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

Eric Hommelberg with some valuable input on the HUI and the gold shares:

Hi Bill,
The disconnection between the PM shares and Gold is reaching an extreme again just as it did in March 2003 and May 2004. The chart which visualizes this is the Gold/HUI ratio. During a Gold Bull market the PM shares tend to rise faster than bullion itself. While Gold rose 80% over the last three years the HUI rose more than 600%. There it is. HUI rises faster than Gold in a Gold bull market. Sometimes Gold outperforms the HUI and vice versa but overall the HUI rises faster than Gold itself. Sometimes the temporary undervaluation of the PM shares goes to such extremes that it provides a perfect BUY opportunity. These BUY opportunities occurred over the last three years when the RSI of the Gold/HUI ratio crossed the 70 mark. (see chart below).

[Blockierte Grafik: http://www.lemetropolecafe.com/img2004/Midas1206A.gif]

In March of 2003 when the HUI hit a low of 112, it rallied all the way up to its peak of 252 in December of that year , an increase of more than 100%. In May of this year the HUI bottomed at 163 and rallied all the way up to 240 by the end of September, an increase of more than 50%. Since beginning of October the PM shares are anticipating an inevitable correction pushing themselves into an extreme undervaluation compared to Gold (pushing the Gold/HUI RSI into overbought area. But what happens if Gold does not correct from here but marches further towards the $480 area ? Well, the PM shares will have to catch up. We saw that PM shares could easily appreciate 50-100% from previous RSI tops. That would translate into a HUI exceeding the 300 mark easily.
Best, Eric

The gold shares continue act horribly with the XAU losing 1.40 to 102.40 and the HUI dropping 2.67 to 224.62. The only positive for the HUI was it bounced off 220 by support, making a low of 220.90 early on.

Many of the gold shares are trading at 50% of what they were a year ago with gold $30 lower. What a marvelous time to be stepping up to the plate on some of the quality golds which have been beaten up for no reason other than technical considerations.

GATA BE IN IT TO WIN IT!

MIDAS

It is only a matter of time before Iraq is a front and center issue for US financial markets to deal with.

SUNDAY HERALD
December 5, 2004

US admits the war for ‘hearts and minds’ in Iraq is now lost

Pentagon report reveals catalogue of failure
By Neil Mackay, Investigations Editor

--------------------------------------------------------------------------------

THE Pentagon has admitted that the war on terror and the invasion and occupation of Iraq have increased support for al-Qaeda, made ordinary Muslims hate the US and caused a global backlash against America because of the "self-serving hypocrisy" of George W Bush’s administration over the Middle East.

The mea culpa is contained in a shockingly frank "strategic communications" report, written this autumn by the Defence Science Board for Pentagon supremo Donald Rumsfeld.

On "the war of ideas or the struggle for hearts and minds", the report says, "American efforts have not only failed, they may also have achieved the opposite of what they intended".

"American direct intervention in the Muslim world has paradoxically elevated the stature of, and support for, radical Islamists, while diminishing support for the United States to single digits in some Arab societies."

Referring to the repeated mantra from the White House that those who oppose the US in the Middle East "hate our freedoms", the report says: "Muslims do not ‘hate our freedoms’, but rather, they hate our policies. The overwhelming majority voice their objections to what they see as one-sided support in favour of Israel and against Palestinian rights, and the long-standing, even increasing support, for what Muslims collectively see as tyrannies, most notably Egypt, Saudi Arabia, Jordan, Pakistan and the Gulf states.

"Thus when American public diplomacy talks about bringing democracy to Islamic societies, this is seen as no more than self-serving hypocrisy. Moreover, saying that ‘freedom is the future of the Middle East’ is seen as patronising … in the eyes of Muslims, the American occupation of Afghanistan and Iraq has not led to democracy there, but only more chaos and suffering. US actions appear in contrast to be motivated by ulterior motives, and deliberately controlled in order to best serve American national interests at the expense of truly Muslim self-determination."

