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

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May 24 - Gold $385.50 up $1.20- Silver $5.98 up 14 cents

Silver On The Move/HUI Surges On Close, Up 7 In A Row

Zitat

"There are men regarded today as brilliant economists, who deprecate saving and recommend squandering on a national scale as the way of economic salvation; and when anyone points to what the consequences of these policies will be in the long run, they reply flippantly, as might the prodigal son of a warning father: ‘In the long run we are all dead.’ And such shallow wisecracks pass as devastating epigrams and ripest wisdom.

"But the tragedy is that, on the contrary, we are already suffering the long-run consequences of the policies of the remote or recent past. Today is already the tomorrow which the bad economist yesterday urged us to ignore. The long-run consequences of some economic policies may become evident in a few months. Others may not become evident for several years. Still others may not become evident for decades. But in every case those long-run consequences are contained in the policy as surely as the hen was in the egg, the flower in the seed."- Henry Hazlitt

Silver carried the day. After an early obligatory drop to fill its gap (as mentioned in Friday’s MIDAS), silver came right back. It was only down after the opening for a few minutes on light volume when the buying showed up. Almost immediately, it went up on the day and consistently made new highs throughout the session. Much of the gains were made with a capped gold struggling to get through unchanged, even with oil up sharply.

Silver continues to put in a rounding bottom and as each day goes by gives us evidence it is sold out. The open interest fell another 452 contracts to 88,838.

July Silver:

http://futures.tradingcharts.com/chart/SV/74

The silver market was so damaged by the price managers, specs are very shy about returning to the long side, which is why the open interest continues to contract. At some point, the specs will reemerge and silver should take off. The fundamentals remain very bullish.

Gold continues to aggravate because of the continuing efforts of The Gold Cartel. Friday’s open interest dropped an enormous 7847 contracts on the rally, which tells us the specs were covering and the cabal forces were capping gold after the first half hour of trading to keep it within the $6 rule parameters. Eliot Spitzer is going after Dick Grasso. He ought to be going after the CFTC for gross negligence.

Comex gold option expiry is tomorrow, while the Over The Counter option expiry is Wednesday. Market commentators say dealers won’t allow gold to rise until they pass. What do you mean, won’t allow? As you will note in John Brimelow’s commentary, the establishment freely uses the word conspire in this context, yet, when it comes to GATA’s findings, they run for the hills and scoff at us (well, not so much anymore). HYPOCRITES!

Gold came in slightly lower with the dollar on the firm side and oil steady. The dollar turned around, silver moved up nicely, and oil SOARED, yet gold was held in check.

Oil has finally become the talk of the town as far as inflation is concerned. About time. Nevertheless, few in the contrived mainstream world are querying why oil is going bananas and gold is doing so poorly? How can so many be so naïve?

A large institutional type player in London, one with close associations to the gold market, is planning a major marketing campaign to introduce investors to the gold market. They have not done so for around 20 years. Their thinking is gold is in for a run over $500. However, this same group is preparing investors for a continued central bank effort to knock gold down in order to drive the individual investor away from gold. Their thinking is the French will actually sell some gold and this will be hyped up by the same propagandists we heard from the last time gold rose above $420. This is rather pathetic on The Gold Cartel’s part, but something to keep in mind. For starters, any French selling means another central bank will have to cut back under the Washington Agreement. For the caveat to this, see Philippine commentary below.

Even though this London group is very wary of what the central banks are preparing, they believe their efforts will fail, even if it works for a short while. They plan to urge investors to hold tight and add in the event the gold price is knocked down. Physical demand is just too strong. Continued buying by the Saudis etc. is real.

This same group expects the dollar to be tagged, but also that continued efforts by the Chinese, Taiwanese, Japanese and South Koreans will stabilize this fall. With their huge dollar reserves, these countries don’t want an unruly dollar debacle.

The gold weekly suggests we have seen the lows for this correction:

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

Crude oil went bonkers, taking off to $41.72, up a whopping $1.79 per barrel. After denial didn’t work, Wall Street is fessing up to the increasing inflation expectations of this rise. Yet, the 30-year US bond rose 12 points to 105 12/32. There is more and more concern the Fed is in a bind as increasing energy costs are really going to crimp the consumer, thereby rolling over our economy into a significant slowdown. Thus, even though inflation is on the rise, the Fed could very well be hesitant about raising rates, a MIDAS theme in this column recently.

How bullish can you get when it comes to gold? A one percent Fed Funds rate and inflation and oil headed much higher. The only question remains if this will lead to some startling deflationary aspects in the US economy as debt levels force various asset liquidations? If that does occur, Bernanke’s money helicopters will really go into action, which would be even more bullish for bullion.

