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

Chuck checks in for the LATE EDITION:

So far this last decline and bottoming process is echoing the one in 2002. Take a look. If so, we should move up to about 225 on the HUI followed by one more setback and then move up in earnest. It is a pretty remarkable similarity including the pessimism and disbelief although I think it is much higher this time.

We are obviously ready for a financial "event" here. Even this week the market lifted each day in the last half hour while the golds sold off each day at that time.

GSS was interesting obviously some of the massive shorts got scared but was not ready for the move. But it sets up a break out target for it, perhaps when there is some resolution of the IAM takeover. The unconcern in the stock market is matched by the degree of fear in the gold market. Fascinating!
Chuck

Commentary from a Café favorite, The King Report:

Bill Gross (Pimco) the world’s largest bond manager in yesterday’s FT: "Too much debt, geopolitical risk and several bubbles have created a very unstable environment which can turn any minute. More than any point in the past 20 or 30 years, there's potential for a reversal. We have become a levered global economy, specifically in Japan and the US. With all this consumer debt, business debt, government debt, smaller movements in interest rates have a magnified effect…"

Slate.com: "Yesterday's trade deficit figures showed that Americans continue to hurl dollars overseas in exchange for cars, oil, televisions, you name it. In theory, that's bad news, since it means the money we earn isn't stimulating domestic demand. The good news is that a lot of the dollars we export find their way back here. And while we Americans shrewdly use our greenbacks to get a lower price on things we need or desire like DVD players, many foreigners are using the cash we send them to buy stuff that Americans don't want to buy—government bonds. What a great deal! We underpay for their great electronics; they overpay for our mediocre bonds." This is Milton Friedman’s rationale for free trade. It is great until the holders of the debt change disposition. There’s nothing like living and depending on the kindness of strangers, and foreign ones at that!

Asia, with the preponderance of global population, must export massive amounts of goods to the US and Europe to import and pay for the necessities of life, particularly food. Years ago we saw a piece of research that highlighted Asian Tigers’ necessity to export to pay their food bills. Now China, India, Indonesia (1st, 2nd & 4th most populated countries) and Vietnam have joined the mix.

The Institute for Supply Management says prices paid by manufacturers for raw materials in May are near the highest level since November 1979. ISM’s prices paid by non-manufacturing companies for raw materials soared to a record in May. Good thing inflation is under control and the core is benign.

"The average for all grades of unleaded gasoline rose 36 percent this year through the end of May, according to U.S. Department of Energy figures. Passenger car prices rose 1.1 percent in May, the biggest increase since March 2003, after falling 0.2 percent in April. Costs of light trucks rose 1.1 percent after dropping 1 percent the month before." http://www.freep.com/money/business/jobs17e_20040617.htm

Inflationary pressure is building in the pipeline. Intermediate goods prices rose 1.1% in May. Core intermediate prices rose 0.9% after rising 1.1% in April, which was the largest rise since 1/95. Core intermediate good prices are +5.1% y/y, the highest increase since when October 1995.

Crude goods prices soared 2.8% in May after rising 3% in April. Core crude goods prices fell 3.8% in May but are still +22% y/y.

Ed Hyman’s (ISI) latest report is full of charts and details that show the economy might have peaked a month or so ago and inflationary pressure is building. That’s our view and prognostication. We must now watch the data and see if the stagflation keeps intensifying as Easy Al replays the ‘70s.

Derek VanArtsdalen from San Antonio:

Good morning, Bill—
Here's a quick update for your readers on the technical side of the gold/silver picture. So far, gold is tracking almost tick for tick with the U.S. dollar, although that may well change at some point for reasons you've discussed many times in "Midas." As you've said, gold will likely begin outperforming all fiat currencies on the planet and seems to be in the early stages of preparing for that.

In the meantime, no one can argue that the dollar's action has pretty well dictated what gold has done in the last few years. Oil, of course, is now also heavily involved in the equation. So, let's take a look at the charts...

First, here's a 3-year chart of the U.S. greenback:

For the most part, this chart is self-explanatory. It doesn't take a T/A genius to figure out where the dollar is probably headed: lower. Its recent strength was enough to challenge the topside of the channel (red circle), but that strength appears to be giving way to the natural forces of downside pressure. With Sir Alan pumping out dollars like there's no tomorrow, the U.S. buck is hardly worth the paper it's printed on. Anything can happen, of course, but if I were a dollar bull I sure as hell wouldn't take any comfort in the chart above. The MACD histogram is starting to contract once again, and you can clearly see what has happened each and every time it's done that. In short, look out below...

Here's the oil chart:

I've read a few articles recently whose writers predict an imminent fall in oil prices to something below $25 per barrel. If oil is indeed destined for sub-$25, there's nothing on this chart to suggest it. Some folks are looking at the price action over the last several months and anticipating the completion of the right shoulder on a head-and-shoulders formation (small green circle). However, chart patterns don't always produce the expected result, as evidenced by the much larger completed head-and-shoulders formation within the large green circle. Even though such patterns are supposed to be extremely bearish, there's no law that says they must be. As you can see, the larger head-and-shoulders pattern, which is technically about as perfect as they come, didn't result in anything except much higher prices.

So, I wouldn't put much faith in the smaller one that's forming now. In fact, the internal indicators are growing stronger, not weaker (red lines). As several writers have pointed out, we're only one major terrorist event from plus-$50/barrel oil. Good luck on re-election, Mr. Bush...

Now let's look at the price of gold itself:

I worked up this chart yesterday but didn't have it ready in time for "Midas," but you can see that we were closing in on the apex of a symmetrical triangle, which means that the price was ready to break out one way or the other. If I had gotten this stuff in on time, I would have predicted that the price would break up and out. Well, it's about 9:15 a.m. Eastern Time, and the gold price on Kitco is up about six dollars. So the breakout is a decisive one.

The measured move from this chart puts the next price objective at about $452. After that, I think $486 is obtainable in the next few months and possibly $500 by year's end. As you know, Jim Sinclair is staking his reputation on $480 gold on or before August 15th. I wouldn't want to bet against him...

Here's a 3-year gold chart for the bigger picture:

When you see things from this view, you've got to wonder what all the panic is about, eh? Sure, a $50+ price correction is painful, no doubt about it. But in the grand scheme of things gold's near-term prospects appear promising. There's nothing confusing about this chart, and I for one believe that the pronouncements of gold's death have been greatly exaggerated...

Finally, here's a price chart for silver:

The most striking thing about this six-month silver chart is the presence of the huge gaps down (two purple circles). The first one left a void around $7.80, and anyone who thinks it won't be filled is crazy. Sooner or later it will, and my bet is it'll be sooner rather than later.

Yesterday's price action broke severely up and out of the 10-week downtrend (red line) as you can see by the black price marker circled in green. Things are obviously heating up this morning in follow-through action. Also note on the chart that the internal indicators (circled in red and blue) are beginning to look quite healthy. Anyone shorting silver now is a real gunslinger and could well get taken to the cleaners in the weeks ahead...

That's about it, Bill. Hope your subscribers find these charts helpful in determining which way to place their bets. In closing, I'm including a copy of Al Thomas' words from an e-mail he sent to his subscribers this week. It contains the simplest explanation I've seen yet about the scam of fiat money.

In fact, you'd almost need a Federal Reserve board member assisting you in order to misunderstand what Al is saying. I feel it's only fair to mention Al's website is
located at http://www.mutualfundmagic.com

Here's Al's beautiful explanation of what's happening to our money even
as I write.

THE ALCHEMIST

BY AL THOMAS

Fake Money

Reach in your pocket and take out that big roll of bills. Depending on how many of them you have you feel pretty good. BUT did you know they are not worth the paper they are printed on? Huh? Let me explain.

Yes, those bills are legal tender because those guys in Washington passed a law stating they must be accepted for payment. They are Federal Reserve Notes and it states right on the bill, "This is legal tender for all debts, public and private ". That is OK, but if you go to the U.S. Mint will they redeem it in gold or silver? Years ago they did, but not since 1971.

Al most everyone has bought stock in a company. The company issues shares and each share represents a portion of the ownership in that company. It is against the best interests of the stockholders to issue additional shares unless something of equal value is added. Why?

Let ’s keep it very simple. Suppose the company is worth $100,000 and it has issued 100,000 shares of stock. The stock has a book value of $1.00 per share. If the officers of the company decide to issue another 100,000 shares to hire security guards (like soldiers), lease (not buy) an airplane, increase the accounting staff (these folks do not increase production) and pay the executives more (who will produce the same amount as they are now) you will notice that all these expenses do not add to the company ’s profits. The value of all shares is now 50 cents per share because the value of the company has remained the same. $100,000 divided by 200,000 shares is 50 cents per share.

What has all that to do with your money? You have seen in the paper that the Federal Reserve Bank (it is neither Federal nor maintains a reserve) has had an auction for Treasury Bills. Sir Al an Greenspan has authorized the printing of those T-Bills. With just paper and ink he has created billions of dollars of debt for the government. And who is the government? YOU. Each time the Fed turns on the printing presses to sell government bonds it effectively dilutes the value of the money you have. That is called inflation. Unless the productivity rate of the country increases by a like amount it devalues your
currency.

Should you care? What it amounts to is everything will cost more because your money represents less. This is monetary inflation and has nothing to do with the supply of goods. Yet some day (who knows when) those bonds will have to be redeemed. The idea of the central government is to keep watering down the money so they can pay off the debt with cheaper and cheaper dollars. This is a method of creating money instead of raising taxes yet you are paying for it.

Throughout history there have been scores of private and government banks that have issued fake (fiat) money and in every case they have failed and the holders of the fake money have lost. Will that happen this time? I would not bet against it.

-END-

Regards,
Derek

I’ve Seen This Movie Too

I sat with my boss in a sweltering but fashionable downtown eatery in Toronto in mid August 1987 having lunch – with two chaps who were the book runners for my number one client, a major bullion bank and at the time the biggest derivatives dealer in the word. One of them was a Polish immigrant, a Ph.D. in mathematics who had been recruited from then DOW 30 constituent Honeywell. While he spoke in slightly broken English, this guy was not only a genius but had represented Canada as an Olympian as a sailor. These were indeed ‘heady times’. The DOW had just broken the magical 2000 level and 5 year mortgage money was available at approximately 10% in Canada if you were on friendly terms with your local bank manager. In those days 10% money intuitively made most business deals work. Over a nice bottle of wine talk quickly turned to ‘the markets’, interest rate in particular and in a larger sense the general equity markets.

