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

On the lease rates:

Hi Bill:
There was a surge in silver lease rates of 20% in the near terms (from .20 to .25% in the near terms). Despite this, gold rates remain relatively high at only half of silver rates in the one and two month terms. Silver rates remain in incipient backwardation. Lease rates are still very low, as central banks attempt to encourage lease related selling but there are few takers, except those who wish to cap the price for monetary purposes and in silver, perhaps to use leased silver to satisfy delivery requirements on COMEX. With over 1000 contracts stopped, as much as 5 Moz is needed. I wish I could update this lease rate data more frequently, but Kitco source can go three or four days without updating their data.

Regards, Rhody.

The Wall Street crowd continues to serve me softballs to hit out of the park with their continuing, pathetic commentary on the gold market. Why are the gold shares doing so poorly? Here is one reason: Investors go to Citibank, Morgan Stanley and SocGen for advice like they do on GOOOOgle. This is another example of what the US investing public receives for feedback from a marcher in THE SENILE WALL STREET GOLD PARADE:

Gold to Average $410/oz This Year, $450 in 2005, SocGen Says

Nov. 30 (Bloomberg) -- Gold prices will average $410 an ounce this year, 13 percent higher than last year, and $450 in 2005, driven up by a weaker dollar, Societe Generale SA forecast.

A weakening dollar boosts the allure of dollar-denominated gold for investors looking to hedge against declines in U.S. assets and making gold cheaper to buy with other currencies. The metal has gained 12 percent over the past year as the euro has advanced 11 percent against the dollar.

``We expect the market to continue to be driven largely by non-physical investment demand, which may in turn continue to be dictated mainly by external factors, above all the direction of the U.S. dollar,'' the research unit of France's third-largest bank said in an e-mailed report.

The report also said silver will rise to average $6.70 an ounce this year, up from $4.89 in 2003, and $6.75 in 2005.

-END-

More DISINFORMATION. These people are an insult to real morons they are so inept!!!! The SocGen dunces ought to bring in John Brimelow as a consultant to prevent them from publishing this kind of garbage.

Some thoughts from Kangaroo country:

G'day Bill,
Yesterdays Market action was really odd.

Gold survived yet another "assignation job", to live another day. I do believe, however, that the "game" is not yet over.

The Markets are "running on empty", with only the Aussie one showing signs of life, but even that had a sell off yesterday and continues today.

The Gold price is now consolidating above US$450. The US$ Index is, however,
showing signs of real stress, and is trying to stay above the 80/81 level, trying to stay off an execution.

What I really astounding is that there is absolutely no sense of reality; what has value?

A couple of my Scots Mate who work in the Financial Markets are expecting a substantial rally in the US$ Index.

The US economy is riddled with credit and debt, and the longer this system tries to ward off real issues, the deeper it digs a hole for itself.

One must remember that China has mined Gold for at least 3,000 years, and currently produces the order of 3,000,000 million ounces per annum. They do not "export" Gold, so the simple question is - "Who has the Gold", and I would humbly suggest China!!!

In the recent Asean Conference in Chile, the Americans were reported to have
requested China to revalue their currency. The Chinese response was a polite but firm "No", and the Chinese were reported to have suggested that the Americans "sort out their mess".

The Americans do, however, continue to beieve that the world owes them a living?!

So where to from here?

Well, the article written by Ron Griess "Presenting a Positive Case for the Stock Market in 2005" at Goold Eagle:

http://www.gold-eagle.com/editorials_04/griess111004.html

And,

"Schwarzenegger Savages California, Aims at Presidency", at:

http://larouchepub.com/other/2004/3147arnie_for_pres.html

In 1980, when Reagan became President, and the Financial Markets were deregulated with the "Big Bang", this started 24 years of "you have never had it so good", the problem being that Credit and Debt were slowly but surely expanded, resulting the current mess.

Will 2005 to 2008, and beyond, be a mirror image of the Reagan years, with Schwarzenegger installed as President? Only time will tell.

This may be the shape of things to come. Where, but only in America, can "paper Dollars" be currency and an Austrian bid to become President???!!!