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The John Brimelow Report

CFTC data produces Bulls

Monday, May 24, 2004

Indian ex-duty premiums: AM $5.54, PM $5.20, with world gold at $383.65 and $383.90. Adequate, and perhaps a little marginal, for legal imports. Seasonal influences appear to be at work, besides possibly the hope that world gold will slip back below $380.

TOCOM gold closed 18 yen above Friday’s close, with volume rising 31% to a still paltry 22,083 Comex equivalent. Open interest slipped the equivalent of 236 Comex lots, however, and world gold was actually $1.10 below NY’s close at the end. Japan is supplying no impulse to gold at present. (NY on Friday traded 89,725 contracts - a big 28% above the estimate -including 11,345 switches. Open interest fell steeply, by 7,827 lots.)

NY on Friday of course threw off early efforts to cap it (particularly conspicuous on ACCESS trading before the open, according to Macquarie and Standard London) and provoked the usual heavy selling on the close: (a 32% surge in estimated volume in the last 30 minutes (1/10th) of the trading day, dropping gold $2), nevertheless closing up $6.40.

UBS is impressed by the improvement of gold’s technical situation as viewed by the CFTC data:

Zitat

"…Comex trading speculators cut their gross long positions by 0.4 million ounces…while 0.65 million ounces of new shorts were added…The net long position accordingly fell by 1.06Moz and stood at 7.02 million ounces as of last week Tuesday, less than a third of the recent high of 22.5 million ounces seen in early April…" (JB emphasis)

but nonetheless expects the price to be capped until after the full expiry of the nearby options –

Zitat

"Very large open interest at the $380 strike for the Comex Option expiry (25 May) and similar positioning in the large OTC expiry the following day are likely to conspire to keep gold within a few dollars of that level until these events have passed."

(As noted on Friday, option expiries are the only occasion Bullion banks can envisage conspiracy in gold!)

A usually bearish and noted bullion dealer , for once, is a much more pronounced bull on this data:

Zitat

"CFTC data to May 18: 33 tonne fall in large speculator net long. At 86 tonnes this is the smallest since July 15 last year; in the two weeks following that position tripled and the price rose $15. Compounding the feeling of a bounce in the air, the gross short position of large speculators at around 22% of open interest is the highest since end 2001…buy to end June then reassess?"(JB emphasis)

The magnitude of the open interest reduction on Friday, combined with the unusually large underestimate of Comex volume, suggests UBS might be correct about the short term.

JB

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CARTEL CAPITULATION WATCH

The DOW (9958, down and the DOG (1923, up 9) continue to fiddle around. Yes, profits have been fine, but "Rome is burning."

The dollar closed well off its highs, rising only 2 ticks to 90.59, while the euro rebounded from a 50 point early loss to close 9 higher at 120.08. The euro closed just above its 200-day moving average of 119.69. It has been flip-flopping on both sides of this average lately. Currency markets are affected more than other markets by these averages. If the euro could stay above this average for a few days, it could really run to the upside.

The CRB, which has been all over the place as of late, went on a tear, climbing 4.72 to 274.50. Oil and coffee (76.65 cents, up 4.3 cents) led the way. Mahendra was jumping up and down about coffee the other day.

Inflation report:

MEMPHIS, Tenn.--(BUSINESS WIRE)--May 24, 2004--FedEx Freight
(NYSE:FDX) will implement a 5.9 percent general rate increase effective June 14, 2004. The increase will apply to interstate and intrastate traffic, and selected shipments between the United States and Mexico and Canada. Various additional adjustments will include elect minimum and accessorial charges as well as some select lanes and service areas. –END-

GATA’s Mike Bolser:

Hi Bill:

The Fed added today May 24th 2004, $6 Billion in temporary repurchase agreements and they gave notice of a permanent operation tomorrow. The amount of permanent "Desk" securities offered to the primary dealers will be posted tomorrow. The pool stands at $41.87 Billion.

Examining the DOW's moving average, we can see a sharp leveling off just in the last day which could indicate the Fed has put a floor under the DOW. This should be watched carefully as it may be a sign of stress in the Fed's labyrinthine maze of market rigs.