It was after a couple of ‘jars’ of wine and some banter about the equity markets that our Ph.D. friend, in his broken English informed us, "there are going to be days when the [stock] market [DOW] goes down 4 or 5 hundred points". The other three of us sitting at the table stared at him in disbelief laughing at him like he was full of crap. Given that that the largest one day movement in the DOW Jones to that point in time was about 28 points we asked him what his reasoning was for such a bold prediction. His answer was [again in broken English], "the incorrect assumptions in portfolio insurance". So, the three others of us are starting to feel our wine a little bit and we question our Ph.D. friend a little bit further. We asked him pointedly just what it was that ‘was wrong’ with the assumptions in portfolio insurance? His reply, "Simple, portfolio insurance constitutes computer generated equity trades. The more the markets move in a given direction, the more the computers will exacerbate the move in the same direction-thus the market will drop 4 or 5 hundred points easily in one day." That produced chuckles and a retort of, "By the same logic it seems the market might equally be susceptible to a 4 or 5 hundred point rise in one day?" As I’ll never forget the reply was [again in broken English], "Empirical observation I have made, things never seem to ‘crash’ up." The other three of us were dumbstruck. We asked him what made him so certain of his convictions on the equity markets? His reply, "I’ve modeled it all in my computer. It is certain to happen given the right conditions." This guy had ‘modeled’ the equity market in a computer program he created in his spare time, for fun, and determined under which circumstances it would catastrophically ‘fail’. He equated this exercise he had undertaken to a car company like FORD testing a new model in a wind tunnel for aerodynamics.

By now you must all be wondering what any of this has to do with where we are today? The answer – the analytical mind of Jim Sinclair. I wonder if Jim ever speaks with a Polish accent in broken English? Never the less I keep getting this déjà vu feeling all over again – a lot of folks who should know better have not been around the block a few times and cannot see with the clarity of Jim Sinclair. I know history tends to repeat itself [most chartists would agree], and I know I’ve seen this movie before. This should give us all reason to be deeply concerned.

Rob Kirby

SA’s gold production falls by 8,3% in Q1

South Africa’s gold production decreased by 8,3%, to 84 616,5 kg, in the first quarter of 2004, versus the same quarter in 2003, the South African Chamber of Mines said in a statement yesterday.

On a quarter-on-quarter basis, total gold production fell 10,2% as the annual effect of the December holiday period and the significant fall in the rand gold price plus domestic cost pressures placed the industry under stress, the chamber said.

For South African Chamber of Mines member gold-mines, the average grades recovered fell by 7,2%, to 4,4 g/t, in the first quarter and tons processed through the mills decreased by 2,8%.

Despite the spot gold price rising 16% year-on-year, to $408/oz in the first quarter of 2004, the further 18,7% appreciation in the rand exchange rate, to R6,77 a dollar, in the same period meant that the rand price of gold fell a further 5,9%, to R88 873/kg, the chamber said.

The average increase in total production costs, excluding capital expenditure, rose by 18% year-on-year in the first quarter of 2004 as a result of a number of administered price increases, such as the 18% increase in water costs, and high price increases in other input areas, such as steel.

Chamber of Mines chief economist Roger Baxter underlined that many of these cost increases are outside of the scope of control of the mining sector.

-END-

The gold/silver shares continue to fall further behind the moves up in both gold and silver. The XAU closed at 86.03, up 1.69.

The HUI failed to close above its 50-day moving average of 191.05. It has not done so since April 13. It also could not take out its downtrend, finishing at 189.38, up 4.58.

Placer Dome’s recent exploration success in Nevada is creating a stir. Below is a map with the location of J-Pacific's projects in Nevada's Cortez Mining District. J-Pacific's current projects in the District are noteworthy particularity in light of the current market chatter concerning Placer Dome's activities at Cortez Hills and ET Blue.

j-pac cortez property map.jpg

J-Pacific closed at 46 cents Cdn, up 6 cents or 15% on the day.

Star of the week was Samex which popped a bit more than 60%, closing at 83 cents, up 10 cents on heavy volume. Congrats to geologist Rob Kell who has worked his butt off coming up with the goods.

Over the past couple of weeks I have brought to your attention from different sources that two North American gold refiners were reporting unusually firm premiums. Comex, thanks to the price managers, had gone disconnect with the physical market, the real gold market. The market became so firm the past few days, The Gold Cartel could only cap the price rise, not hold it back.

With the cash market this strong and the specs on the sideline in a relative sense, yet poised to enter the buy side, the cabal troops are going to have a heckuva time keeping gold from taking off. With the geopolitical situation a horror show at the moment, one which is likely to worsen further, gold is likely to rise faster and go further than most market players can envision at the moment.

GATA BE IN IT TO WIN IT!

MIDAS

Appendix

California files major suit against Enron over energy price manipulation
(17/06/2004)

LOS ANGELES (AFP) The US state of California sued collapsed energy giant Enron, accusing it of massive market manipulation and fraud during a series of crippling power outages in 2000 and 2001.

The suit, filed by California's top legal official, Attorney General Bill Lockyer, seeks restitution, damages and the return of unjust profits that he said could total "hundreds of millions of dollars."

The complaint was filed in Alameda County Superior Court, near San Francisco, on behalf of the people of golden state that almost ground to a halt amid a series of rolling power shortages during the crisis.

"At the same time this corrupt enterprise successfully lobbied its friends in the federal government to block price caps and blame California, it was robbing our businesses and consumers blind," Lockyer said.

"Enron was the architect of a rip-off scheme that bled billions of dollars from our state's economy. They may be bankrupt, but we will hold them accountable. Grandma Millie is California. I am her lawyer, and she seeks
justice," he said.

The suit came less than three weeks after a series of recorded telephone conversation between Enron traders showed that the company deliberately starved the most populous US state of power in order to hike energy prices.

"They're (expletive) taking all the money back from you guys? All the money you guys stole from those poor grandmothers in California?" asked one laughing Enron trader on the tapes obtained from the US Justice Department.

"Yeah, grandma Millie, man," said another. "Yeah, now she wants her (expletive) money back for all the power you've charged right up, jammed right up her ass for (expletive) 250 dollars a megawatt-hour."

The apparent revelation of deliberate market manipulation at California's expense has national significance as top Enron official Kenneth Lay is a friend of President George W. Bush, who said during the crisis that he would not cap California's skyrocketing energy prices.

Lockyer's suit asks the court to fine Enron 25,000 dollars for each alleged commodities fraud violation and 2,500 dollars for each alleged violation of the state's Unfair Competition Law.

The suit is the latest step in a three-year-old investigation into the power crisis that lumbered California with massive energy bills that significantly
deepened its financial crisis.

"While the state reeled from the combined impact of sky-high power prices, supply shortages and rolling blackouts, the Enron defendants enjoyed massive, unprecedented profits, and extracted millions of dollars in ill-gotten gains from utilities and their customers," the suit said.

©AFP

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Also by Bill Murphy

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Hallo Leute,

leider habe ich bereits mein Pulver vershossen, aber ich bin mir sicher dass der eine oder andere noch nicht das Testabo von Lemetropolecafe hatte.
Es ist völlig unverbindlich, und wir sind hier im Board mal wieder für 2 Wochen (bis Thaiguru wiederkommt) versorgt.

Grüsse,

Silversurfer

Aus der FTD vom 21.6.2004

Edelmetalle: Übernahmegerüchte stützen Gold
Von Alexander Zumpfe

Die Entwicklung an den Devisenmärkten wird den Goldpreis mittelfristig auch weiter maßgeblich beeinflussen. Es zeichnet sich jedoch ab, dass es vorübergehend zu einer Abkoppelung des Edelmetalls vom Dollar-Kurs kommen könnte.

Die Ursachen hierfür liegen neben einer positiven charttechnischen Situation nicht zuletzt in gestiegenen Inflationsbefürchtungen auf der Welt. Analysten erwarten für die nächsten Tage eine Handelsspanne zwischen 381 und 398,75 $ je Feinunze.

Die Volatilität an den Märkten wird im Vorfeld der US-Zinsentscheidung in der nächsten Woche wahrscheinlich weiter zunehmen. Zum Wochenschluss konnte Gold kräftige Gewinne verzeichnen, nachdem das US-Leistungsbilanzdefizit auf ein neues Rekordniveau geklettert war und sich Hedge-Fonds wieder verstärkt für den Rohstoffsektor interessierten. Das Edelmetall zog bis auf 396 $ an, beendete den Handel dann aber bei 394,80 $.

Dazu trugen auch neue Gerüchte um eine mögliche Übernahme des australischen Goldproduzenten Newcrest durch die weltweite Nummer eins Newmont Mining bei. Newcrest hat Terminsicherungsgeschäfte über knapp drei Millionen Unzen in den Büchern. Marktteilnehmer gehen davon aus, dass diese Positionen dann geschlossen würden, was die Goldnachfrage steigern würde.

Nach den Verlusten der Vorwochen hat sich auch die Situation für Silber wieder deutlich verbessert. Das Metall legte am Freitag bis auf 6,02 $ je Unze zu. Sollte sich der übrige Rohstoffsektor weiter in fester Verfassung präsentieren, schließen Experten einen Anstieg bis auf das Vormonatshoch bei 6,22 $ nicht aus. Industrielle und spekulative Nachfrage stützt derzeit den Platinpreis. Zum Wochenschluss legte das Metall bis auf 811 $/Unze zu, nachdem es zuvor noch auf 765 $ gefallen war. Kurzfristig ist ein weiterer Anstieg bis auf 820 $ möglich, was die Industrienachfrage jedoch dämpfen dürfte.

Alexander Zumpfe ist Händler im Edelmetall- und Rohstoffhandel bei Dresdner Kleinwort Wasserstein.

21.06.2004 13:55:02 TECHNICALS - COMEX/NYMEX metals technical indicators

GOLD SILVER PLATINUM PALLADIUM COPPER
AUG JUL JUL SEPT JUL

Close June 18 $395.70 $5.983 $809.30 $230.00 119.25
High 396.90 6.045 812.00 234.25 120.20
Low 387.20 5.860 790.50 226.50 118.15

5-DAY M.A. 388.70 5.804 788.70 224.45 118.21
20-DAY M.A. 389.60 5.880 816.30 239.51 122.14
50-DAY M.A. 391.90 6.173 829.90 260.96 122.97

9-DAY R.S.I. 68.71 68.73 58.65 59.71 45.84
14-DAY R.S.I. 63.07 60.59 52.60 50.49 45.12

Note: Data calculated from previous close. Previous high and
low include ACCESS trading from previous session. Indicators
are based on the time periods recommended by their developers
or commonly used by technical analysts. Moving averages are
simple moving averages. RSI formulas include a smoothing factor
utilizing an exponential moving average (EMA), determined to be
the industry standard. All calculations can be made using
Reuter Graphics or Reuter Technical Analysis products.