The way America has handled itself since September 11 has played straight into the hands of al-Qaeda, the report adds. "American actions have elevated the authority of the jihadi insurgents and tended to ratify their legitimacy among Muslims." The result is that al-Qaeda has gone from being a marginal movement to having support across the entire Muslim world.

"Muslims see Americans as strangely narcissistic," the report goes on, adding that to the Arab world the war is "no more than an extension of American domestic politics". The US has zero credibility among Muslims which means that "whatever Americans do and say only serves … the enemy".

The report says that the US is now engaged in a "global and generational struggle of ideas" which it is rapidly losing. In order to reverse the trend, the US must make "strategic communication" – which includes the dissemination of propaganda and the running of military psychological operations – an integral part of national security. The document says that "Presidential leadership" is needed in this "ideas war" and warns against "arrogance, opportunism and double standards".

"We face a war on terrorism," the report says, "intensified conflict with Islam, and insurgency in Iraq. Worldwide anger and discontent are directed at America’s tarnished credibility and ways the US pursues its goals. There is a consensus that America’s power to persuade is in a state of crisis." More than 90% of the populations of some Muslims countries, such as Saudi Arabia, are opposed to US policies.

"The war has increased mistrust of America in Europe," the report adds, "weakened support for the war on terrorism and undermined US credibility worldwide." This, in turn, poses an increased threat to US national security.

America’s "image problem", the report authors suggest, is "linked to perceptions of the US as arrogant, hypocritical and self-indulgent". The White House "has paid little attention" to the problems.

The report calls for a huge boost in spending on propaganda efforts as war policies "will not succeed unless they are communicated to global domestic audiences in ways that are credible".

American rhetoric which equates the war on terror as a cold-war-style battle against "totalitarian evil" is also slapped down by the report. Muslims see what is happening as a "history-shaking movement of Islamic restoration … a renewal of the Muslim world …(which) has taken form through many variant movements, both moderate and militant, with many millions of adherents – of which radical fighters are only a small part".

Rather than supporting tyranny, most Muslim want to overthrow tyrannical regimes like Saudi Arabia. "The US finds itself in the strategically awkward – and potentially dangerous – situation of being the long-standing prop and alliance partner of these authoritarian regimes. Without the US, these regimes could not survive," the report says.

"Thus the US has strongly taken sides in a desperate struggle … US policies and actions are increasingly seen by the overwhelming majority of Muslims as a threat to the survival of Islam itself … Americans have inserted themselves into this intra-Islamic struggle in ways that have made us an enemy to most Muslims.

"There is no yearning-to- be-liberated-by-the-US groundswell among Muslim societies … The perception of intimate US support of tyr-annies in the Muslim world is perhaps the critical vulnerability in American strategy. It strongly undercuts our message, while strongly promoting that of the enemy."

The report says that, in terms of the "information war", "at this moment it is the enemy that has the advantage". The US propaganda drive has to focus on "separating the vast majority of non-violent Muslims from the radical- militant Islamist-Jihadist".

According to the report, "the official take on the target audience [the Muslim world] has been gloriously simple" and divided the Middle East into "good" and "bad Muslims".

"Americans are convinced that the US is a benevolent ‘superpower’ that elevates values emphasising freedom … deep down we assume that everyone should naturally support our policies. Yet the world of Islam – by overwhelming majorities at this time – sees things differently. Muslims see American policies as inimical to their values, American rhetoric about freedom and democracy as hypocritical and American actions as deeply threatening.

"In two years the jihadi message – that strongly attacks American values – is being accepted by more moderate and non-violent Muslims. This in turn implies that negative opinion of the US has not yet bottomed out.

Equally important, the report says, is "to renew European attitudes towards America" which have also been severely damaged since September 11, 2001. As "al-Qaeda constantly outflanks the US in the war of information", American has to adopt more sophisticated propaganda techniques, such as targeting secularists in the Muslim world – including writers, artists and singers – and getting US private sector media and marketing professionals involved in disseminating messages to Muslims with a pro-US "brand".

