded on exchanges.

These Gold Exchange Traded Funds (GETFs) will enable households to buy and sell gold in units for as little as Rs 100.

In fact, it was Benchmark Mutual Fund which first mooted a scheme of this sort around three years back but the idea did not find favour with RBI, as it felt that the prices of gold could be manipulated and it would destabilise the market. Sebi, incidentally, did not have any problems with the scheme.

Exchange-traded gold funds are a step in the direction of real estate funds and other commodity-backed funds.

Ashutosh Bishnoi, chief marketing officer at UTI Mutual Fund, said, "The necessary mechanism for this has to be put in place. The first step in this direction should be to securitise gold as an asset since the funds cannot hold them in physical form."..

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Rhody on leasing:

Hi Bill,
Gold lease rates are still in backwardation, but only in the very near term. The rate curve is still relatively elevated and flat suggesting continued leasing activity at above average levels.

Silver near term rates dropped by 25% from .20% to .15%, as did two and three month terms by .04%. Leased silver is not the source of spot silver price weakness today.
Regards, Rhody.
http://www.kitco.com/market/lfrate.html

This next report on gold is one of the most worthless I have ever read. Most of the commentary is bullish, yet concludes gold is heading back to $350. What garbage. I only bring it to your attention because it is circulating all over and I was asked to comment.

World economy: Commodities - Our forecast for gold
COUNTRY BRIEFING
FROM THE ECONOMIST INTELLIGENCE UNIT

..In 2005 the gold price will on average rise by 6% along with a continuing weakening of the US dollar against the euro. Although much of these gains will be reversed in 2006, gold will maintain a US$400/oz plus price range. Over the medium to longer term, the gold price is expected to fall back to trade around US$350/oz, just below its long-run average price…

Full report
http://www.viewswire.com/index…article&doc_id=1348077934

Compare that piece of junk to that of the paper by Dr. Eckart Woertz in Dubai.

Anecdotal input on gold demand coming from Joe and Jane in Canada:

Dear Bill, I just want to tell you how much I enjoyed Monday's Midas, the best and most encouraging in recent memory. I was especially reassured as I bought some DROOY below a buck on Friday not completely sure at the time but glad I did in hindsight. Word is getting around my cousin who is the food and beverage manager at the Barrie country club tells me that precious metals are being talked about. Also I was at the local Chrysler dealership and came across a plumbing customer of mine, a retired successful furniture store owner who told me in passing to invest in Gold, wow that really made my day, this guy has a network of equal peers and a daughter who is a federal member of parliament in Ottawa. Yes Bill, I believe our patience will pay off soon and I am looking forward to the greatest investment opportunity (especially Silver) in the history of mankind.
Sincerely grateful, Kim.

The gold shares fell as is to be expected. The XAU lost 1.71 to 97.20 and the HUI gave up 4.80 to 210.52, barely holding 210 support with a 209.97 low.

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

The Gold Cartel is making life miserable for us gold bulls. While their market rigging is often noticeable, rarely has their price-capping manipulation been THIS obvious for so many days in a row. Clearly, the cabal is petrified of the price of gold moving higher when inflation in the US is so rampant. Short-term anything can happen to the prices of gold and silver. However, the die is cast. The market manipulating bums are on a short lease:

*with commodity prices on a scamper and likely to continue to be on one for months to come.
*and with the worldwide demand for physical gold so stout and becoming more so as each week goes by.

The prices of gold and silver are going MUCH higher.

GATA BE IN IT TO WIN IT!

MIDAS

Early feedback on the gold report by Dr. Eckart Woertz:
Bill,
I just read March 1st Midas. The Woertz paper is absolutely sensational. I have lived in various countries in the Middle East for 12 years in total. What people have to realize is that gold in the Middle East is part of the culture. When you go to the shopping districts (Souks) there are rows and rows of shops selling gold. Their windows are completely yellow with the gold jewelry on display. Middle Easterners buy gold like Westerners buy electronic gadgets…gold is bought as presents, wedding dowries, investment, a pick-me-up purchase when feeling blue etc. You do not have to educate ANYONE in the Middle East as to how valuable gold is. Even the guy who sweeps the street hankers after gold. In the West you have a hard job convincing people that a brick of gold is a hell of a lot better to have than a flat screen TV or gaggle of Google shares. This report will not be mocked by the Arab press, or joked about on Arab websites as “conspiratorial propaganda.” This will fall on fertile ground. This is like Robert Mundell writing a paper saying “buy Google! it is going to a million dollars per share.” No one would hesitate because that just fits into the mindset of what an investment should look like. John Embry’s superb piece “Not Free, Not Fair” was like throwing a Molotov Cocktail into a huge stockpile of asbestos. This piece by Woertz will be like throwing a Molatov Cocktail into a store of dynamite.