Contract High 433.00 8.490 938.00 342.00 138.20
Contract Low 324.70 4.360 756.00 229.00 70.90
First Notice Day Jul 30 Jun 30 Jul 01 Sep 01 Jun 30
Expiry Date Aug 27 Jul 28 Jul 27 Sep 27 Jul 28

BULLISH CONSENSUS ON June 15: 24 Month Range
Low Hi
Gold 64 from 66 on June 08 13 - 91
Silver 38 from 38 on June 08 13 - 89
Platinum 54 from 64 on June 08 14 - 95
Copper 62 from 67 on June 08 08 - 88

* Bullish Consensus, Copyrighted, Market Vane Corporation, P.O.
Box 90490, Pasadena, CA 91109-0490. Phone +1 626 395 7436. The
survey expresses a percentage of bullish sentiment among
analysts and advisors. The company said 50 percent is
considered support in a bull market and resistance in a bear
market. Data are most recent available.

For prices, double click on:
-2

For related news, double click on:
[GOL] [MTL] [MET] [MIN] [GOL/X] [PLA/] [COP/X] [MINT] ["DLA"]

For updated CFTC Commitment of Traders report, double click on
<1CFTC00> for the latest week's data and <2CFTC00> for the
previous week's data. Futures/options data is on <3CFTC00> and
<4CFTC00>.
---
((New York Commodity Desk, 646-223-6040,
nyc.commods.newsroom@reuters.com))

© Reuters 2004

Na dann mach ich mal.

June 21 - Gold $393.80 down $1.10 – Silver $5.85 down 12 cents

Time For Gold To Take Out 200-Day Moving Average And $400

"If a nation decides to live by lies, it has chosen a
course of intellectual stagnation, and ultimately of political decay."
The Assassinations, 1975 (ix)… Peter Dale Scott

Gold came in $2 higher with the euro down .40, as it continues to trade on its own track. However, The Gold Cartel continues to do all it can to keep gold from going through the psychologically important $400 mark. Bullion made it to $397.20 this morning before it was turned back. Meanwhile, while gold was taken down, the euro actually rallied somewhat before closing at 120.86, down .36. The dollar finished the day up .17 at 89.60.

For the third trading day in a row, gold made its high in the first hour and then the bad guys went to work.

The "trade" was a massive buyer on the price break, buying in similar fashion as it did with gold at $384.

Reports from London have the gold market as firm, but going through summer doldrums. The outlook from England is for gold not to do much in the near term, but to take off later this year.

The Comex gold open interest fell 1943 contracts to 221,072, which is a bit strange considering the sort of rally we had on Friday. Don’t know what to make of it. Just another sign of lack of a spec interest, I guess. The Café Sentiment Indicator is running at 3, at best, and that is after gold rallied $28 off its correction low. The cabal’s effort to shift investor interest away from gold is working.

Houston’s Dan Norcini notes, "I cannot get over the continued drop off in open interest in gold. It is simply astounding to see this taking place. For the very short term, it is not all that good of a sign but I will tell you one thing - all it will take is a single event of some sort and there is incredible room for huge positions to be reinstated in this pit."

Will gold fill the gap it left on Friday, or will it be a breakaway gap?

August gold
http://futures.tradingcharts.com/chart/GD/84

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

$400 August gold is key. It has been a tough nut to crack, however, once broken, gold should take off for the upside. First step will be for gold to close above its 200-day moving average of $398.80, basis the August contract. On the continuation charts, it is $396.60.

Silver was trashed out of nowhere, dropping 30 cents in minutes – all the way down to $5.72. Very strange.

The silver open interest fell 501 contracts to 86,421.

The John Brimelow Report

A smoking gun?

Monday, June 21, 2004

Indian ex-duty premiums: AM $1.04, PM $0.82, with world gold at $394.10 and $393.90. Well below legal import point. Not only is the season adverse, with the Monsoon in full swing (apparently satisfactorily), but the rupee fell again, to a 7 ½ month low. India is not driving gold at present. For what it is worth, Shanghai is showing significant discounts also.

Neither, at first glance, is Japan. TOCOM volume did rise 36% to equal 20,350 Comex lots, with the active contract up 12 yen (although world gold was over a dollar below the NY close at the end of the Japanese day), but open interest fell quite steeply, by the equivalent of 2,034 Comex contracts, to equal 110,033 Comex. The Japanese specs appear to be taking profits after a modestly successful foray. (NY on Friday traded an estimated 60,000 lots.)

However, Reuters updated their kilo bar premium today: it continues to stand at a rather high $1. There seems to be a serious sense that this attempt at economic recovery in Japan is the best for well over a decade. In the ‘80s Japan imported gold at triple the recent rate using most of it for jewelry. If consumer sentiment is really rising, as perhaps the stock market is sensing, possibly this is why gold premiums are robust. In that case, the recently strong yen would be gold positive, cheapening imports, rather than negative, endangering leveraged gold futures players.

On Friday, of course, gold staged a spirited attempt on the technical obstacles in the mid $390s. UBS notes:

"In New York, gold opened on the lows and immediately started to rally as decent sized speculative buying was seen and this led the metal to move up to $395.00/oz in the August future where decent two-way flows were seen…We noted decent selling between $394.50 and $396.00 from various customers and this probably contributed to gold’s failure to break higher...In Asia [today], some light Australian bank selling was noted (producer related, perhaps?)"

(These repeated references to Australian producer selling, supposedly related to the $A, strain credulity. Only a producer increasing a hedge book has flexibility in size to time selling. No large Australian Miner is known to be increasing a hedge book. More likely, another type of seller is dealing through Australian Banks.)

UBS further expresses the view that, while the CFTC data showed a net spec long of 7.81 Mm ozs, they "calculate that around 2 million ounces of net long positions have been added since last Tuesday; the lack of large changes in total Comex open interest since last Tuesday is probably due to shorts covering and new longs netting out in terms of total contacts. To conclude, Comex net long positions are probably around 10 million ounces, off the lows but still less than half the record net long position seen in April."

This is actually a startling statement: in excess of 20,000 contracts of buying in three days. UBS has a good record on these "guesses". This is no producer seller.

JB

CARTEL CAPITULATION WATCH

The DOW (13,751, down 45) and the DOG (1974, down 12) sold off late.

GATA’s Mike Bolser:

Hi Bill:
The repo pool stayed on an up-track today June 21rst 2004 when the fed added $4.75 Billion in temporary repurchase agreements. The pool stand at $43.63 Billion and continues its linear trajectory, supporting the DOW. The DOW's
own 30-day ma, the green trace on the "repos" chart at
http://www.pbase.com/gmbolser/interventional_analysis
has been exceeded by the daily DOW data as the DOW pushed back up towards the trend line.

The black trend line is a manually inserted guess at the Fed's desired target trajectory. It intercepts 11,750 on Labor Day 2004. If one were to
establish a September call option for DOW 11,750 one would be riding in the Fed's apparent wake.

The DOW, along with the conspicuous bond indexes (10-year, 30-year), are simply too important to allow free trading. They are "national security" indexes the Fed keeps balanced. Gold and interest rates are the flip side of this collection of controlled metrics. If one controls gold they control the rates but not automatically. "Policy puts" must be used to steer interest rates and we know all-too-well about the gold intervention COMEX "mystery sellers".

What will rates do?

It's a common question that is the same as What will gold do? Moreover it is the same question as What will the dollar do? When GATA proved gold intervention they also proved interest rates intervention and they also proved steerage of the dollar.

The most conspicuous marker of this game is the burgeoning trade deficit which the Fed keeps ignoring. Indeed it is an axiom that the Fed ignores any uncontrollable metric. Another bad boy to be ignored is the PPI. Huge Wall Street propaganda is directed at aiding the Fed's plan. One does not hear the Wall Street Journal pounding the table on the outlandish PPI or the trade deficit.

Actually, Bill Buckler suggests that when rates go up, gold always goes up. It seems to me that gold is the horse and rates are the cart so the question on rates is answered by guessing how badly the Fed is hurting in the gold war. At this moment we know they launched an oddly furious counter attack for the last 30 days, complete with a false rally thrown in. We also know that the Fed has an important meeting in a week June 29-30 and that they are hurting on the PPI inflation numbers. Beyond that we have little else to guide us but my guess is that something will happen to gold right after the Fed meeting. Perhaps another hammer just to emphasize their "don't go there" message and then a rise.

Mike

ECB Officials Say Inflation Expectations May Become a Concern
2004-06-21 06:34 (New York)

By Sonja Dieckhoefer and Christian Baumgaertel June 21 (Bloomberg) -- European Central Bank council members Axel Weber and Klaus Liebscher said higher inflation expectations could become a concern should they persist and lead to increased wage demands.

``If inflation expectations were consistently higher they would have to flow into our analysis,'' Bundesbank President Weber told reporters at a conference in Frankfurt. ``They must not lead to second-round effects. That would be a concern.''
The ECB, which sets interest rates for the 12 euro nations, is concerned that a 34 percent gain in oil prices in the past year may prompt unions to raise their demands for higher salaries and companies to lift prices. The ECB aims to keep the inflation rate, which surged to 2.5 percent in May, just below 2 percent.

Inflation expectations ``are very important in our discussions,'' Liebscher, the head of the Austrian central bank, told reporters at a conference in Vienna. ``But it is too early to make any final judgment now.''

The comments echo remarks by ECB Chief Economist Otmar Issing published today in Germany's Handelsblatt newspaper.
``The rise hasn't been dramatic so far, but a development that gives me some concern,'' the newspaper quoted Issing as saying. The central bank would have to raise rates in the event of second-round effects, the paper reported Issing as saying….

-END-

Gold, forex reserves to rise $20-$25 bln in 2004 - Central Bank
MOSCOW. June 21 (Interfax) - The Central Bank of Russia is forecasting that Russia's gold and foreign currency reserves will expand by $20-$25 billion in 2004, deputy Bank chief Alexei Ulyukayev announced at a Monday conference organized by Renaissance Capital. The Central Bank will keep inflation within 10% and the real effective strengthening of the ruble within 7% this year, Ulyukayev said. –END-
Here's a heads-up for you:

German draft budget mute on Buba gold sale plan

BERLIN, June 21 (Reuters)- The future of a Bundesbank plan to sell gold from next year was clouded in uncertainty on Monday as Germany's draft 2005 budget made no mention of the central bank's idea to use proceeds from sales to set up a research fund.

A copy of the draft budget obtained by Reuters on Monday contains no reference to gold sales. It mentions only plans by the government to set up a "high tech start-up fund" to support young firms carrying out research and development...

Former Bundesbank President Ernst Welteke indicated earlier this year that the creation of a fund to manage gold sale proceeds would be a condition for the central bank to go ahead and use its option under an agreement among European central banks to sell 600 tonnes of the metal over the next five years.

He suggested proceeds be managed by a foundation which could use any interest generated for funding research and development or education projects.

However, Welteke has since lost his job and the Bundesbank's current position is unclear. Both his successor, Axel Weber, and Chancellor Gerhard Schroeder have only said they have "sypmathy" for the idea.

The Bundesbank declined to comment on its gold sales plans on Monday ahead of the government's adoption of the draft budget on Wednesday...