The Pentagon report also calls for the establishment of a national security adviser for strategic communications, and a massive boost in funding for the "information war" to boost US government TV and radio stations broadcasting in the Middle East.

The importance of the need to quickly establish a propaganda advantage is underscored by a document attached to the Pentagon report from Paul Wolfowitz, the deputy defence secretary, dated May.

It says: "Our military expeditions to Afghanistan and Iraq are unlikely to be the last such excursion in the global war on terrorism."

Im Verlauf des gestrigen Handelstages wurde unsere Restposition bei 452 US$ pro Feinunze Gold ausgestoppt. Derzeit sind wir folglich neutral und beobachten den Markt. Nach wie vor ist der Kursverlauf des Euros gegen den Dollar der dominierende Faktor für die Bewegungen am Goldmarkt. Solange die Gemeinschaftswährung so freundlich über 1,33 tendiert, ist uns um die kurzfristige Performance des Goldes auch nicht bange. Wie wir aber bereits gestern an gleicher Stelle feststellten, rechnen wir eher mit einer Korrektur des Euros. Der Markt ist einseitig gegen den Dollar positioniert und viele Analysten rechnen mit einer Fortsetzung der Euro-Rallye. Folglich haben wir den Dollar auf dem aktuellen Preisniveau gekauft und platzieren unseren Stoppkurs bei 1,3850. Sollte sich dieses Szenario bewahrheiten, sind wir sehr gespannt auf die Reaktion des Goldpreises. Je nach dem Ausmaß der Dollarbewegung sollte sich das Gold gegen US$ abschwächen. Passiert dies nicht, und das Gold koppelt sich vom Dollargeschehen ab, wäre dies äußerst positiv zu werten. In jedem Fall kaufen wir uns unsere Position zurück, sobald der Unzenpreis das Niveau von 350 Euro (11.250 Euro pro Kilogramm) übersteigt.

Das Auftragsvolumen ist nach wie vor sehr bemerkenswert. Die Privatanleger orderten in einer Menge physisches Gold, wie wir es seit den Anschlägen am 11.September 2001 nicht mehr gesehen haben. Umsatzspitzenreiter waren dabei die Goldmünzen 1 Unze Krügerrand und Maple Leaf sowie Goldbarren ab einer Gewichtseinheit von 100 Gramm. Das Verhältnis der Kundenkäufe zu den Verkäufen erhöhte sich erneut auf acht zu eins.

Achten Sie auf den weiteren Kursverlauf der Goldminenaktien. Hier hat bereits seit mehreren Tagen eine Korrektur eingesetzt. Dies unterstützt unser Szenario einer Konsolidierung am Goldmarkt. Ebenfalls beachtenswert sind die Schwankungen des Ölpreises. Die Erholung, die Mitte November eingesetzt hat, erwies sich letztlich als technische Korrektur. Sollte die Marke von 40 US$ pro Barrel auf Basis der Tagesschlusskurse unterboten werden, hat der kurzfristige Abwärtstrend ein weiteres Potential von ca. 10% bis zur nächsten Unterstützungslinie bei 36 US$.
Berichten der New York Times zufolge soll im Zuge der Kabinettsumbildung könnte es zu einem Wechsel an der Spitze des Finanzministeriums kommen. Der derzeitige Amtsinhaber Snow hatte die Politik des starken Dollars nur verbal betrieben. So könnte seine Ablösung eine starke Bewegung pro Dollar auslösen.

Quelle: Pro Aurum Tageskommentar vom 7.12.

mein Kommentar: Das Bild verdichtet sich. Es sieht alles nach einer weiteren sehr positiven Entwicklung aus. Die physische Nachfrage steigt, was nur positiv für den weiteren Kursanstieg sein kann. Aus anderen Ländern (z.B. China) wird ähnliches berichtet.