A sense of reality has surely become lost.

Yep, the "Loonies" are certainly running the Asylum. Talking about Loonies, I quote:

"I admired Hitler ... because he came from being a little man with almost no formal education, up to power. And I admire him for being such a good public speaker and for his way of getting to the people and so on...."—Arnold Schwarzenegger, in a 1977 interview with George Butler.

Perhaps Bill, you could compile all the GATA information, write a Screen Play, and get "old" Arnie to act in this movie, which would become a best seller, as it would have everything, including Arnie acting as "himself"!!!!

Hitler and Schwarzenegger do have one trait in common, they were/are both "Exterminators"; we certainly live in very strange times!!!???

Och aye,
Haggis

Turning to the San Fran gold show:

Bill,
I just left the IIC show in San Fran. I know these guys are your buds. (ha ha)

I took the opportunity to not only use our time there as a sponsor and speaker to educate Crowne Golds wares but also to try and educate the shareholders of the mines, and want to be mines, to STOP trading their dollars for shares of mine stocks, when the miners wont take the risk of holding some of their cash reserves in gold. Only fiat currencies are used for these mine company reserves. This does not support the gold industry nor does it support the shareholders and their hard earned investments.

I thought I would go "Murphy" on the management of Strat gold when they tried the bullcrap line on me that their investors did NOT want them to hold gold as a portion of their reserves. Huh? They were to ignorant to just say they did not know why they did not do this. I truly believe today’s gold miner is nothing more than a wall street paper whore who does not know how to mine for gold. They mine for paper in the form of debt instrument notes, notes with the faces of Presidents who would have shot the central bank establishment for treason against our once great land.

Shareholders should demand that the mines they are invested in hold gold instead of currencies no matter what currency. Shareholders should also demand that mines look seriously at using GOLD as a currency instead of politically issued fiat currency. This mentality of miners would be like an automakers executive management BOYCOTTING driving cars because the risk is to great for
After my speaking slot, many people visited our booth, looking to be proactive to diversify their money into Crowne Gold which can be used as money. The ignorance level of the American people is profound. The quote from Hitler stands true, "Leaders are fortunate the masses don’t think."

Keep up the good work. We will have our day to say I told you so. It will be gleefully enjoyable. Until then we must keep planting the seeds so we can sow the harvest.

Sean Trainor
Crowne Gold, the worlds
Easiest way to buy, sell,
store,and exchange gold and silver
http://www.crowne-gold.com
centcom@crowne-gold.com
0115076752730

Interesting input on ECU Silver:

Hi Bill:
I just checked ECU's short position as shown at stockwatch.com. Downloading all Venture Exchange companies' short position one gets 27 pages ordered by short position size. ECU is easy to find: it is on page 1 and is the 14th largest short position on the whole exchange. On October 15th, when ECU began its current private placement (PP) rounds, ECU had no shorts, zero, zip none. By the end of October the short position had gone to 227,500. By November 15th the short position had increased to 643,700, by far the largest short position for ECU since forever (2001).

Really looks stinky to me as it must have something to do with the Investment Bank (IB) arranging the PPs. I made an apology for the IB's the other day in a note to you but take it back. The three largest players in the stock have been TD Suckurities, Ntl. Bonk Fin. and WD LaLatimer. Often TD and NBF trade between themselves or cross with themselves. Refco came in this morning buying 60,000 right on the opening and pushing ECU to 34.5, mostly stopped by TD, if I recall correctly. At 11:51 Refco bought another 23,000 shares...from TD again and another 2,000 shares from...WD LaLatimer.

I do not pretend to know exactly what is going on, but it sure looks as though some IB's shorted the stock to squeeze ECU on its most recent attempt to deploy up to 12 million units. Selling shares into the market in order to participate in a private placement is one thing, but shorting them to record historical levels in order to squeeze a client (ECU) in need, certainly cannot be very kosher.

The flip side is when someone comes in to buy 200,000 shares at the market and catches the shorts off guard (the maximum offer on the books I have seen showing is 195,000 or so recently), the stock will catch fire.

Grrrrr.
All the best,
David.