-END-

This one bears watching. If the Germans don't come out with their standard "selling gold propaganda," it could mean something has changed behind the scenes. Perhaps Welteke was really canned for lending out Germany's gold and now they can't get it back without driving the price through the ceiling!

Chris Sanders from csanders@sandersresearch.com:

"US bonds have already discounted a major round of Fed tightening over the next six months, which considering that the Fed’s new chain weighted core CPI inflation measure actually fell in May seems like an excessive amount of pre-emptive selling. This does not imply any endorsement of the accuracy of the inflation index on our part. We have thought for some time that as a measure of the value of money the government’s inflation indices are pretty useless. But that does not matter so much in an administered market, which is what we think these markets are."

Gold isn’t the only manipulated market in the US:

MAD COWS IN WASHINGTON, D.C.

By Leo M. Schwartz

June 20, 2004
NewsWithViews.com

Pandemic Infects Congress, USDA, NCBA

Cattlemen and women are one of the few ‘independents’ left in American Agriculture. That independence could soon come to an end.

Just about every Cattleman I’ve ever spoken with is fed up with the increasing burden of federal, state and local government regulations and taxation; fed up with markets being manipulated by the big packers; fed up with seeing 70 cent steers at the auction barn and $7 steaks at Krogers and Wal-mart; fed up with congressmen, senators and bureaucrats who either don’t care, or long ago sold out for NAFTA, GATT, WTO, Free Trade and the whole Globalist, New World Order ball of wax which has made American Agriculture (and just about every other sector of our economy) non-competitive.

http://www.newswithviews.com/guest_opinion/guest18.htm

-END-

More on 990 and stock market manipulation – a posting on http://www.prudentbear.com:

I read the excerpt on 990N. I am one of the biggest traders of the emini S&P in the world as far as contracts traded per day and I have been watching 990 manipulate the market now for seven months. The thing is I don't think your guys on the floor even know the half of it.

The reason this guy has been able to control the market is because he has been crossing orders with himself for months now to make the market appear as if it were trading in a certain direction, mostly long, and eventually gets the market to trade at certain price levels and then gets the support he needs.

This is an email I wrote someone a month ago about this looking for help...

I am actually writing you to alert you to this complete market manipulation and to see if you had any pull to get the word out to different traders and the media. I am one of the biggest S&P traders in the world as far as volume per day in that I average over 40,000 round turns per day on the screen in the emini. I tell you this because that is how I know one house is completely manipulating the market everyday because of all the trades I do with this guy. I know it sounds hard to believe that one person can control a world market but trust me that is what is occurring. He works for the firm Gelber which is house 990.

This is the basic premise for his game. He waits until the market is relatively slow, around 9:30 to 10:00 everyday, usually when the "paper trade" starts to subside then he begins a theme, mostly always long and he begins to buy. He is always looking for confirmation of his theme with what other people are doing.

When the market stops trading in his direction he then drops in a offer of 300 to 700 which he sees if anyone is interested in buying it. If there is no interest he then buys the order from himself, with the order actually trading. He does this enough times until he attracts other buyers which then hits price points and the market runs violently in his direction.

I am sure I do not have to tell you that this is completely illegal to do. He started doing this with 300 lots back in November, now he has made so much money doing it that he is up to 2000 lots. He is completely in control of the market (illegally) the majority of the time.

My firm and I have contacted the Merc on three different occasions with video proof that I recorded of my trading. It shows blatantly this guy crossing his orders thousands of times a day. The first person we talked to in compliance admitted that he saw something there when they reviewed the video of the trades I taped of him. He was mysteriously fired the next day.

We then came up with more examples for them to review and in the beginning claimed he wasn't doing it. We called them a third time, this time talking to the head of compliance and he finally admitted that they had the guy under investigation because they saw something, but in the meantime he is still allowed to trade and make millions until their "investigation" is concluded.

They obviously love the volume the guy is putting up and how it makes the emini S&P look from a standpoint of a liquid market. But if the public had knowledge of what this guy was doing I don't think they would be too impressed with the liquidity.

There is obviously some kind of cover-up. Do any of the pit traders you know have knowledge this is happening? And do you have any advice on how I can anonymously get the word out with what this guy is doing? I know you are not a true tick by tick "scalper," but this is getting to the point where it is starting to effect everyone in the marketplace.

Please let me know what you think.

-END-

On the SEC & Federal Reserve

Bill,
Here is a link to an article published Wed. about the DTC and SEC stock scandal. I didn't know that the

SEC got a fee from the DTC until I read this article. This is going to become a much larger story in the future.

http://www.investors.com/break…?journalid=21660437&brk=1

One paragraph:

A new staff recommendation by Annette Nazareth, director of the division of market regulation at the U.S. Securities and Exchange Commission to "outlaw" ownership of paper certificates at the same time the Depository Trust and Clearing Corporation is under intense scrutiny for alleged electronic counterfeiting has begun hitting the small public company markets, company executives, shareholders and manipulative short-selling opponents like the proverbial ton of bricks.

Who is Annette Nazareth? Well, how about the wife of Roger W. Ferguson, Jr., Vice Chairman, Member of the Board of Governors, Federal Reserve.

http://www.federalreserve.gov/bios/ferguson.htmA nice cozy arrangement?

-END-

The gold shares put in another uninspired day with the XAU closing .65 lower at 85.34 and the HUI losing 1.92 to 187.46.

The 200-day moving average for the HUI is 215.21 with the 50-day average at 190.83. These levels need to be breached for the precious metals shares to go into high gear.

J-Pacific Gold jumped another 7 cents to 54 cents Cdn.

The markets in general have been in a trading range for some time now with gold and silver also moving sideways, but more volatile than the other financial markets. My tendency is to be more gold bullish than most and more often - now is no different. The buying these days is of a quality nature and with so many specs having exited, there is room for a substantial move up from these levels for both gold and silver as they pile back in. Patience will pay off.

GATA BE IN IT TO WIN IT!

MIDAS

Aus "BUSINESS DAY" vom 22.6.2004:

Randgold gets mining licences in Angola

South African mining group Randgold (RNG) has acquired various strategic prospecting licences, mining licences and mining assets in Angola.
It said it had acquired the following alluvial diamond prospecting and mining licences:
- The Koketso Angola Joint Venture (Koketso) - a 24% interest in the Luxinge alluvial diamond mining license situated in the Lunda Norte province of Angola from Koketso for the issue of 1,319,000 Randgold ordinary shares at 18.50 rand per share; and
- Masupatsela Angola Mining Ventures (Pty) Ltd (Masupatsela) - a 20% interest in the Dando Kwanza alluvial diamond prospecting concession situated in the BIE province of central Angola from Masupatsela for the issue of 1,492,000 Randgold ordinary shares at 18.50 rand per share; and
- Quantum African Mining (Pty) Ltd (Quantum) - a 20% interest in the Somba Sul alluvial diamond prospecting concession situated in the Lunda Sul province of Angola from Quantum for the issue of 1,373,000 Randgold ordinary shares at 18.50 rand per share; and
- Trans Benguela Logistics (Pty) Ltd (Benguela) - purchase of mining equipment and assets from Benguela for the issue of 1,506,000 Randgold ordinary shares at 18.50 rand per share.

"In terms of the acquisitions Randgold will issue a total of 5,690,000 ordinary shares to the entities referred to above, at 18.50 rand per share, for a total of 105,265,000 rand, which will be listed on the JSE Securities
Exchange South Africa (the JSE) on the effective date," Randgold said.

It said that following the cessation of civil war and the return of peace and stability to Angola in 2002, the Angolan diamond mining industry was currently experiencing high growth and investment. Angola was already a large producer of rough diamonds in the world and had extensive diamond resources, principally in the North Eastern and central parts of the country.

"The acquisitions are consistent with Randgold's strategy of acquiring quality and strategic assets in the mining resource sector, in pursuit of its stated mission of being a leader in the development of mineral resources on the African continent.

"Randgold has been active in evaluating and finalising prospecting and development of appropriate diamond, gold and base metal projects in Angola, together with Angolan and South African empowerment partners. The alluvial properties acquired in terms of the acquisitions, will produce cash flows in the short term, and additional investments in alluvial and kimberlite properties are envisaged in the future."

I-Net Bridge

SUPER OSTI99,

danke für den GATA Bericht!!!

[Blockierte Grafik: http://www.interfax.ru/img/e_logo.gif]

Gold, forex reserves to rise $20-$25 bln in 2004 - Central Bank
MOSCOW. June 21 (Interfax) - The Central Bank of Russia is forecasting that Russia's gold and foreign currency reserves will expand by $20-$25 billion in 2004, deputy Bank chief Alexei Ulyukayev announced at a Monday conference organized by Renaissance Capital.

The Central Bank will keep inflation within 10% and the real effective strengthening of the ruble within 7% this year, Ulyukayev said.

osti99,

danke für die Gata-Berichte. Mußtest Du dafür ein Probeabo opfern?
(Gute Idee von Silversurfer)

Soeben bei der ASX gefunden.....JBM hat eine massive Nickelader angebohrt.......denen wird das Geld nur so reinschneien......und das gibt heuer eine Jahresdividende über 50 cent.

So isses. Hier die neue Ausgabe.

June 22 - Gold $394.90 up $1.10 – Silver $5.85 unchanged

Gold Technicals Are Very Bullish

We do not believe in ourselves until someone reveals that deep inside us something is valuable, worth listening to, worthy of our trust, sacred to our touch. Once we believe in ourselves we can risk curiosity, wonder, spontaneous delight or any experience that reveals the human spirit...ee cummings

GO GATA!!!!

For the third morning in a row gold demonstrated independent strength from the dollar. At 8:21 AM CDT gold was up $1 with the euro down .30, which was just where both ended. The MIDAS commentary this past week+ has covered the observation of very strong hand buying out there accumulating bullion, irrespective of what the dollar is doing. They are picking their spots and not paying up, however, this group is very evident and making sure they get what they are looking for.

Morgan Stanley tried to bully gold in the early going to the upside, however ran into the 500 Pound Gorilla, Goldman Sachs, which stopped the rally in its tracks. Later on local firms jumped in on the sell side after gold popped to make short-lived new highs. The cabal troops keep sending a message to the specs to stay away from gold on the long side. As long as the cabal keeps bullion below its key moving averages and $400, the scheme will work. Specs will liquidate at these levels, or even go short. Yet, I suspect The Gold Cartel could have a lot of trouble soon. Once above those levels, as oft-mentioned here of late, there is room for the specs to come piling in and that they will. This will occur if the cash buyers suddenly turn aggressive.

There is always the matter IF gold will take out $400 soon. Some are looking for gold to be pounded by The Gold Cartel when the Fed raises interest rates next week because that is their standard modus operandi. Others, like myself, think the gold market is ready to surprise on the upside because there are so few spec bulls out there and the cash market is so firm. More and more it appears traders are waiting for the June 30th Fed announcement to take positions. The markets in general have all thinned out and become very choppy.