Hallo, Silbertaler,

was den US-Finanzminister Snow (or US Secretary of Finance) betrifft,

wenn er geht, ist bis zur - durch den Senat bestätigten - Bestellung und der folgenden Amtseinführung eines neuen Finanzministers keiner am Steuerruder des Exchange Stabilization Funds - Goldpreis -Managing bekommt eine Pause (es sei denn George W. macht es selber) , da
die beiden die einzigen sind die den ESF steuern können.

Hatten wir schon einmal, beim Wechsel vom Vorgänger von Snow auf Snow.
Hat damals dem Goldpreis "ächt" gut getan.

GMY

Wenn ich die Skepsis der letzten Tage auf Gold-Eagle
und den HUI in Euros betrachte - in der nächsten Woche wird es wieder
Zeit zu positionieren (buying season)

GMY

mehr...

December 7 – Gold $451.50 down $2 – Silver $7.81 down 8 cents

Ross Norman And TheBullionDesk.Com Are The Turkeys

Last, but by no means least, courage-moral courage, the courage of one's convictions, the courage to see things through. The world is in a constant conspiracy against the brave. It's the age-old struggle-the roar of the crowd on one side and the voice of your conscience on the other...Douglas MacArthur

GO GATA!!!

What an aggravating day! Among other things, the gold market being leaned on is very tedious. The dollar fell .06 to 81.26. The pound rose .44 to 194.48. The euro gained .09 to 134.29.

Gold in euros sank once more – this time to 335.20.

The London AM Fix was $453.75 with physical gold demand in good shape around the world. However, The Gold Cartel is on their case to take gold down regardless of market factors. The good news is I don’t think it is going to work, just like it hasn’t worked for months. Gold is rinky-dinking around right above the psychologically important $450 level, yet is not taking it out to the downside, and it is diddling around here on very light volume. Often when a market flutters like this on the downside, it explodes to the upside if key support holds. Should know what’s up, or down, by tomorrow’s close.

The gold open interest rose 2117 contracts to 356,109. The silver open interest gained 271 contracts to 125,375.

Not much new for me to cover on gold and silver. Said all I have to offer on Sunday and Monday.

OK, some more focus on the World Gold Council’s ETF. What a bizarre outfit:

Hi Bill,
Further to your Midas comments tonight regarding GLD, I neglected to e-mail you last week on the following. Executives of GLD rang the ceremonial opening bell at the NYSE last week. I happened to catch Bob Pisani of CNBC doing the opening report from the floor, who said that he tried to get the GLD executives on camera for an interview but they refused, indicating that they were still under the SEC mandated "Quiet Period." Pisani stated that this was the first time he'd ever heard of such a thing, couldn't figure it out, and used words to the effect of it being very strange.
Jeff

Then Ross Norman at the bullion desk has the audacity to come out with one of the least professional commentaries imaginable, one which shows his prejudice and lack of journalistic integrity:

December 7, 2004 Editorial

Allegations about Gold ETF by James Turk - ill-founded

Suggestions by James Turk that the recently launched World Gold Council's new ETF appears to be double-counting bars is flawed. The number and chop form only part of the identification of a particular gold bar and needs to be read in conjunction with the mark denoting the year - it's like saying "there is only one December 7th" when of course there are many ...

Ironically Turk has garnered support from market conspiracy theorists at GATA who have rushed to his support. Perhaps more perplexing is why GATA - who have for long asserted that the gold price has been artificially suppressed - should actively undermine arguably the biggest single vehicle to bring about further gold price rallies - and that is new gold ETF.

TheBullionDesk.com has remained steadfastly neutral on the wider issues that GATA raises ; however we feel compelled to comment on the remarks by Mr Turk as they threaten to undermine possibly the most effective force for the democratization of the gold market, a cause supposedly espoused by GATA.

A case of shooting themselves in the foot perhaps or rather turkeys voting for Christmas !