Energy Stress

Energy concerns aren't going away and represent, next to precious metals, the second best investment area in my opinion. For example, small, debt-free and resource rich companies in the natural gas field stand to gain this Summer and into the future for several reasons. First, since we know that the Fed has built in a 10 to 12% annual rise plan for gold it is reasonable to guess that energy costs will at least match that rate of inflation (This fact belies the old saw that gold "pays no interest"). Second, the Fed's own GSE (Government Sponsored Enterprises) paper machines, Fannie and Freddie, have created a flood of single family and multi family, energy gobbling dwellings. This has impacted the natural gas electrical energy demand in a significant manner. China is building its own strategic petroleum reserve to fuel their explosive growth and that effort has severely drained all of the excess capacity from the Middle East. The Saudis are pumping at full capacity and the world demand can't keep up.

Finally, the fully predicted geopolitical disaster Iraq has become with its terrible damage to US credibility, may require generations of effort to correct. During this time the US will undoubtedly be under an energy ration plan with benefits inuring to the smaller, efficient energy producers.
Mike

Oil report:

Bill,

Over the last couple of years crude oil has gone from $20/bbl to $42/bbl; The administration and the bubblevision hype has kept the investing public's eye off the ball by saying that oil is not a big factor in the economy anymore as it was in the 1970's. They have kept the focus on the price of the DJIA, the CPI, interest rates and employment numbers ...all of which have been kept dancing to the right tune. There has been a very clever policy of making sure the investor never focussed on anything outside the control of the Orwellians. Over the last week suddenly there has been a linkage between the price of oil and the US and World economic strength (G8 and John Snow were very emphatic this weekend). This seems to be the start of a fatal mistake...a crack in the dam. It was probably considered that oil must back off from the recent record highs, especially if Saudi obligingly gave lip service to pumping more crude and getting OPEC to raise quotas. This, if successful, would then allow the DOW to rally, the dollar to rally, gold to fall and bonds to rise as we enter the final months to the election. BUT this is a reckless gamble because as I covered in my note to you on Friday there is no spare capacity worth talking about in OPEC. Oil has done an impressive about turn today of being down 2% to being up 2%! The news channels are all over the oil story. All interviews I have seen with OPEC people have carefully spoken about raising quotas...NOT raising production. A link has been created in investors minds between the economy and oil dropping below $40...but this is not under anyone's control. Whether this was intentional or not, it seems to be a crack in the dam.
Watch this space!
Cheers
Adrian

From Reuters over the weekend on oil:

The Paris-based International Energy Agency (IEA) said earlier this month that Chinese apparent demand, which includes domestic refined product output together with net product imports, in the second quarter was expected to hit 6.26 million barrels per day (bpd).This would be 20.9 percent more than the second quarter of 2003 as year-on-year growth gained momentum, offsetting the adverse impact of the SARS outbreak in the spring of 2003. (For table "China's April crude oil imports, exports,"

–END-

From The King Report last evening:

I might add that the CFTC position of traders report released Friday on positions as of last Tuesday’s close showed another decline in the net spec long position coupled with a small rise in the crude oil price.

The NY Time’s Eric Dash and David Leonhardt report "Insiders are Selling Like It’s 1999…The surge of selling also suggests that many executives realized that stocks remain decidedly expensive, despite the bear market of 2000 to 2002. The Standard & Poor's 500-stock index closed on Friday at a price-to-earnings ratio of about 20, well above its historical average…Executives sold $14.4 billion worth of stock in the first four months of the year, up from $4 billion in the period last year, according to Thomson Financial. ‘We have been tracking insider sales since 1971, and in the last few months they have never been higher," said David Coleman, editor of Vickers Weekly Insider Report. "There has been some pullback in the last few weeks.’" http://www.nytimes.com/2004/05…33-IZsLuNva5EbXjKFM+7bRPQ

-END-

Some insight from Australia into the shenanigans of the corrupt ones:

Bill,

I forgot to mention this at the time but just prior to the Silver Route last month when we were at $8.00 Goldman Sachs (who are the main counterparty of my broker in the spot market) actually went sniffing around the desk at my broker (and presumably their other clients as well) to get a full map of the rather large spot silver holdings that were on the books at the time. I was told that they wanted to be aware of these positions (ie how many people and the individual magnitudes) in the event that they were presented with any possible large liquidation orders outside of New York Hours!. Seemed like an unusual request at the time and I thought nothing more of it – but looking back in retrospect this confirms in my mind that these bums must have known what was coming.

Regds
David

A heads-up from Aussie land:

Urban apartments in market 'free-fall'

By Barclay Crawford
May 22, 2004

DESPITE the best efforts of real estate agents in the nation's biggest property market - Sydney - prices continue to drop, with one senior property economist claiming inner-city apartment prices were going into free-fall.

Raine & Horne's midweek auction results for Sydney's exclusive eastern suburbs show just nine of the 31 properties listed for auction were sold - less than 30 per cent - and of those, four were priced above $1.6 million.