My prediction is ECU Silver (34.5 cents Cdn) is a TEN BAGGER next year. That’s right. I predict it will up ten times by December 2005.

"Amazing disconnects"

Obviously, something out of the ordinary here. Shares vs. the metal and oil vs. gold. Still seeing a lot of put buying vs. calls on the option futures, especially in silver from Monday. It looks exponential. All of the short-term calls for a correction might prove to be the fuel here for it.

I don't know what it will take to get the shares moving, probably a move in gold vs. the stronger currencies. We've had perhaps three or four good closes in about a month and a half. Patience. Chuck

How about them gold shares! Yep, we live on a different planet. Gold and silver are in the process of one of the grandest moves in market history and:

*Long term gold bulls are mostly all short-term bearish. Had you asked them this weekend whether gold would continue to go a good deal higher or put in a substantial correction, 90% would have gone with the correction.

*Investors can’t wait to sell their gold and silver shares. Each day gold and silver go up they sell more not wanting to get caught in the INEVITABLE correction.

*There is almost no understanding in the gold world, much less the general public, of what this gold move is all about, aside from the fact gold is going up because the dollar is going down.

*Almost every firm on Wall Street has been neutral to bearish on gold for the entire $200 move up. They remain that way. UNBELIEVABLE how clueless, and or corrupt, the lot of them are.

Good grief, both the XAU and HUI closed lower with gold making 16-year highs. The XAU lost .04 to 106.71 and the HUI gave up .42 to 236.52. The nightmare continues. No way could I dream the shares acting this way with gold and silver taking off like they are.

Is there hanky-panky going on? Don’t know. Many Café members think so. A common feeling is The Gold Cartel is losing control of the physical market so they are sitting on the gold shares to dampen gold fever excitement. I am told that Goldman Sachs and Morgan Stanley have been dressing down the Canadian gold shares, selling a 100 lot here and there on the closes.

Whatever is going on it has given impetus to growing depression among the gold and silver shareholders. All day long I was asked why these shares are stinking up the place. My take:

*Most of the gold camp is calling for a correction. Share buyers are waiting until we get one to step up to the plate.

*Most on Wall Street are neutral to bearish on gold. Why buy the shares at all? Based on their analyses, the gold and silver shares are better shorts than buys.

*Constant dissemination of gold disinformation (which is usually negative) by the US financial press has cooled investor interest.

*A number of hedge funds are long bullion and short the shares.

*The crummy price action is sending investors away in droves. The thinking is if the shares won’t go up when the prices of gold and silver are taking off, what will the shares do when both precious metals go through a normal correction?

*Probably some shorting by The Gold Cartel camp to gain this achieved effect.

*Who wants to be in the gold shares and miss out on the big DOW and DOG moves?

You are not alone either:

Hi Bill,
Just a note to let you know that you are not alone in your bewilderment. As I write this at 1240 PM e.s.t. silver is screaming up $00.35 and gold is up $3.80. However, the shares have been flushed to the sewer. Insanity! Me thinks the cartel has locked down the tiny share market through their many mutual fund holdings as retaliation for bullion breaking free of their grasp. These are horrible humans obsessed with power and getting their way. As the metals continue their rise, it won't take long for the shares to explode as even the cartel's efforts and a media obsessed with positive wall street spin can't overpower greed when it enters what remains of a free market.

The elitists have deceived the dumbed down masses so far, but when they wake up from this delusion and pursue the purchase of mining shares, it will be a sight to behold... Speaking of delusion, just turned off CNBC after about three minutes, which is all I can take, and heard that the DOW is rejoicing the lower oil price (up 126). What crap! The DOW only hears the good news and has a remarkable ability to ignore things such as auto sales down more than 7%, dismal holiday retail figures, dollar decline, etc, etc. Don't worry, be happy continues as the wall street mantra. Having been badly wounded with the decline in GSS because of their past quarter's loss, I continue to be amazed at the extreme over value of GOOG, SIRI, TASR, etc. Pundits report upon the mining shares being over valued, gold is always ready to correct, but the wall street darlings continue to soar with P/E's in the stratosphere. No one remembers the tech wreck of the recent past. Shame on them. This one is so over due it promises to be astronomical! I won't despair because I know the PMs will not be ignored, in spite of wall streets efforts to deceive, and when the metals right this wrong, it will be profoundly rewarding. Glad I found GATA, and know the truth, which is the most priceless commodity of all. All the Best Ten Horns!
Rich

Don’t know when this extraordinary apathy towards the gold shares will end. What I do know is it will and the resulting move will be nothing less than sensational. Gold producers are raking in the dough and the need to find gold and silver in the ground in a grand way will spur the explorations to great heights.