The gold open interest continues to contract, falling yesterday to 219,443, down 1629 contracts.

Silver remains very choppy also with little selling pressure, but also with few bids showing up. There are substantial bids around $5.74, not at these levels at the moment.

The silver open interest rose 546 contracts to 86,967.

Why is it that when there is talk of central banks selling gold, it makes for a big story on the likes of Bloomberg and http://www.bulliondesk.com, yet when there is news about central banks perhaps not selling, one can only find a headline here and there?

Reuters – June 22

GERMAN GOVT HAS NO PLANS TO SET UP FOUNDATION TO MANAGE GOLD SALE PROCEEDS – SOURCE

GERMAN GOVT SOURCE SAYS UP TO BUBA TO DECIDE IF IT WANTS TO SELL GOLD

Of course, we know the answer to that question.

Some more disturbing news briefs today, which only unsettle the markets further:

Follow-up: LIRR rail service to and from NY's Penn Station is suspended -- Bloomberg
* * * * *
10:25 NY police investigate suspicious package at Brooklyn LIRR station -- Bloomberg

NY police scanner reports suspicious package at Manhattan courthouse, 60 Centre St.
The bomb squad is reportedly en route. We note that there have been many such suspicious package incidents of late; all, fortunately, benign.

-END-

Gold has built a substantial base below $400. This kind of base can support a move to $430 very easily.

August gold
http://futures.tradingcharts.com/chart/GD/84

The John Brimelow Report

Japan IS a buyer

Tuesday, June 22, 2004

Indian ex-duty premiums: AM $3.94, PM ($0.15) with world gold at $394.30 and $393.90. Below, and seriously below legal import level. (What the PM reading means is that Indian prices and world prices were separated by a gap smaller than the national gold import duty, currently equivalent to about $6.75 an ounce.) The reason for this sad state of affairs is a slump in the rupee, down to an 11 month low against the Dollar on gloom about the new government being business-unfriendly.

Things really do seem brighter on Japan, however. TOCOM volume fell 25% to equal only 15,360 Comex lots, with open interest and price virtually static (down 762 Comex and 1 yen -[active contract] - and 10c versus NY close). But Reuters reported from Singapore today:

"…Ellison Chu, a senior manager at Standard Bank London in Hong Kong (said "I was told the demand from Japan was very good in the last few weeks," Dealers in Japan said premiums to London spot prices were steady at $1 an ounce, compared with zero a few months ago…"People talk about a shortage of gold bars, and I would say that's true. It's definitely not a market rumour," said another dealer in Hong Kong. "When gold price went down to $378 a number of weeks ago, there was a mass buying that brought out all inventories. This happened everywhere," he said."

(NY traded 39,654 lots on Monday. Open Interest fell 1,629 contacts.)

JB

John also sent us the full gold premiums story, which supports what MIDAS has been reporting to you on the North America gold premiums:
Asia Gold-China slows down, premiums steady in HK

By Lewa Pardomuan
SINGAPORE, June 22 (Reuters) - China's gold purchases have slowed in recent weeks but premiums for gold bars in the key trading centre of Hong Kong were mostly steady due to tight supply and better demand from elsewhere, traders said on Tuesday.

Premiums for gold bars were unchanged at 10 to 20 U.S. cents an ounce to London physical prices in Hong Kong, which deals with mainland China, Japan and South Korea.

Gold is mostly used for jewellery and investment in Asia.

"Demand is not too strong after a long holiday in May. It's a usual situation," said Ellison Chu, a senior manager at Standard Bank London in Hong Kong. A week-long May Day break in China, the world's third-largest gold consumer, had boosted demand and pushed up premiums to as high as 40 U.S. cents an ounce.

"After When gold price went down to $378 a number of weeks ago, there was a mass buying that brought out all inventories the long holiday, demand would slow down. (But) I was told the demand from Japan was very good in the last few weeks," said Chu.

Dealers in Japan said premiums to London spot prices were steady at $1 an ounce, compared with zero a few months ago, because of the yen's strength, which makes gold cheaper for local gold buyers.

"People talk about a shortage of gold bars, and I would say that's true. It's definitely not a market rumour," said another dealer in Hong Kong.

". This happened everywhere," he said.

Some dealers said tight supplies would provide some support for the premiums, though gold prices had started to climb again because of the dollar's weakness. Investors often take profits each time prices rise, putting pressure on premiums.

In Singapore, the entry point for much of bullion trading in Southeast Asia, gold bars remained as high as 70 U.S. cents an ounce to London physical prices despite some profit-taking.

Some dealers said gold's safe-haven premium had been highlighted as Iraqi insurgents stepped up deadly attacks before the U.S. occupation authority turns over power to an interim Iraqi government in late June.

The World Gold Council said earlier in June consumer demand for gold, including jewellery and retail investment, rose 12 percent to 681 tonnes in the first quarter of 2004 compared with the same period a year earlier, despite prices hitting 15-year highs.

Spot gold peaked at $430.50 a troy ounce in January and nearly reached that level again in April. Some dealers expected gold to regain $400 in the next few weeks with help from further dollar weakness. ((Reporting by Lewa Pardomuan; Reuters Messaging: lewa.pardomuan.reuters.com@reuters.net; +65 6870 3834))

CARTEL CAPITULATION WATCH

Once again the DOW pulled off a leisurely Hail Mary rally during the late afternoon. After dropping 60 early on, it managed to close at 10,395, up 24. The DOG gained 20 to 1994. It appears The Working Group on Financial markets is working hard to hold the US stock market up until the Fed makes its decision next week and then is preparing to gun it. Will it work?

The coming US rate increase is disturbing world investors:

http://story.news.yahoo.com/ne…investors_confidence_dc_1

LONDON (Reuters) - Global investor confidence fell in June, hitting a new 2004 low as institutions hunkered down in anticipation of the first U.S. interest rate hike in four years, State Street said on Tuesday.

The U.S.-based financial services firm said its State Street Investor Confidence Index slipped to a fresh 2004-low of 85.5 points in June, down 6.4 points, the sharpest monthly fall since February. The index is now at the lowest since October 1999. –END-

Congrats to Goldman Sachs who reported stupendous profits in the second quarter, no doubt greatly aided by the collapse in the gold price which they helped to engineer with their cartel colleagues.

June 22 (Bloomberg) -- Goldman Sachs Group Inc., the third- largest securities firm, said second-quarter profit rose 71 percent, helped by revenue from trading and investment banking…-END-

Why do we even have anti-trust laws in the US when Goldman Sachs is allowed to get away with stealing from the public for so many years? The evidence is plain as day, and the authorities just look the other way.

GATA’s Mike Bolser:

Hi Bill:
The Fed added $4.25 in tomos today, an action that dropped the repo pool a
bit to $43.13 Billion. The pool's 30-day ma stays in a linear up trend phase and the DOE is much closer to its own Labor Day 11,750 trend line than it was a few weeks ago. The DOW's 30-day ma has definitely turned back up as well so we see the levitation effects of a steadily rising repo pool and the primary dealer's futures buying.

Project 990N has been all the rage this week as the shadowy group heavily buys S&P e-mini contracts to support that index. Nothing new there, just another mystery group intervening to keep a "National security index" elevated. They aren't particularly concerned who knows about it as that would serve their purposes too...intimidation. You sell, you pay the price. As Sean Corrigan so well put it in an essay about a year ago, "All government is about coercion". However, even governments sometimes run out of rope.

The PPI report is still a deep concern to the Fed and may have been the reason they hammered gold in such a furious manner this last month and the trade deficit continues its upward spiral. We must be very careful and prepared to take advantage of any gold weakness as the Fed pushes through its June 29th meeting, even though they have gold left to sell as the recent BIS forwards and swaps data show from Basel, Switzerland. The Triennial Survey is due out later this year and will have a updated total for forwards and swaps for the full reporting component of central banks. It will be interesting.

But how much of the remaining gold tonnage is really available to the gold cartel to sell below market prices? France is highly unlikely to sell even one ounce of their 3,000 tonnes, the Bundesbank is deathly quiet (from the Fed's point of view) on their much trumpeted gold sales and the major gold producers are covering their own forwards while we see central banks like Portugal, Romania, Norway, and Australia empty their own vaults. That situation suggests an increasingly stressful atmosphere for the Fed and silver may be far worse.

The two metals are markedly different in their interventional requirements. There just isn't sufficient stocks of silver as there are for gold. I have said before that the failure mechanism this time around will be different than in 1979. Which metal breaks down first will matter this time around.
Mike

Chuck checks in:

Positive Action

I like what I see here. Amidst the very pessimistic tone of the gold advisory and negative sentiment indicators we are beginning to see some good responses. To me these are part of the bottoming process and counter to the massive topping process of the regular stock market.

I still fully believe that the vast wasteland of Wall Street and America is unprepared for what is streaking rapidly down the pike both financially and geopolitically. The days of ease and comfort are drawing to a close. It is very eerie. Chuck ikiecohen@msn.com

Derek Van Artsdalen with some goodies from San Antonio:

Good morning, Bill:
Here's another brief update on the gold situation. Over the last 15 weeks or so, gold has formed a falling wedge pattern. As I've written in the past, this is an extremely bullish pattern and is relatively rare. Normally, the overall failure rate of these patterns is a slight 10%. Not bad. But it gets even better.
The odds of success increase to 98% once the price action closes above the top down-sloping trend line, which happened both yesterday and Friday (green circle). In other words, the expected failure rate has now dropped to a miniscule 2%. Now THAT'S a bet worth making!

More good news: these patterns reach their predicted price targets (see next paragraph) an impressive 88% bof the time. The internal indicators are also looking great on this chart, with the RSI showing building strength (red line) and the MACD having penetrated the zero point once again and headed back up (red circle).

The average rise from these formations upon upside penetration is 43% from the point of the breakout, with the most likely rise being AT LEAST 20%—30%. Even a 25% rise from the point of breakout on this chart (which occurred at roughly $389) takes us to $486.00 at the minimum. A 40% rise from the breakout takes us to
$544.00. Wow.

A brilliant lady friend of mine in Manhattan (also a Cafe member) who is an excellent trader is always quick to remind me that gold will probably meet heavy selling resistance once it approaches the $500 mark, and she's probably right. But that doesn't mean that gold won't break through $500 sooner or later. Also, a lot of people don't realize that when gold surpassed $850/ounce in January 1980 it
eventually fell to slightly below $300 in June of 1982, leaving a long-unfulfilled upward 50% retracement mark of $575. Will that level finally be attained
in the year ahead? I sure wouldn't rule it out.

Keep in mind, this falling wedge stuff implies relatively short-term action, meaning weeks to a couple or three months at the most. So, gold's near-term prospects should be exciting. There is one caveat, though: these patterns demonstrate "throwbacks" nearly half the time. In other words, once the price breaks upward out of the pattern, it frequently comes heading back down toward the top line before it begins its strong ascent. We need to make sure we aren't faked out if the price doesn't blast straight up immediately.