I have just marked March 1st on my calendar as an historical day in this unfolding bull market.
Cheers,
Adrian

Mover Mike long term subscriber of LeMetropoleCafe.Com posted this critique of Lawrence Kudlow today.

Tuesday, March 01, 2005
The Truth, Lawrence Kudlow. The Truth!
And here's the dumbest quote of the day, courtesy of Lawrence Kudlow of Kudlow's Money Politic$ Noting that the Commodity Research Bureau index of raw material futures has not been at these levels since 1981 and then we had 10% inflation and 2% today

Yes, sometimes commodities flash inflation-warning signals. But other times commodities are better used as indicators of the global economy. Today it is the world economy that is placing higher raw material demands on commodity prices, not inflation.
If demand is causing an increase in commodity prices, those increased prices get passed along in all uses of that commodity and we experience rising prices. If the price of oil goes from $25 per barrel to $50 per barrel everything made from oil is going to reflect that raw material. Now, technically inflation is really an increase in the amount of money in circulation. Greenspan has increased the money supply at a faster rate than any of his predecessors, credit creation has exploded, yet the government tells us there is no inflation. Rather than deny the truth, Kudlow wants us to believe something silly. He should ask himself who benefits with official inflation at only 2%? He should look to the prime indicator of inflation, Gold, and ask why is the government deliberately capping the price. He should ask why gold can only go up $6.00 in a day, but can fall any amount. Who benefits by keeping our alarm bells silent. You and I buy things every day and we know the truth. We are experiencing rising prices and they are rising faster than 2%.
Mike Landfair

The Korelin Economics Report Welcomes Bob Dickinson

http://www.kereport.com

Bob Dickinson, Chairman of Hunter-Dickinson, joined Paul and I on the latest edition of The Korelin Economics Report. Helping us inaugurate our new recording studio, Bob gave our listeners an overview of his organization, which serves as the umbrella for eight successful publicly traded mining companies. Knowing that our audience would want to hear the current status of the Pebble Project, the primary asset of Northern Dynasty Minerals Ltd. (Amex: "NAK" and TSXV: "NDM"), Bob then spent the second segment of the program discussing Pebble and why it will probably evolve into the largest asset of its type in the world.

Bob Dickinson, introduced to us by Shaun and Scott Gibson of Gibson and Company – a Vancouver based marketing firm, is one of the most interesting and respected folks in our industry. It was a pleasure to visit with him and learn not only about his organization, but also about his background and his passion for the resource industry. Click on http://www.kereport.com and see if you don’t share our enthusiasm.

In each of our next two segments we featured new guests. We believe that you will find both of these individuals to be valuable additions to our program.

Joe Martin of Cambridge House introduced us to Jim Willie, editor of The Hat Trick Letter. In the third segment Jim gave listeners a brief tutorial on Petrodollars and explained why talk by OPEC governments of switching to Euros as a base currency gives US politicians the jitters.

Jeff Ferguson, a private economist from Gig Harbor, Washington, made a strong case in the fourth segment for his assertion that the manipulation of interest rates is the most damaging form of government market intervention, and the major underlying cause of business cycles. He went on to discuss the reasoning for his belief that the economic conditions prior to the Great Depression of 1929 are here again today. He also discussed why he feels gold stocks provide safety for investors in the current financial environment. To read an excellent commentary by Jeff, simply click on "complete commentary" found on the Korelin Economics Report website.

* * * * * * *

Alexander Korelin is the co-host of The Korelin Economics Report along with Paul Warren. This program is syndicated nationally on Talkstar and can also be listened to on the Internet by going to http://www.kereport.com and clicking on "recent programs". Guests pay no fees to appear on the program and neither Mr. Korelin nor Mr. Warren own any stock in the companies discussed unless it is fully disclosed.

German unemployment at unbelievable 12.6%
By Tim Wood
01 Mar 2005 at 04:26 PM

Here's trouble (note the cheeky editorializing photograph that accompanies the BBC report).
[Blockierte Grafik: http://newsimg.bbc.co.uk/media/images/39991000/jpg/_39991424_schroederap.jpg] GOTT HILF!

"5.216 million people, or 12.6% of the working-age population are out of work. It is the highest jobless rate in Europe's biggest economy since the 1930s.

"The news comes as the head of Germany's panel of government economic advisers predicted growth would again stagnate.