GATA BE IN IT TO WIN IT!

MIDAS

Yesterday I cut off part of the stock commentary sent to us by Chris Harris because it was so long. Here is some follow up:

Bill,
DTC is the Depository Trust Corporation, the clearing house for all the equity trades of broker-dealers in the industry. These are the guys we all entrust with clearing our stock transactions and delivering real stock from the seller when we buy equities. What the article means is that you may get real stock for your purchases, or you may get a counterfeit manufactured by the DTC. Since all the transactions are all electronic you have no way of knowing which is true, and your broker or custodial agent ain't about to tell you.

This is like getting a receipt that physical gold is on deposit in your account when it is not. Imagine if the Comex could with impunity inflate their warehouse stocks by electronic entry (you don't think they would ever do anything like that, would they? I would be shocked... shocked!) Your custodian is supposed be holding gold bars in your name... instead they have a piece of paper which they say is a gold bar.

Well here we have stock certificates that aren't stock certificates. So while their members and their members elite customers can use this bogus DTC stock to force down the price of any equity without limit, never having to produce real stock or even buy in their failure to deliver, when your brokerage firm fails in a crisis, the stock you "own" may turn out not to even be real stock! Meanwhile the DTC executives make out for producing extra revenues... that is, the fees for creating bogus stock. Heads you lose, tails they win. That's trillions with a T. And by the way there is an industry proposal afoot to eliminate all delivery of physical stock certificates to customers.
Here's there own self-description from their website:

http://www.dtcc.com/AboutUs/affiliates.htm

http://www.dtc.org

The Depository Trust Company (DTC) is a member of the U.S. Federal Reserve System, a limited-purpose trust company under New York State banking law and a registered clearing agency with the Securities and Exchange Commission. The depository brings efficiency to the securities industry by retaining custody of some 2 million securities issues, effectively "dematerializing" most of them so that they exist only as electronic files rather than as countless pieces of paper. The depository also provides the services necessary for the maintenance of the securities it has in custody.

National Securities Clearing Corporation (NSCC) is the oldest and, in terms of the transaction volumes it processes, by far the largest of the clearing corporations. NSCC provides clearing and settlement, risk management, central counterparty services and a guarantee of completion for trades involving equities, corporate and municipal debt, money market instruments, American depositary receipts, exchange-traded funds, unit investment trusts, mutual funds, insurance products and other securities. NSCC also nets trades and payments among its participants, reducing the volume and securities and payment that need to be exchanged by an average of 97% each day. NSCC generally clears and settles trades on a T+3 basis.

By the way Bill, check out the DTC Board. Talk about rounding up the usual suspects.

Bradley Abelow, Managing Director, Goldman Sachs (GS); Jonathan E. Beyman, Chief Information Officer, Lehman Brothers (LEH); Frank J. Bisignano, Chief Administrative Officer and Senior Executive Vice President, Citigroup / Solomon Smith Barney's Corporate Investment Bank (C); Michael C. Bodson, Managing Director, Morgan Stanley (MWD); Gary Bullock, Global Head of Logistics, Infrastructure, UBS Investment Bank (UBS); Stephen P. Casper, Managing Director and Chief Operating Officer, Fischer Francis Trees & Watts, Inc.; Jill M. Considine,Chairman, President & Chief Executive Officer, The Depository Trust & Clearing Corporation (DTCC);