That's it for now, my friend. Keep hitting the Cabal with the one thing they absolutely cannot tolerate: the facts.

From sunny south Texas (where it's presently pouring rain),
Derek

Canadian inflation news:
POSTED AT 9:44 AM EST Tuesday, June 22
Canadian inflation jumps

TERRY WEBER
Globe and Mail Update

Canada's annual rate of inflation shot up to 2.5 per cent in May, fuelled by the biggest monthly increase in gasoline prices in more than two decades, Statistics Canada said Tuesday.

Economists had predicted a jump in the 12-month consumer price index last month on the back of higher gas prices, but most foresaw a more moderate 2.1 per cent.

In April, the annual rate of inflation was 1.6 per cent. –END-

Gold demand news:
Gold bar trading begins in Beijing

BEIJING, June 22 (Xinhuanet) -- China Merchants Bank began to release gold bars to investors here Tuesday on a trial basis, becoming China's first banking institution to offer the product that first began trading again last year after half a century, Beijing Star Daily reported Tuesday.

The newspaper quoted Liu Dong, an assistant to the general manager of the personal banking department of the bank, as saying the trading will be done manually at first as its Internet-based automatic trading system will not be available until two days later.

A total of 5 million yuan (609,000 US dollars) worth of gold bars will be up for grabs at the bank's Beijing Branch Office, the newspaper reported.

The bank would offer the trading services in other outlets in Beijing if business turns out to be good, said Liu.

China resumed gold bullion trading, another choice of investment for Chinese investors, on Oct. 30, 2003 at the Shanghai Gold Exchange after half a century closure.

-END-
Mahendra just called from the LA Airport to say hello on his way back to Nairobi, Kenya. He also says hello to Cafe members and predicts gold will reach the $480/$500 area by year end with silver reaching around $14 per ounce. His work suggests the precious metals won't really start to roar until August, yet the downside from here is very limited.

Brother Tim, a superb technician, reports in:

Hey Big Brother, Technically, gold looks poised for a rally soon. The weekly chart shows a bullish 'megaphone' pattern going back to January. The daily chart shows a head and shoulders bottom with an objective of $430 if we close over $400. The daily chart also shows an 'island reversal' going back several weeks. I'd like to see a nice close in gold tomorrow followed by a gap opening over $400. That would certainly shake a few people up. With inflation clearly on the rise and Saudi Arabia about to be blown up, the interest in gold is amazingly low. That means a lot of potential buying power if gold shows some strength. The coin market held very well on gold and silver's last downturn. The MS65 Morgan Silver Dollar is actually up 32% since the first of the year! Keep up the great work. It will pay off big time in the end!
Brother Tim.

Tim Murphy
Swiss America Trading Corp
Trmurphy@swissamerica.com
1-800-289-2646 ext 1019

Rival gold miners report higher reserves one week before big merger vote

Nancy Carr
Canadian Press
Tuesday, June 22, 2004

… Also Tuesday, Wheaton's rival suitor for Iamgold, Golden Star Resources Ltd. of Denver, which launched a takeover bid in late May, announced it has increased its total mineral resources at its Wassa gold project in Ghana by about 33 per cent.

Golden Star, which owns 90 per cent of Wassa and mines gold exclusively in Africa, boosted its estimate after completing a drilling program aimed at expanding its planned open pits at the project.

Click here: National Post

-END-

The gold shares continue to meander around, bobbing this way and then that. Interest in the sector remains very low. Astonishing with what all is going on out there in the geopolitical scene, as well as in the world financial arena.

The XAU gained 1.05 to 86.39 and the HUI lifted 1.08 to 188.54.

The big picture for gold and silver never looked better.
GATA BE IN IT TO WIN IT!

MIDAS

Entwicklung des Central Fund of Canada (Wertpapiernummer 873782), der sich seit zig Jahren auf die physische Anlage in Gold/Silber spezialisiert hat und je ca. 50 % seiner Bestände in physischen Gold bzw. Silber hält:

Entwicklung des Silberbestands:

31. Juli 2003: 14,846 Mio. Unzen
31. Jan. 2004: 19,765 Mio. Unzen
30. April 2004: 26,174 Mio. Unzen (davon ca. 99 % physischer Bestand, Rest: Zertifikat)

Der an der Börse notierte Central Fund of Canada hat Ende 2003 neue Aktien auf den Markt gebracht, die offenbar einen sehr guten Zuspruch fanden, so daß er seine Gold-/Silberbestände deutlich erhöhen konnte. Laut den letzten Quartalsberichten lag der Anteil am Barbestand z.T. unter 10 %, d.h. mind. 90 % der Gelder liegen im Form von physischen Gold-/Silberbarren bei einer kanadischen Bank.

Ich bin auf den nächsten Quartalsbericht, der demnächst ansteht, gespannt, ob diese rasante Entwicklung weitergeht.

Der Central Fund of Canada entzieht dem Markt jedenfalls mit sehr großem Erfolg massiv Silber.

June 23 - Gold $394.60 down 30 cents – Silver $5.87 up 2 cents

Never Sell A Quiet Market?

If you find a path with no obstacles, it probably doesn't lead anywhere... Frank A. Clark

GO GATA!!!!

Never sell a quiet market. Which one? Most of the financial markets have gone comatose and trendless, although the Transports made a new 52-week high and the DOW made its usual Hail Mary end of day rally. The Working Group on Financial Markets seems compelled to take the US stock market higher with President Bush’s ratings hitting a new low and Iraq falling apart.

Gold, as is so often the case, made its highs during the first hour, even with the euro down .30. After making those highs, it went down $2 on the day and then gradually recovered.

Sarge notes:

Cabal at it again. Look at how the peaks and valleys of today’s action (black line) match Monday’s action (blue line).

Interesting "M" formation that the market has made in the opening hour on 2 out of three trading days this week. Made similar patterns last week. It’s one player, executing one "plan" at the same times on different days. The "9:30 to 10:30 jog to the downside for exactly $3" plan, huh? No big secret huh?

-END-

The gold open interest rose a piddly 81 lots to 219,524.

Silver was very quiet and flopped around within a narrow margin.

The Comex silver margins were finally reduced to $2700 from $3375. The silver open interest rose a sharp 3535 contracts to 90,502, however, most of it was due to a new 1500 lot spread position.

A veteran Café member appropriately queried yesterday what good are technicals in a managed gold market? The first part of my response was, "You sound like me."

To some extent they are meaningless, especially if The Gold Cartel decides to bomb the market. This has been most apparent over the years when gold was at breakout points. However, the technicals can be very useful when used in conjunction of knowing what we are dealing with. They will become even more helpful in the months ahead because we know each month that goes by strains the amount of available gold the cabal has to throw at the market.

For years it has been my contention that the key to the gold market is the physical market vis-à-vis The Gold Cartel. Gold has rallied for 3 ½ years now, after making a low of $252 in early January 2001. During this period The Gold Cartel has probably gone through 4,000 to 5,000 tonnes of gold to keep the gold price in a controlled retreat higher. This has eaten substantially into the supply they have left.

The central banks only have 15,000 to 16,000 tonnes remaining in their vaults (out of a supposed 32,000 tonnes) and a substantial amount of this gold is spoken for, some for legal reasons and some for national policy reasons. With demand exceeding supply by 1500+ tonnes per year, the bad guys are on a short leash. At some point soon, they are going to HIT THE WALL!

The chart action, other technicals, and physical market premiums give us an indication of what is going on in the gold world and how The Gold Cartel is faring. They need to use the specs at times to continue their blatant and concerted fraud. The cabal needs their selling power, liquidation or otherwise, to assist them in their derivatives trading scheme on the Comex. The move down from $430 is a good example. That was all a set up. Cap, cap, cap at $430. Put out all the negative gold stories, wait for the dollar to turn up, or turn it up, and then assault gold, forcing the specs out of their long positions and turning them short. This is what took us back down to $370. Since $430, 90,000 longs have exited the Comex gold arena. This has allowed The Gold Cartel to cover their shorts put on at much higher levels.

The Gold Cartel has caught a break here with the Indians absent from the world market due to the weak rupee, however, gold demand is very firm elsewhere and is making up for that slack. The cabal has to determine how much of their remaining gold they are going to expend at these levels. I am sure they would prefer to turn the specs into bigger sellers here which is why they are stopping gold from going through its 200-day moving averages and $400. Maybe they plan to bomb gold on June 30th or soon thereafter at the behest of the Fed to show the investment world inflation is no real problem in the US. The cabal’s game plan could be to sell just enough to turn the specs into big sellers, plunge the price another $10 and then buy everything in sight, driving the price right through $400 later in July.

The technicals, strong as they are, don’t tell us gold will punch through $400 in the days ahead, although if this were any other market without the cabal lurking in the background, the probability of gold doing so would be extremely high. What they do tell us is even if The Gold Cartel moves again to deliberately take gold down, it will be short-lived. There are too many buyers out there that want in on the dips, especially the so-called Commercials. With the fundamentals so positive and the reasons to own gold so formidable, the specs won’t get much bang for their buck if they end up going short at in this price area. Once gold blows through the 200-day moving average, they will be forced to cover and will go long.

The move up from these levels ought to be dramatic, whether it happens within the coming week, or three weeks from now. My bet is we go up sooner rather than later. Yet, history shows those betting against The Gold Cartel on days or an event like we have coming on June 30th usually come up a loser in the short-term.

The John Brimelow Report

Seller still there.

Wednesday, June 23, 2004

Indian ex-duty premiums: AM $0.12, PM $$5.03, with world gold at $395.15 and $394 55. Well below, and possibly adequate, for legal imports. The latter might be a statistical quirk. The rupee was pushed up by Central Bank action this afternoon, and world gold happened to spike down towards the end of the Indian day. On the other hand, silver appears to be comfortably in import range with world silver at $5.85 and $5.87.

TOCOM liquidation continued, with volume edging up 5% to the equivalent of 16,085 Comex lots, and open interest slipping the equivalent of 1,370 NY contracts. Yen gold closed at a two week high, up 10 yen – this was world gold $1.25 above NY at $396.25. Reuters reports that May gold imports were 5.1 tonnes, 25% below April, but 86% up on a year ago. This is not really evidence of an import upturn – premium behaviour only got interesting since month end. (NY yesterday traded 35,551 lots. Open interest was static: up 81 contracts.)

Yesterday, as UBS dryly notes,

"Gold again ran out of steam just shy of the 200-day moving average, hitting a high of $397.00/oz for the second successive day …Gold has bounced off the 200-day moving average of $394.50 twice in the last two days and looks set to have another attempt at level today, although there has been very decent selling each time gold has approached this level."

Of course, Gold did make another attempt on the key mid $390s level – early in the morning, unusually – and was yet again turned back.

Andy, interestingly, feels it necessary to start re-positioning his guns against the idea that the Bundesbank might not actually sell gold: the first reason I have seen to take such an idea seriously.