"Speaking on German TV, Bert Ruerup said the panel's earlier forecast of 1.4% was too optimistic and warned growth would be just 1% in 2005.

It's worth recalling Mitsui precious metals analyst Andy Smith noting the strong correlation between German unemployment and rising gold prices.
[Blockierte Grafik: http://www.resourceinvestor.com/MediaLib/Images/Home/Blog/germanunemployment.png]

In Tampa, Florida, findet zur Zeit die
2005 Global Resources Conference von BMO Nesbitt statt.

Unternehmenspräsentation
Um 11 Uhr Ortszeit ( 17 Uhr Mez ) spricht CEO Vestrum von Crew Gold.

[Blockierte Grafik: http://www.mainzelahr.de/smile/traurig/verlegen.gif]

Na gut, das interessiert wieder niemanden.

Aber noch andere Firmen sind heute dran:

10:00 am Centerra Gold Inc. Jaguar Mining Inc.
10:30 am Bema Gold Corporation Viceroy Exploration Ltd.
11:00 am IAMGold Corporation Crew Gold Corporation Inc.
11:30 am Gammon Lake Resources Inc. Nevsun Resources Ltd
12:00 pm Golden Star Resources Ltd. Pacific Rim Mining Corp.
12:30 pm Ivanhoe Mines Ltd. Red Back

Webcast ( Folien und Ton (englisch ))
http://corporate.bmo.com/conferences/2005Resources/

Einfach unter Audio Webcast sich beliebig anmelden

Noch viele andere Firmen, deren Präsentationen bereits gespeichert werden.

March 2 – Gold $432.30 down 10 cents – Silver $7.29 up 10 cents

CRB Continues To Roar Higher, Led By Oil and Soybeans

This quote for Chairman Greenspan?

"We cannot afford to differ on the question of honesty if we expect our republic permanently to endure. Honesty is not so much a credit as an absolute prerequisite to efficient service to the public. Unless a man is honest, we have no right to keep him in public life; it matters not how brilliant his capacity." --Theodore Roosevelt

It’s about time. Much to The Gold Cartel’s chagrin, gold and silver finally traded like they used to before the rigging scam. Well, for a awhile anyway. As expected, gold and silver were trounced this morning as the underwater specs who bought all of last week panicked and puked out their positions early on. Gold took out key support at $4.30 and silver stared at $7. This had the cabal forces gleeful.

The trade, bolstered with cash bids in their pockets, then stepped up to the plate and began to buy aggressively. Why not? Oil took out $52 a barrel again, then barreled ahead to take out $53 per barrel, closing at $53.05, up $1.07. The CRB, led by soaring oil and soybeans, continues to make high after new high. Gold and silver are so undervalued it is absurd.

The best news is gold and silver were able to rally back from deep holes even though the dollar held its early gains. This is good. Very good. The euro gold price rose to 329.72 by the end of the day, a new high for gold’s recovery move back up.

There is no reason gold should not rally $100 per ounce and the dollar do nothing. I have been harping on that theme for some time. The ONLY reason gold has not traded like that is because of The Gold Cartel. They are using the dollar to suppress the price and to keep gold excitement to a minimum by only allowing it to rise gradually in dollar terms. However, because the physical market is now so powerful, it is causing them fits. With commodity prices on the rise and staunchly so, demand for cheap gold continues to build and build. It won’t be long before the bums can’t handle their pitiful program any longer.

The name of the real gold game is The Gold Cartel versus the physical market, not what the dollar does. We will know when the cabal is losing it when gold takes off in all currencies. It will mean they cannot rig the price anymore with their dollar/gold trading scheme.

Still, by day’s end it was a typical gold trading performance. Other markets coming back like gold did from a $4+ hole, and then going positive, would have closed up $3 for the trading session in a stunning reversal. Not gold. Not this capped market. That would have created way too much excitement. The Gold Cartel made sure gold closed lower. After all, Greenspan was testifying before Congress. It wouldn’t look right for gold to move up sharply the same day.

The fast funds were buyers as the day wore on.

The gold open interest fell 40 contracts to 287,761. The sell-off yesterday was not due to specs running for the hills, but due to Gold Cartel pounding.

Silver was the star of the session. What a comeback after being down 14 cents in the morning. Morgan Stanley was on the buy side again. In addition, they were selling silver puts. The silver open interest sank 2297 contracts as a number of specs did head for the showers.

Nothing wrong with this gold chart:

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

Support at the $430 level is solid. Once spot takes out $437, gold ought to head for $455 in quick fire fashion.

The spot CRB continues its powerful move up. This time it gained 1.39 to 306.65.