Also, Paul F. Costello, President, Business Services Group, Wachovia Securities (WB); John W. Cummings, Senior Vice President & Head of Global Technology & Services, Merrill Lynch & Co. (MER); Donald F. Donahue, Chief
Operating Officer, The Depository Trust & Clearing Corporation (DTCC); Norman Eaker, General Partner, Edward Jones; George Hrabovsky, President, Alliance Global Investors Service; Catherine R. Kinney, President and Co-Chief Operating Officer, New York Stock Exchange; Thomas J. McCrossan, Executive Vice President, State Street Corporation (STT); Eileen K. Murray, Managing Director, Credit Suisse First Boston (CSR); James P. Palermo, Vice Chairman, Mellon Financial Corporation (MEL); Thomas J. Perna, Senior Executive Vice President, Financial Companies Services Sector of The Bank of New York (BNY); Ronald Purpora, Chief Executive Officer, Garban LLC; Douglas Shulman, President, Regulatory Services and Operations, NASD; and Thompson M. Swayne, Executive Vice President, JPMorgan Chase (JPM).

Regards,
Çhris

link to analysis of SEC proposal to outlaw ownership of physical stock certificates
http://www.investigatethesec.com/FW9.html

Genau!

Arnold Schwarzenegger als nächster Präsident der USA. Das wird uns wohl ins Haus stehen. Da bin ich fast sicher.

Gruß
mvd

ein Schauspieler als Präsident?
Wer kann sich das schon vorstellen?

Zitat

Original von midas
at ageka

Merci, entscheidest Du nach Deinen Charts?

Gruss midas, z.Z. Brüssel

Da ich glaube das dies ein bullmarket ist verkaufe ich ein drittel wie
Jim Sinclair vorschlagt wann die charts mir das sagen
(ist mir bisher gut gelungen)
Aber bisher habe ich immer zu schnell zuruckgekauft

Zitat

Original von mvd
Genau!

Arnold Schwarzenegger als nächster Präsident der USA. Das wird uns wohl ins Haus stehen. Da bin ich fast sicher.

Gruß
mvd

Soviel ich weiß, ist das aber nicht möglich, weil Arnie doch gar kein Ami ist, oder?
Aber möglicherweise wird dann die Verfassung geändert, wenn's den Herren hinter den Kulissen in den Kram passt.
Ein Österreicher an der Macht - wow, das hatten wir im alten Europa schon mal.

Grüße

extrel

# option63,

hatten wir doch schon einaml denke doch an Roland Regan!!

gruß hpoth

hpoth,
das war Ironie.
(Hab auch schon einen seiner schlechten Western gesehen)

#Hallo option 63,

habe ich auch so verstanden,seine schlechte Western habe ich auch gesehen.Aber erst der Rambo Scharzenegger der ist ja noch schlimmer.

gruß hpoth

Trichet sieht Inflationsrisiken und betont Wachsamkeit der EZB
Donnerstag 2 Dezember, 2004 15:09 CET

Frankfurt (Reuters) - Die Europäische Zentralbank (EZB) hat zwar noch immer keinen grundlegenden Inflationsdruck in der Euro-Zone ausgemacht, bleibt aber höchst wachsam über Gefahren für die Preisstabilität.

Kurzfristig sei die Aussicht für die Preisstabilität bedenklich, sagte EZB-Präsident Jean-Claude Trichet am Donnerstag vor der Presse in Frankfurt. Die Ölpreise ließen die Jahresteuerung noch eine Weile über zwei Prozent verharren, im Lauf des nächsten Jahres sei aber ein Rückgang unter diese Schwelle zu erwarten. Dennoch werde die EZB die Risiken für die Preisstabilität weiter wachsam beobachten. Trichet wies zudem auf die Abschwächung des Wachstums im zweiten Halbjahr hin, gab sich aber zuversichtlich, dass die schrittweise Konjunkturerholung anhalten werde.