JB

John also noted in another dispatch:

I had occasion to look at an e mail from June 3 last year:

"the sluggishness of gold in the face of favorable FX conditions remains to be explained. Mitsui-Sydney cites the familiar proximate cause:

"Gold…toyed with 367 again in early London and again in NY, but good selling appears to be capping the market at this level."

But interesting light is shed this morning on the underlying question by a Mark Hulbert column this morning on CBSMarketWatch. Hulbert is actually considering whether the 20% in the Dow this year can be judged to have forecasting significance. In the course of this, he observes:

"the market's response to trends changed dramatically in 1990. As far as I can tell, the credit for its discovery goes to Blake LeBaron, a professor of finance at Brandeis University. In research published in 2000 ("The Stability of Moving Average Technical Trading Rules on the Dow Jones Index"), LeBaron found that many trend-following systems based on moving averages stopped working around 1990."

This change of market character in the early 90s has of course long been obvious to the friends of gold.

CARTEL CAPITULATION WATCH

The DOW took off late, closing at 10,480, up 85. The DOG leaped too, jumping 27 to 2021.

The dollar closed down .04 at 89.73, while the euro fell .08 to 120.70. US interest rates were little changed.

The yen (108.49) remains the strongest currency out there recently as the news from Japan continues to improve:

June 23 (Bloomberg) -- Japan's trade surplus widened more than expected in May as global growth boosted demand for exports of DVD players and other electronics goods, helping the world's second-biggest economy extends its longest expansion since 1997.
The surplus widened to 1.28 trillion yen ($11.74 billion), seasonally adjusted, from a revised 983.7 billion yen in April, the Ministry of Finance said in Tokyo. Economists had predicted the surplus to widen to 1.05 trillion yen, according to the median of 17 forecasts in a Bloomberg News survey. –END-

Might want to keep in the back of your mind that Mahendra predicted the yen was headed for par with the dollar and eventually would go to 60 as gold soared.

GATA’s Mike Bolser, who has had the stock market pegged better than anyone in our camp:

Hi Bill:
The Fed added $10 Billion in temporary repurchase agreements and the gave notice that tomorrow will bring a coupon pass. The repo pool jumped to $38.88 Billion and will be much higher tomorrow (With the addition of tomorrow's repos) until the $25 billion expiration takes effect at the end of trading. So we see almost $50 Billion in repo power today that will stay and even grow in effect through tomorrow and will be further augmented by a coupon pass of permanent open market operations. This is a big move in repos and we should expect the DOW to move higher as a result.

Repos are government securities that can be presented by primary dealers as collateral for cash loans which then are used to enter the open markets, mostly futures markets to implement what the Fed openly calls "monetary policy". That "monetary policy" isn't gold friendly unless, for example, it is designed to take long positions after they hammer gold shares. Those who deny government intervention are in denial.

"TA" and the Gold Standard

"The pre-World War I gold standard was not invented. It just grew, starting in the 1870s when Germany joined Britain, which had defined its currency primarily in terms of gold since 1717, when Sir Isaac Newton was Master of the Mint. Increased German demand for gold pushed up its price; increased American mining of silver pushed down its price. Countries that had long tried to keep both gold and silver coins legal tender found their gold reserves falling, as people would buy cheap silver on the world market, exchange it for currency, and then bring the currency into the Treasury for gold. By the end of the 1870s nearly the whole world was on the gold standard". (J. Bradford DeLong University of California at Berkeley and NBER)
http://econ161.berkeley.edu/TCEH/Slouch_Gold8.html
For 101 years (1870 until 1971) there were no "flag break out, double top, triple bottom, teacup, over bought or over sold" conditions in the "gold market" because there was no "gold market". The governments of the world decreed that gold was to be "sold" at a fixed valuation. Drawing lines on charts in order to "predict" the future price of the most strategic commodity of all, gold, was ludicrous because everyone knew what the future held...a known gold price, set by the government. Until a fateful day in 1933 when Franklin Roosevelt changed the "price" of gold from $20 to $35 per ounce. Which TA line tracing predicted that move?

TA adherents cannot pick and choose only those minutes during the trading day when their pet theories are validated by the trading data and leave out all the rest of the minutes. IF a theory is correct it must be correct over the entire span of data. Indeed, weaknesses in a data series (no matter what the science) are precisely where the truth often leaks out. Einstein exploited the problem with the perihelion of Mercury (It was late crossing the Sun) and over turned Newton's long-held world view with his own Relativity Theory.

For the vast majority of the modern era gold has been controlled by governments as the existence of the gold standard irrefutably proves. GATA asserts that the control was heavily reapplied in 1993 and may have been in place in the mid-eighties. This assertion (ridiculed by many) is hardly a change at all given 100 plus years of previous government intervention. Indeed, the Fed Chairman himself has said he approved of central bank's "synthetic gold standard" activities. So there is no debate whatsoever about government intervention in the gold market. The only issue is why so many TA followers imagine that it's not true. They further imagine that crucial control of the commodity that sets the price of all other commodities by influencing the dollar would be left totally to a small group of market speculators. This doesn't pass any test of logic.

Either TA is valid in the gold market OR GATA is valid in its claims of intervention. They both cannot be simultaneously true. Consulting a chart to see whether gold is overbought or oversold is as useless today as it was in 1900 because the government deems gold too important to leave to the speculators. This is why GATA is consistently correct and TA has led so many astray in the gold market. Moreover, TA proponents can't admit intervention is true for to do so would undermine their service value.

It is true that technical analysis proves valid when examining non-strategic commodities or equities only because it measures the balance between buyers seeking profits and sellers avoiding losses. TA is very useful here.

Governments "fixed" the world's gold "markets" for over 100 years. Does pointing to this history of market "fixing" make one a "conspiracy theorist"? Of course not, but that pejorative is bandied about all the time on Wall Street when they wish to transmit their paper money propaganda.

The success of the early gold standard came in large measure from the fact that the US had so much gold. 25 thousand tonnes at one time (Now officially 8). Today's gold war is different and the loss of US gold is a serious threat to governments and their un-backed, inflationary paper money regimes. Public BIS data suggest that half of the purported 33,000 tonnes of central bank gold has been sold forward or swapped so it should come as no surprise that financial leaders are worried and act like it.

In such a situation it is best to get the item in question while you still can.
Mike

While I did not read the piece, I understand yesterday’s Wall Street Journal featured a story on the chemical industry, one which had to do with price-fixing (see below in Appendix, courtesy of Sarge for The Late Edition). What else is new? As GATA’s attorney at Berger & Montague told us 5 ½ years ago, "Market manipulation and price-fixing cases in the US are very commonplace."

This is what is so aggravating about the retards in the mainstream gold world. They wouldn’t know a "DUCK" if it walked right in front of them.

More of the same:

The King Report
M. Ramsey King Securities, Inc.

Tuesday’s missive mentioned that the hedge fund community was circulating notes about Gelber’s activity in the S&P futures. Yesterday a trader purporting to be one of the largest S&P traders posted a blog on the Prudent Bear chat room that gives details of alleged manipulation of e-mini S&P futures contracts. The post also alleges that the poster and his firm have reported the alleged scheme 3 times to the CME. Here is the post and the nefarious details:

http://www.prudentbear.com/bea…&sr=1&sb=1&snsa=A#M201750

Please recall that over the past several months there have been several occasions when a sudden market movement had been explained as ‘an e-mini futures error’.

Some institutional traders commented to us that there has been much grumbling about ‘the e-mini bandit’ but no one knows what is really occurring.

We did some sleuthing and discovered that allegedly there is a young trader who not long ago was a house painter. Anyway the youngster allegedly quickly made millions of dollars trading e-minis. However rumor has it that he has given back plenty.

Perhaps this is all sour grapes; perhaps not. Let’s see what the CME and regulators do.

The episode has futures traders recalling the purported Nasdaq 100 futures scandal at the height of the tech bubble. The July 26, 2000 Chicago Tribune reported the story. Our sources allege that a broker was tipping off ‘buddies’ in the crowd via pagers about his order flow. A buy order would ring a pager in a particular pocket; a sell order would ring the pager in an opposite pocket. The traders would then front run the order. Bridge News also did a story on it. This prompted a letter from some Congressmen to the CFTC and the SEC about the allegations. Here is the beginning of the letter and the link:

August 3, 2000

The Honorable William J. Rainer
Chairman
Commodities Futures Trading Commission
Three Lafayette Centre
1155 21st Street, N.W.
Washington, D.C. 20581

The Honorable Arthur Levitt
Chairman
Securities and Exchange Commission
450 5th Street, N.W.
Washington, D.C. 20515

Dear Chairmen Rainer and Levitt:

We are writing with respect to recent press reports regarding alleged illegal frontrunning of customer orders or other unscrupulous trading activities on the Chicago Mercantile Exchange (CME) (see Kristina Zurla, "CME to Make Sweeping Changes to Volatile Nasdaq Contract Aug. 1," Bridge News, July 13, 2000; Mary Haffenberg, Jamie LaReau, and Kristina Zurla, "CME Rumors Escalate of Nasdaq Front-Running Buzzer Scam," Bridge News, July 24, 2000; and Melissa Allison, "Allegations of Improprieties Could Hinder MERC’s Future," Chicago Tribune, July 26, 2000).

According to these press reports, traders at the CME Nasdaq 100 stock index futures pit may have illegally front-run customer orders by using a system of vibrating pagers in their pockets to alert them to large impending institutional buy or sell orders. According to these reports, this information would then allow the trader to enter the market ahead of the institutional order in order to profit from the inside information they had about the impending order. These same press reports suggest that inquiries may have begun into these frontrunning activities as well as other unspecified allegations of fraudulent or unscrupulous trading practices.

http://www.house.gov/commerce_democrats/press/106ltr140.htm

How many of you where aware of the Nasdaq 100 allegations? And as far as we know and others tell us, there was no disciplinary action. We’re told the broker at the center of the allegation retired with his $$.

Yet Easy Al, the Speculators’ Pal, consistently inveighs against regulating hedge funds and other instruments of speculation. Of course this allows Easy Al, with the assent of the BoJ and BoC, to control and manipulate financial markets. And they are the new economy. Al has little of no control over manufacturing or tech. But as long as the BoJ and BoC keep the dollar buoyant and long rates unwarrantedly low, Al is the major domo of US financial engineering.