Of those not sold on Wednesday and Thursday night, nine were withdrawn from sale due to lack of buyer interest.

Ray White sold only three of the nine properties listed for sale in Bondi on Wednesday night.

Experienced property economist Akis Haralabopoulos, from Alpha Economics, said prices in inner Sydney were being smashed by the combined effects of two interest rate rises, the Carr Government's new 2.25 per cent tax on investment property and an oversupply in apartments.

-END-

Ray DeMoss, staunch GATA supporter and Café member pictured in the Smart Money Magazine gold article, will love these pictures:

god bless the children of iraq

http://www.ryano.net/iraq/?947672

Gold demand up, supply down:

Aussie gold output hits record low
14:03 AEST Sun May 23 2004

Australian gold output fell to its lowest level in a decade last quarter as heavy rain from tropical cyclones disrupted production.
Gold output in the March quarter totalled 64 tonnes, or 2.1 million ounces, down seven per cent on the previous corresponding quarter and 12 per cent on the last quarter…..

-END-

MORE EVIDENCE GATA is correct and our assertions are right on the money - from GATA's Mihaly in the Netherlands:

hi bill,

A few weeks ago I reported the central bank gold holdings of EU countries. It's time to look a bit further....today:

The Philippines, 95% of their gold left the country (total holdings were 225 tonnes in 2000):

http://www.bsp.gov.ph/archive/…2000-11/news-11172000.htm

ARCHIVE
17 November 2000 - News Releases

Shipment of Gold Reserves

The Bangko Sentral ng Pilipinas has recently received inquiries about the airway bills issued by an airline for the gold bars shipped by the Bangko Sentral. The shipping of gold bars out of the country has been part of the gold operations of the BSP since its establishment in 1993. In fact, numerous countries also ship their gold reserves to a bank account located outside their respective country, for example, an account with the Bank of England or Federal Reserve Bank of New York, so that the gold can be used for international financial transactions.

As of 31 October 2000, the Bangko Sentral has gold reserves valued at approximately USD1.86 billion. Of these, about 95% had been shipped out of the country via a location swap transaction with an accredited international financial institution. Under a location swap transaction, the Bank’s counterparty delivers an equivalent amount of gold to the BSP’s account at the Bank of England after they take delivery of gold from the BSP’s vault and ship the gold out of the country. The counterparty can ship the gold taken from the BSP to another destination other than London where they have their refinery, vault or buyer, and use gold that is already in London to deliver to the BSP’s account at the Bank of England. This way, the counterparty and Bangko Sentral both save on the cost of shipping.

The Bangko Sentral ships its gold reserves to its account at the Bank of England so that the gold reserves may be used for investment in the international market. For example, the BSP’s gold reserves can be deposited with accredited foreign financial institutions, in the name of the Bangko Sentral, to generate interest income. The shipments are always approved by the Monetary Board and properly documented.

(Really nice to see how this works.....95% gone/in the market!, Mihaly)

http://www.imf.org/external/np/sta/ir/phl/eng/curphl.htm

PHILIPPINES

Last Updated: April 30, 2004

International Reserves and Foreign Currency Liquidity

(4) gold (including gold deposits and, if appropriate, gold swapped)5
3,317.01

Current Data: In Millions of US Dollars (end of period)

greetz
Mihaly

This is a perfect example of how the IMF and gold establishment (World Gold Council and GFMS) are deceiving the world about how much gold the central banks really have in their vaults. All of this Philippine gold which is swapped or leased out is counted as gold reserves on their books, yet the GOLD IS GONE! This is part of the extra 11,000 tonnes GATA discovered was swapped/leased in this very manner to clandestinely suppress the gold price. This SCHEME is ongoing even now. The Philippines think they can get their gold back. How? They will drive the price to the moon if they try. The supply/demand deficit is already over 1500 tonnes per year and mine supply is only 2500 tonnes per year.

The IMF and Gold Cartel are perpetuating a FRAUD, one which will end badly, worse than Enron and with far more reaching consequences!