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

The dollar rose .34 to 83.10 and the euro gave up .58 to 132.35.

The John Brimelow Report

Premium watching vindicated

Wednesday, March 02, 2005

Indian ex-duty premiums: AM $6.44, PM $7.97 with world gold at $431.30 and $428.55. Very ample and hugely excessive for legal imports. Anyone wishing to push gold below $430 had better to ready to ship a lot of physical to India.

Other markets may be interested too. Reuters this morning reported from Singapore:

"Gold dipped to a low of $430.75 an ounce in Asia -- a level that triggered fresh physical demand in Singapore. "I am not sure about other places, but demand is very good in Singapore," said one local dealer."

A bar chart of recent Turkish gold imports, acquired from Refco Research.

[Blockierte Grafik: http://www.lemetropolecafe.com…Midas/TurkishGold0302.gif]

They attribute the recent import surge to Oil prices, which is clearly wrong – oil was not particularly strong in November & December. The driving force in Middle Eastern gold demand is obviously geopolitical. Anyone who is feeling cheerful about matters in this area should read http://www.antiwar.com/lind/?articleid=5021.

One should remember that the issue here is not whether one thinks that America is likely to further embroil itself in the affairs of this benighted region, but whether the locals think that likely.

TOCOM today traded the equivalent of 21,879 Comex lots: open interest rose 823 Comex lot equivalent. The active contract was down 4 yen; world gold was down 90c. (NY yesterday traded 58,956 lots: open interest was down 40 lots.)

Mitsui-NY said frankly today:

"A weaker than expected Gold and Silver price has left many scratching their heads. After making a significant technical move by climbing above $430, and $7.50 respectively, both metals have failed…"

Various parties suggested long liquidation yesterday: ScotiaMocatta:

"…a weaker EURO convinced locals to sell out their long positions. The metal slipped to the 433.00 level ..."

Barclays:

"Gold prices are under pressure again as the dollar strengthens against the euro, persuading investment funds to liquidate long positions and cause gold prices to break through the bottom of their recent $430-438/oz trading range to a low of $428.5- this morning.

The Comex data, of course, entirely refutes this view: net, there was no liquidation at all.

Yesterday gold withstood a serious Bear raid. There was fresh shorting; but because of the physical market, gold under reacted. Indian premiums today indicate the Bears have seriously over reached. It remains to be seen how much the ever-present overhead seller will help.

JB

CARTEL CAPITULATION WATCH

The US stock market was all over the place. By the close it gave up all its mid-day gains. The DOW lost 18 to 10,811 and the DOG fell 4 to 2068. Bonds sank another 5/32 to 112 ¾.

The US stock market is set up for a substantial plunge.

Here is a real shocker:

March 2 (Bloomberg) -- Current federal budget policy is ``unsustainable'' and Congress must cut the deficit and shore up funding for Social Security and other benefit programs, Federal Reserve Chairman Alan Greenspan said.

``I feel that we may have already committed more physical resources to the baby-boom generation in its retirement years than our economy has the capacity to deliver,'' Greenspan said in the text of prepared remarks to the House Budget Committee. ``If existing promises need to be changed, those changes should be made sooner rather than later.''..

-END-

Talk about mundane commentary. That takes the cake. A well read 6th grader could say the same. Wall Street loved it. The DOW and DOG, lower before these inane comments, roared back, before selling off when oil took out $53 per barrel.

US economic news:

DOE reports crude oil inventories +2.4M barrels vs. consensus +1M barrels
Gasoline inventories reported +1M barrels vs. consensus +1.05M. Distillate inventories (1.8M) barrels vs. consensus (1.225M) barrels.
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1:22 API reports crude oil inventories +3.3M barrels
Gasoline inventories (3.9M) barrels, while distillate inventories (1.4M) barrels. April WTI crude is trading at $52.10, up $0.42 on the NYsession.
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Those numbers weren’t bullish. This was though:

March 2 (Bloomberg) -- Crude oil rose above $52 a barrel in New York after a government report showed that U.S. refineries operated at the lowest rate since October.

Refineries used 89.3 percent of their capacity in the week ended Feb. 25, the lowest since October when companies were performing repairs after a hurricane hit the Gulf of Mexico, the Energy Department report showed. Supplies gained 2.4 million barrels to 299.4 million, the highest since July. The median forecast of 12 analysts was for a rise of 1 million barrels.

``The refineries have been going at high rates all winter in order to make heating oil,'' said Phil Flynn, vice president of risk management with Alaron Trading Corp. in Chicago. ``They have to perform maintenance that has been put off and we can expect to see more of this in coming weeks.'' –END-