Dr. Irwin Kellner, econ prof at Hofstra on CBSMarketWatch.com: "The annual rate of increase in the consumer price index since February works out to 5.5 percent -- the most for the CPI in any three-month period in 13 1/2 years. Which is to say, you have to go back to November 1990 before finding a bigger burst of inflation over a three-month period. One step back in the production and distribution process, the producer price index, tracking wholesale-level inflation, is also stirring. The 12-month rise in finished goods prices through May is the most for any such period since December 1990….Against this backdrop, you'd expect Greenspan -- being the consummate numbers man -- to pounce on this nascent uptrend and nip it in the bud. You'd be wrong. The bottom line: Raising rates sharply at this time could cause more problems than it solves by hurting households and bursting the housing bubble." http://cbs.marketwatch.com/news/story.asp?guid={E2F65345-DF22-49C4-A90E-A5CA2347B7D8}&siteid=mktw

-END-

And, more of the same:

June 23 (Bloomberg) -- The U.S. Securities and Exchange Commission is reviewing whether brokers who help set interest rates on $204 billion of corporate and municipal bonds misled investors and issuers.

The SEC's enforcement staff asked several brokers of so- called auction-rate bonds to provide ``a written report detailing any potentially deceptive, dishonest or unfair practices,'' according to a memo that the Bond Market Association, the Securities Industry Association, and the American Bar Association sent to their members. The memo, obtained by Bloomberg News, didn't specify what type of abuses or which firms the government is probing.

Investors in auction-rate debt buy a long-term security, such as a 30-year bond, and bid through brokers to set the coupon as frequently as weekly or monthly. The interest rate resets in a so-called Dutch auction, in which the lowest price becomes the level at which the entire offering is sold. The risk of manipulation in a Dutch auction is if bids aren't blind or if brokers and bidders enter into undisclosed arrangements.

-END-

From the Moscow Times:

Wednesday, June 23, 2004. Page 9.
Golden Opportunities for Investment
http://www.themoscowtimes.com/stories/2004/06/23/047.html

-END-

Derek VanArtsdalen from San Antonio:

Bill,
Unless our camp is woefully mistaken, this is more commentary by people who just don't get it...

I highlighted the particularly stupid statements in red with a few of my own comments in blue.

Unbelievable...
Derek

Reuters
Inflation fears overblown as Wall St stays calm
Wednesday June 23, 1:03 pm ET
By Nick Olivari

NEW YORK, June 23 (Reuters) - Inflation fears are rattling many investors, yet the smart money is already betting those concerns are overblown.

Though gold and the companies that mine it were in demand a year ago as the dollar fell, money managers now are avoiding those traditional hedges against higher prices, venturing that the Federal Reserve is going to stop inflation.

"Plainly, people believe the Fed will remain vigilant so the risk of runaway inflation is not great," said Lester Rich, managing director at Malvern, Pennsylvania-based StoneRidge Investment Partners, which oversees $650 million in assets.

So far this year spot gold bullion (XAU=) is off 5 percent, and the American Stock Exchange's Gold BUGS index is off 22.39 percent. By comparison, the Dow Jones Industrial average has barely moved in 2004, down just 0.5 percent.

That is hardly the relative performance expected if inflation fears are uppermost in investor psyches.

During the 12 years ended in 1982, when inflation was rampant and the Dow barely posted an annualized return of 2 percent, bullion returned 22 percent a year, according to BigTrends.com, a Kentucky-based research firm.

This time round, though, investors are not racing to buy the supposedly safe plays. Just one of the 15 members of the Gold BUGS index is up year to date: Agnico Eagle Mines Ltd., which has posted a 12 percent gain.

SHARP CONTRAST

In sharp contrast, Randgold Resources Ltd. has lost 36.6 percent this year; Harmony Gold Mining Co. is down 34.4 percent; and Kinross Gold Corp. has dropped 24.2 percent.

Both the BUGS and bullion fared far better in 2003. Then the index jumped 67 percent -- easily outpacing other major indexes, including the Dow, the S&P 500, Nasdaq and the Russell 2000 -- while the yellow metal itself gained 19.6 percent.

But much of those gains are attributed to weakness in the U.S. dollar, which made gold, denominated in greenbacks, cheaper to investors using other currencies.

"Appropriate Fed action will nip this inflation rise in the bud, in my view," said Richard Berner, chief U.S. economist at Morgan Stanley in a recent note. "Fed officials will likely confirm their resolve to maintain price stability both before and after the June 29-30 FOMC meeting." [Huh? Price stability? Like we've got with gasoline, milk, eggs, health insurance, medical costs and damned near everything else, for instance!!??]

Rising inflation is bad news for most financial assets because it erodes their future value in today's dollars. In theory that prompts investors to buy hard assets such as gold or, to prevent paying the carrying costs of holding the metal, to buy the companies that mine it.

Because the Fed raises interest rates to choke rising demand, the impetus for higher prices, inflation also indirectly impacts corporate profit growth.

But if the Fed is prepared to act quickly, it may not need to raise interest rates so much that it slows profit growth and makes stocks less attractive than other asset classes such as gold.

EARLY DAYS

To be sure, some analysts say the gold mining sector is lagging because it's just too early to be concerned about rising prices.

The consumer price index for May was up 0.6 percent, but the core CPI, without food and energy, rose 0.2 percent. U.S. May producer prices rose 0.8 percent, although the core number, without food and energy, rose 0.3 percent.

Other money managers argue that gold and the mining companies have simply lost their appeal as a store of wealth except in extreme circumstances such as war. [I guess the current multi-war environment doesn't qualify.]

"Gold is a placebo for people looking for something to do when they are envisioning tough times," [Is this chick on drugs or what? She's unable to envision tough times ahead?] said Cummins Catherwood, portfolio manager with Philadelphia-based Rutherford, Brown & Catherwood which oversees $750 million. "Rationale, fiduciary investors who have to keep a lid on volatility and have a long-term strategy do not buy gold." [I guess that makes the millions who ARE buying gold IR-rationale.]

Whatever the reason, the outlook for gold miners and the precious metal is not going to change without a catalyst other than inflation. [Is Nick referring to a kind of inflation that's somehow different from the soaring kind we've got now?]

All of which leaves gold stocks lacking what many expected to be their usual luster.

-END-

This Reuters article is textbook GATA commentary why The Gold Cartel has rigged the price for so many years. They have brainwashed the money managers mentioned above, as this is just what The Working Group On Financial Markets wants the investment world to think about gold. These money managers, and most others in the US financial arena, are clueless and I am sure have never heard of GATA thanks to our being blackballed by most all of the financial press in the United States.

Most money managers in the US know nothing about gold, nor do they really want to. We can appreciate that for sure as the GATA presentation to a group of big league Boston portfolio managers was cancelled tomorrow supposedly due to a lack of interest. Too bad for them and for me in this case. Cancelled my ticket to Boston the other day. Could have stayed over for a fun reunion. A fellow Café member sent me the following this morning:

"Members of the Boston Patriots from 1960-70 are holding a two-day reunion this weekend in Boston, according to the team's former PR director, Jack Nicholson. Nick Buoniconti and Gino Cappelletti are among those expected to attend and Nicholson is making a late push to contact any former Patriots who haven't received word of the festivities."

Nick and Gino are good guys. Since my playing days, I met Nick B in Miami. He went on to star for the Dolphins in 1969 and years thereafter.

The gold shares came back late to close a little above unchanged. The XAU gained .26 to 86.65 and the HUI closed at 188.71, up .17.

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

The lack of interest in the gold shares, the relatively low Comex gold open interest, the diminished Commercial short position, the pitiful Café Sentiment Indicator, and the strong technical base in gold below $400, etc., are a powerfully bullish technical combo. Throw in a firm physical gold market and it suggests we should blow through the psychologically important $400 mark in the days/weeks ahead.

GATA BE IN IT TO WIN IT!

MIDAS

Appendix

For the LATE EDITION!!!!!!!!:

Bill,
There was a massive withdrawal of gold from the COMEX warehouses today.

184,844 oz went out and 2,026 came in making a net withdrawl of 182,818 oz which is equivalent to 1,828 contracts.

The drawdown was 4.16% of the total stock!

Regards,

Tim Leleux (aka The Priest)
North Yorkshire, England

Chemical price-fixing probe - report

By CBS MarketWatch
Last Update: 2:03 AM ET June 22, 2004

SAN FRANCISCO (CBS.MW) - The federal government has launched a massive, worldwide investigation of price-fixing of half a dozen chemicals used in plastic, rubber and synthetics in manufacturing in the United States, Canada, Europe and Japan, according to a report published late Monday.

At least four grand juries in San Francisco are examining evidence produced by the investigation that began two years ago and has grown to rely heavily on amnesty grants for whistleblowers, the Wall Street Journal reported on its Web site.

Citing unnamed lawyers close to the case, the Journal said current markets being probed include urethane, a widely used plastic; and neoprene, a synthetic rubber. The investigation includes such major chemical industry players as Dow (DOW: news, chart, profile), DuPont (DD: news, chart, profile) and Bayer (BAY: news, chart, profile).

According to the Journal report, the investigation has resulted in a guilty plea UniRoyal and its parent, Crompton (CK: news, chart, profile), which agreed in April to pay a $50 million fine after admitting it conspired with others to artificially increase the prices of chemical used to maker rubber between 1995 to 2001.

The Journal said Crompton, which had been exposed by a competitor, in turn furnished U.S. and European investigators with information about price fixing in other areas.

According to the Journal, Crompton, Bayer, Dow and DuPont are cooperating in the investigation.

Civil suits alleging overcharges have been filed in federal courts in San Francisco, Pittsburgh, New York and Hartford, Conn., the Journal reported.

24.06.2004 10:22:07 Blast heard near Turkish hotel where Bush to stay-TV

ANKARA, June 24 (Reuters) - An explosion was heard near the
Hilton Hotel in the Turkish capital Ankara on Thursday, two days
before U.S. President George W. Bush is due to stay there, CNN
Turk reported.
There were no immediate further details.
((Ankara newsroom, +90 312 459 9012))

© Reuters 2004

Schickt den Goldpreis immerhin bis 398,--, da wird dann wohl heute nachmittag wieder geknüppelt............

24.06.2004 10:45:50 FOKUS 1-Blendgranate nahe Bushs Hotel in Ankara explodiert

Ankara, 24. Jun (Reuters) - In der Nähe des Hilton-Hotels in
Ankara, in dem US-Präsident George W. Bush in Kürze übernachten
sollte, ist am Donnerstag eine Blendgranate explodiert.
Es sei niemand verletzt worden, sagte ein Angestellter des
Hotels in der türkischen Hauptstadt. In dem Hotel sollte Bush
bei seinem Türkei-Besuch am Samstag übernachten. Der Sprengsatz
sei in einem Paket am Eingang zum Hotel-Parkplatz detoniert,
sagte ein Sanitäter.
Blendgranaten verursachen zwar großen Lärm, aber in der
Regel keine größeren Schäden. Weitere Einzelheiten waren
zunächst nicht klar. Als Reaktion auf die Nachricht gab der
Dollar zum Euro nach. Die Kurse der als sichere Anlage
geltenden Bundfutures legten zu.
seh/bob

© Reuters 2004

Hm,bislang keine Knüppelei!Gold bei 402 und Silber bei 6,19!

Nächste cabal-shortattacke vermute ich bei ca. 6,30!Let's see.....