Die EZB ließ den Leitzins in der Euro-Zone wie erwartet angesichts wachsender Unsicherheit über die Konjunkturaussichten und des begrenzten Preisauftriebs erneut unverändert bei 2,00 Prozent. Die meisten Volkswirte rechnen frühestens im zweiten Halbjahr 2005 mit einer ersten Zinserhöhung. Noch vor einem Monat hatten viele auf das erste Halbjahr getippt. Seither sind jedoch einige Konjunkturdaten schwach ausgefallen, und der erneute starke Anstieg des Euro auf Rekordkurse über 1,33 Dollar könnte die Exportwirtschaft belasten. Auch der hohe Ölpreis bremst die Wirtschaft, auch wenn er sich gegenüber seinem Rekordhoch inzwischen um rund zehn auf 41 Dollar je Barrel verbilligt hat. Im dritten Quartal war die Wirtschaft im Euro-Raum nur noch um 0,3 Prozent gewachsen nach 0,7 und 0,5 Prozent in den beiden Vorquartalen.

http://www.reuters.de/newsPack…oryID=631759&section=news

A Shock
Richard Russell snippet
Dow Theory Letters
December 2, 2004

Extracted from the December 1st, 2004 edition of Richard's Remarks

Martin Wolf in today's Financial Times heads his always brilliant column, "Why America is Switching to a Weak Dollar Policy." Sub-title -- "The present path is unsustainable, since both the current account deficit and external liabilities are on an explosive upwards trajectory." And I quote from Wolf's column, "How far might the dollar fall? By as much as 50% from its peak, in trade-weighted nominal terms, suggest two distinguished international economists, Maurice Obstfeld of Cal Berkeley and Kenneth Rogoff of Harvard. Up to now, the fall has just been 17% on a broad trade-weighted basis. More, it seems, is on the way."

The Wolf column ends, "To bring about a substantial reduction in the external debt without a deep recession, the US needs a huge change in internal relative prices. If the financing of the deficit is indeed in doubt, a weak dollar is a certainty. Hard currency enthusiasts may want the US to choose a depression instead, or hope the deficit can grow without limit. Neither position is sensible. Big adjustments in the dollar's real value are a certainty. The only questions are when how, and how much."

Russell Comment -- Above is the hard-core, totally realistic view of the situation. Either the US takes a severe recession (which will result in a major reduction in spending) or the dollar must take the fall. At this point, it appears almost certain, to me, that the Fed and the Administration are willing to let the dollar take the fall. This will mean ultimately higher interest rates, and then the question is whether higher rates will bring on a recession anyway. In the meantime, US consumers continue to spend while their saving rate drops to almost zero. It's a barrel of fun while it lasts!

What does it mean for you and me when the dollar falls on a trend basis? It means that on an international or global basis, you and I are getting poorer. You don't believe it? Take a trip overseas and see what your dollars buy today, compared with what they bought a year or so ago.

What about stocks? Right now stocks are considered assets -- and the market is saying, "Buy anything, buy gold, buy silver, buy a house, buy stocks, buy diamonds, buy a Picasso -- buy any damn thing but get out of dollars!"

But what about declining stock profits? The hell with that -- just get out of dollars, and stocks are assets.

Amazing. It's come almost as a shock. "What, the Fed and the Administration are giving their blessing to a collapse in the dollar's international value! How can they do that? How could it happen? And me, sitting here with cash. Quick, tell me where to spend it. What should I buy?"

It's as if suddenly, the unconscious of investors and the markets recognize what I've said above. Now there's a panic for non-dollar assets. When you get this kind of situation, and they're rare, emotions take over and technical analysis or any other kind of serious analysis becomes almost useless. This market has turned very emotional, and emotional markets are the most treacherous. They can turn on a dime, or they can keep going. They "force you," they "beckon to you" to run with the crowd. That's what we've got now. Enjoy it or avoid it. It's here.

Gold/Silver -- The chart below shows the ratio of silver to gold. When the ratio rises, it means that silver is outperforming gold. Some pros play this ratio. They'd now be buying silver futures and shorting gold futures. I don't play this game -- too tough. Since June 3, 2004, silver has been outperforming gold. On one level, this is an indication of rising speculation in the metals. Silver is often referred to as "the poor man's gold."

One difference is that the US government's stock of silver is gone. Silver, unlike gold, is actually used up in manufacturing. There's now a net shortage of silver. On the other hand, in a bear market silver can be viewed as an industrial metal, which is never the case with gold.