-END-

Why the turkeys are Ross Norman and his colleagues at http://www.thebulliondesk.com:

*He refused to publish GATA’s press release.
*He refused to publish James Turk's commentary on the ETF.
*He took up GATA’s time in a phone call yesterday and didn’t bother to mention our points of contention.
*......"most effective force for the democratization of the gold market" You mean like the market is rigged and the ETF will help balance things out? If that is so, then why hasn’t he ever given GATA the time of day?
*He didn’t bother to address any of the critical audit points Chris Powell brought up in the GATA press release.
*He didn’t, or couldn’t, get any official WGC response to Turk’s commentary.
*And this is the real kicker...... James Turk contacted two vaulting experts about the duplicate bar issue. BOTH told him what Ross Norman is referring to about the different years is true – FOR SILVER, not gold! Perhaps there is a reasonable explanation. However, that should be disclosed before discrepancies like this even arise.

Yes Norman, YOU and your bulliondesk colleagues are the turkeys; turkeys that are pandering to the gold establishment at that!

Just in, GATA's Chris Powell sees it this way:
5:15p ET Tuesday, December 7, 2004

Dear Friend of GATA and Gold:

TheBullionDesk.com today posted an unsigned editorial defending the World Gold Council's exchange-traded bullion fund against criticism and questions from GATA and its consultant, James Turk, editor of the Freemarket Gold & Money Report and founder of GoldMoney.

The Bullion Desk's commentary, headlined "Allegations About Gold ETF by James Turk Unfounded," is as sweeping as it is brief and unsupported.

"Suggestions by James Turk that the World Gold Council's recently launched ETF appears to be double-counting bars are flawed," the Bullion Desk says. "The number and chop form only part of the identification of a particular gold bar and need to be read in conjunction with the mark denoting the year. It's like saying 'there is only one December 7' when of course there are many."

At this hour you can find the editorial on the Bullion Desk's home page here:

http://www.thebulliondesk.com/

But you won't find the authority for the editorial's assertion about the gold bars the fund says it owns. Is the Bullion Desk making this statement on its own authority, or at the behest of the fund's sponsor, the gold council? It's not clear.

And surely if there are gold bars with duplicate or similar registration numbers, the fund might know better than to list them as duplicates without explanation and assurance to investors that they are not.

Maybe there is a good explanation for the fund's listing seemingly duplicate bars. But from the start the need for explanations from the fund has has been the point of Turk's and GATA's criticism. This criticism goes far beyond the gold bar registration numbers.

The issue illuminated by the duplicate registration numbers is the issue of the security of the bullion fund's assets generally.

If the fund has incompletely reported the registration of its gold bars, it would be good to get clarification from the fund directly rather than to assume that the Bullion Desk speaks for the fund. (Of course as a matter of journalism, it would be good for the Bullion Desk to establish this as a matter of ordinary reporting before opining about it.) Then the fund and the Bullion Desk could address the other questions Turk and GATA have raised, questions the Bullion Desk and its editorial have failed even to acknowledge, much less provide answers to:

* Why have all the custodians and potential custodians of the fund's gold not been identified?

* Why is the fund refusing to let its gold holdings be fully and publicly audited?

* Is any of the fund's gold being leased, made available for leasing, or encumbered in any way?

* Exactly what is the fund's relationship with the Bank of England, a major lessor of gold?

Turk and GATA endorse the concept of an exchange-traded bullion fund. But since the suppression of the gold price and the manipulation of the gold market have been made possible by the mystery that has been carefully woven around gold possession and leasing, Turk and GATA would like to be sure that any bullion fund really has, secure in vaults, without encumbrances, the gold it claims to have.

Of course we have found that central banks deliberately confuse unencumbered gold in the vault with leased gold long dissolved in the market and unrecoverable by any practical means. We would like assurance that the bullion fund's accounting and security standards are better than those of a central bank.