Silver scarcity talk is slowly creeping its way back:

Bill, I met you in Calgary along with jason hommel. A dealer Ideal with on a recent purchase gave me 10 0z bars instead of 20's or 50's or 100's ! He said he cannot get anything larger anymore! We sure must be getting close to the end of the road! He asked me too if I wanted to lease out some of my holdings! I think it is only a matter of time before the whole thing blows because the silver has to come from somewhere? Look forward to your daily encouragements especially during this last tough dip. I have to admit I sold 80% of my shares, but wait I bought them back two days later at close to the same prices because there is really no other place to put one's money and we must have faith. There is more Gold backing those shares than there is the Cad$ (200000 oz I believe) Also, do you think it may be wise to take delivery of share certificates of your gold shares in case of a bank melt down? look forward to your comments and your column daily, Keep up the good work. It is only through people like yourself that people like myself can vote with our dollars and eventually we move the market.
***

Some thoughts on the $6 rule:

Dear Bill,

I hate to say it, but I actually LOVE the $6 rule. I've been trading the financial markets for over 20 years, both professionally and personally, including 10-years of trading Treasuries and junk bonds institutionally for a sell-side dealer. In 20 years I have NEVER seen a more predictable trading pattern than can be exploited for relatively riskless profits. As long as the cabal has the ability to manipulate the market in this fashion, for the time being anyway, gold-bugs may as well capitalize on the opportunity rather than rant and rave about the illegal manipulation. Both times the June gold contract was up over $8.00 this week, I shorted a few contracts and covered for nice profits right before the COMEX closed. I know this will end sooner or later but I equate this to finding loose change on the floor of a bar - I always bend down and pick up anything over a penny.
Dave K.

Dave, I pick up the pennies too!

Some feedback from South Africa for a miners advocate who knows of GATA:

Mr Murphy:

If you are not the right person to be speaking to about relevant information for Anglogold specifically, could you perhaps point me to someone ? I would like to raise these issues from a south african socio economic perspective. Thats my concern. And no one has really done that in this country, except for you. I'd like to get some answers.

I would be most grateful. And so would the 200 000 mineworkers in this country if I could shed some light on what's causing all these 'retrenchments', and why. I have access to them - they are my primary concern, as I believe they are a group which does not always have the opportunity or the right to speak out, all things considered. So even if they were in any way being mistreated, or suffering as a result of the actions of the market etc, they wouldnt even know why. I want to speak to Mr Godsell on behalf of all the men that have worked underground to make Anglogold the gargantuan corporate entity it is today.

Kind regards,
Miss Suiko Alston

With 15 minutes to go the HUI was down a few ticks for the day. All of a sudden it went ballistic, shooting up to 194.63, up 3.72. What a surge! There is some resistance in this area, then little until 210. The XAU finished at 86.91, up 1.09.

Something to note on Golden Star Resources ($5.24, up 14 cents). The short open interest went from 6,440,765 to 14,111,376 from April 15 to May 15. This 126% increase was the third largest on the entire Amex. Wheaton River is the only other one which was greater. It is reasonable to conclude GSS ought to really POP when gold surges towards $400 again. Could be one heckuva short squeeze.

The HUI has now crept its way up and stands 30 points off its spike low. It has corrected close to 33% back towards its highs. Those who stepped aside breathed a huge sigh of relief. Good for those of you nimble enough to sell way up there, or even slightly above here. Now what, however? Do you chase a market which is up 7 days in a row, or wait for setbacks? Many of the smaller gold companies are comatose and offer great entry opportunities for those looking to get on board this historic investment opportunity.

Those who wait too long might be left behind. Friday I brought up Seabridge Gold and what a fine company it is. Don’t know why, but Seabridge (SA on the Amex) jumped 20% today to $3.30, up 55 cents, - and this with Canada out for Victoria Day. It is now up 50% off its lows. Other quality explorations are likely to do the same in the very near future.

GATA BE IN IT TO WIN IT!

wasserzeichen

Ist doch schon fast Rutine bei KITCO!

Gold hat trotzdem heute bereits fast die 390.- geschafft!

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Gold futures continue rebound
Key mining indexes rise to highest level in three weeks

Gold for June delivery tacked on $3.10 to trade at $388.80 an ounce on Nymex.

The contract reached $390 earlier -- that's its highest level since May 7.

http://www.marketwatch.com/new…%2D8CA8%2D083576F3A909%7D

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Dental clinic robbed of gold tooth material

http://mdn.mainichi.co.jp/news/20040525p2a00m0dm002000c.html

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LATEST NEWS

9:32 AM MDT Tuesday

Gold miner reports higher losses

Mining company Canyon Resources Corp. lost $5.7 million on revenue of $1.7 million for the three months ended March 31.

Canyon (AMEX: CAU), based in Golden, last year during the same period recorded a $1.9 million loss on revenue of $9.3 million.

The company restated its net loss because of an accounting change related to its stock option plans.

The gold miner said revenues fell because of a drop in production. The company shut its Briggs Mine in California in April, which brought in 5,681 ounces during the first quarter. Canyon said the net loss rose because of higher unit costs of sales and lower revenues, even as the price of gold rose.

© 2004 American City Business Journals Inc.