Personally I like both metals and I like platinum and uranium.

But you can't be everywhere, so I still go to gold.
more follows for subscribers . . .

Richard Russell
Dow Theory Letters
© Copyright 2004 Dow Theory Letters, Inc.

December 2 – Gold $449.90 down $3.50 – Silver $7.90 down 11 cents

Five O'clock Charlie

It does not require a majority to prevail, but rather an irate, tireless minority keen to set brush fires in people's minds." - Samuel Adams

Too good to be true. That’s what I thought to myself last night as gold took out $456 to the upside. Excitement was starting to build and that is a no-no as far as the heinous Gold Cartel is concerned. It didn’t take long for that concern to be reflected in the gold price.

What gets me is how obvious this charade of a free market is and none of the dolts who report on the gold market ever discuss the reality about what keeps happening. The modus operandi of the gold terrorists is plain as day. Once again the bums attacked after the PM Fix, after the physical buyers around the world had priced their orders.

AM: $454.35
PM: $454.20

You would think someone in the mainstream gold world would notice this frequent and consistent pattern. Nope, not a chance. Either that, or they have been told to keep quiet. Another example of our wonderful free press in the West.

What a tale of two worlds we have here. I’m referring to the gold share market versus the physical market. You would think gold just took out $400 on the downside by watching the share action. Depression and disbelief is everywhere. How can it not be? Yet, what can anyone expect? Almost every pundit out there is calling for a correction. No way the gold shares can go up with long-term gold bull commentators mostly short-term bearish and with the general public clueless thanks to the analysis coming from the gold bullion dealer pros on Wall Street. They are not only short-term bearish, but neutral to bearish for all of next year.

Meanwhile, the cash market is on fire (see JB again). AND a quick perusal of the gold chart reveals a market going straight up without any serious correction as of yet. All dips have been brief and shallow. Those who are long gold futures and gold coins have been cleaning up for months, with long positions established months ago not close to being threatened.

What does all this mean? Very little as far as the big picture is concerned. Mob psychology can do strange things to markets. Think back to the late 1990’s when the DOG made like the Energizer Bunny and kept going and going and going – finally taking out 5,000. For months and months my colleagues and I muttered to each other that it made no sense. It didn’t of course and the DOG collapsed to 1300 and change.

This is what we have going on with the gold and silver shares. This lousy action is completely irrational, yet there it is. Bottom line: patience is called for. Fortunes will be made next year.

Take the emotion out that we are talking about gold. Look at their chart which screams BULLISH. The weeklies and monthly charts are even more bullish looking.

December gold
http://futures.tradingcharts.com/chart/GD/C4

Yet, the HUI chart is horrendous. This dichotomy can’t go on too much longer.

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

The Gold Cartel was huffing and puffing in an all out effort to break the back of the gold bull market. By day’s end they stared at another defeat. Gold roared back after a $7 shellacking mid-session, closing well off its lows and averting an outside key reversal to the downside.

Yesterday’s gold open interest rose 9565 contracts to 355,211. The cabal forces were aggressive sellers in preparation for today’s planned mugging.

Tomorrow’s early action will be dictated by the US employment report. The feeling is mixed as to what is coming. Some indicators show robust activity in the jobs sector, yet others, like today’s jobless claims, reveal a weakening picture.

Silver held up very well after yesterday’s surge. Talk about a bullish chart pattern:

December silver
http://futures.tradingcharts.com/chart/SV/C4

The silver open interest rose sharply on the advance, rising 6626 contracts to 123,584. A large open interest increase on heavy volume, with the price rising sharply, is a technicians dream for the bulls.

The story on silver in the real world from a fellow Café member:

Hello Bill.
I am a subscriber of your site since 2002 and I live in Guadalajara city, Mexico’s 2nd largest.

You might be interested to know that this is the 3rd week in a row that my precious metals wholesale provider, ‘Silver and Gold’, _the biggest in town’, has asked me, his client, to lend him silver bullion I’ve bought from him before (250 kilos), because so far, Peñoles, the world’s biggest silver producer, hasn’t delivered silver to the local market. My provider tells me that the shortage is national, not local.

Three weeks ago I agreed to lent him my silver for just one week, so he could face local demand and we are now in the third week and him still unable to give me back my silver.

Something big must be going on here Bill.
Gabriel

***

John Brimelow Report

Splattered by Oil: rescued by India?

Thursday, December 02, 2004

Indian ex-duty premiums: AM $6.81, PM $10.52, with world gold at $456.05 and $454.60. Adequate, and massively excessive, for legal imports. Ignoring the rally in the $US which began in the early Indian afternoon, the rupee surged to close at import-facilitating 7 month high of R44.05 = $1 despite intervention by the Reserve Bank. Besides the usual reasons (the Bombay Stock Exchange closed at an all time high today), India is a huge beneficiary of lower oil prices. Contrary to popular impressions, nowadays the immediate effect of lower oil is to help world gold by tending to improve the ability of the largest buyer of physical to bid in the world market.

This morning’s world gold price was the highest since gold imports into India were liberalized. Ex-duty premiums of over $10 are extremely unusual. They were last seen a few times in late April and early May as gold completed its $50+ drop from the March 31 high.

In other words, just like 6 months ago, extremely aggressive Indian buying is to be expected. Without the huge declines in Oil and other commodities today, gold would probably not have closed down. Quite apart from influencing the conventionally- minded US trader, falls like these (oil yesterday experienced the 6th largest drop since the Comex contract started) must have triggered margin calls of considerable size. Some point to the (quite modest) rally in the dollar as being important: but within the US speculative community, these commodity price moves probably had more effect.

Early in the day, of course, the dollar was making new lows and gold held 16 ½ year high ground above $456 for several hours. TOCOM was very mildly impressed: even though the yen made a yen-gold unfriendly 4 ½ year high, open interest rose the equivalent of 534 Comex lots on volume 27% higher, equal to 18,658 Comex. The active contract closed up 5 yen and world gold went out $2.50 above the NY close, at $456.10. It looks increasingly that the public in Japan is not in fact inclined to liquidate. (Yesterday NY traded 59,141 lots; open interest rose a steep 9,565 contracts – 29.8 tonnes – to 355,211 lots. The ETF was once again static.)

The size of the open increase yesterday suggests that either the breakdown effort involved a lot of shorting, or, perhaps more likely, that the traditional heavy seller was again defending $455.

It is possible that the large gold derivatives position (including futures) will now go into a liquidation phase, as in this past April. Some presume this will be the dominant force in world gold. This is a mistake. The physical market checked the decline this Spring far sooner than most expected. It is now postured as it was at the bottom of that slide.

As a source of amusement to gold’s friends, news broke today of a $500 Mm+ derivatives disaster involving a Chinese oil trader. Some say that the problem is far larger, and that it influenced oil’s surge this Fall. As I said in my essay on Nicholas Dunbar’s LTCM book, one can only wonder about the wisdom of allowing these financial nuclear weapons into the hands of children. See

http://www.vdare.com/jb/WallStChangingCulture.htm

JB

An explanation of the Indian premiums by John for Café newcomers:
http://www.lemetropolecafe.com/img2004/IndianPremiums.htm.

CARTEL CAPITULATION WATCH

The DOW lost 5 to 10,585 and the DOG gained 5 to 2143.

The 30-year DEC T Bond broke down further, losing 12/32 to 110 19/32.

Oil was clocked again, falling another $2.24 per barrel to $43.25.

The dollar only rose .39 to 81.95, while the euro sank .52 to 132.69. Gold in euros continues to fade, dropping to 338.50.

US economic numbers:

08:30 Jobless claims for w/e 11/27 reported 349K vs. consensus 330K
Prior week revised to 324K from 323K.
* * * *

10:00 Oct. Factory Orders reported 0.5% vs. consensus 0.2%
Prior reading revised to 0.0% from (0.4%).
* * * * *

09:17 Same-store sales
Of the 49 companies on our page that have reported, only 15 beat consensus, while 32 missed and 2 were in line. The October tally was 30-20-2.
Reference Link
* * * * *