When the exchange-traded fund reports gold bars with duplicate serial numbers (even if there really are separate bars somewhere), when the fund happily declares that it may not even know the identity of the custodians of its gold, when the fund has a relationship with the biggest and perhaps most nefarious gold-leasing and gold-selling financial institution in the world, and when the fund does not forswear leasing its gold and thereby assisting the suppression of the gold price, investors generally and gold's partisans particularly should be skeptical.

As for the Bullion Desk, it has done no more than sneer at questions it has not even yet dared to report.

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

The John Brimelow Report

India buying: Can NY shorts spell I-N-D-I-A?

Tuesday, December 07, 2004

Indian ex-duty premiums: AM $8.11, PM $7.72, with world gold at $452.65 and $453.55. High; very ample for legal imports. Reuters has a story today supporting the view that Indian demand remains strong, citing imports to the second import point Ahmedabad, which do seem high. See attachment.

In my deplorably late daily commentary yesterday I reviewed the evidence that short selling has become an important factor: subsequent price behaviour reinforces this view. Gold dropped $2 immediately after the NY close, before Japan’s 7PM NY open. (Funny time for a proceeds maximizing seller to sell) Then it rallied $2 to the NY open, before collapsing again.

Against Indian buying, this is not going to be an importantly profitable short. It could be disastrous.

JB

India Gold-Buying seen steady on strong rupee, weddings

By Hari Ramachandran

NEW DELHI, Dec 7 (Reuters) - Physical demand for gold in India, the world's largest buyer, is likely to be steady in the near term despite high global prices due to the wedding season and the firming of the rupee against the dollar, dealers said on Tuesday. They said gold prices, which have softened after scaling 16-year high levels last week, could ease further with a fall in crude oil prices and buyers in Europe wrapping up jewellery purchases for Christmas.

Domestic purchases could go up once prices stablise at slightly lower levels over the next two weeks, dealers said.

"Wedding season demand is steady and continuing but everyone is waiting for prices to soften around $440-445 an ounce to boost their stocks," said Girish Choksi, an importer from Ahmedabad, the main city in industrially-rich Gujarat state.

Indian imports are currently confined to meet immediate needs for jewellery but volumes would go up once global prices stabilise and dealers replenish stocks, he said.

Gold jewellery forms an important part of Hindu marriages, as parents gift their daughters the metal for financial security.

Gold slipped in Asia early on Tuesday with spot gold <XAU=> quoted at $452.20/452.70 per ounce versus $453.50/4.25 late in New York.

"Buyers are waiting on the sidelines for prices to come down. Right now, inventory is at zero levels," said Dinesh Bhat, a gold importer from Bombay, the country's commercial capital. Gold's three-year bull run gathered pace this year, mainly due to the weak dollar. Geopolitical tension such as violence in Iraq and rising crude oil prices, which have rekindled fears of inflation, also played an important role.

Gold hit its highest in more than 16 years last Thursday. The metal rose to a new high of $456.75 per ounce but has softened a bit since then.

Dealers said the appreciation of the rupee against the dollar had served as a cushion against the high gold prices, making imports still viable.

The Indian rupee was quoted at 43.67 per dollar on Tuesday, the highest in the last eight months. The rupee has gained about 4.5 percent in 2004 following strong trade and foreign inflows. "About $7 to 8 per ounce in gold prices is getting neutralised with the rupee revalued against the dollar," said Choksi.

He said gold demand was also steady because of a ready market for jewellery for weddings at this time of the year by non-resident Indians. Jewellery accounts for 85 percent of Indian gold demand. The wedding season will last until the end of February.

Choksi said daily gold imports in Ahmedabad were in the range of 400-500 kg and this could grow by about 20 percent if prices slipped to around $440 an ounce.

Indian gold prices follow global trends because the country imports on average more than a tonne of gold a day to meet nearly two-thirds of its annual gold needs of about 600 tonnes. ((Reporting by Hari Ramachandran, editing by Sugita Katyal; Reuters Messaging: hari.ramachandran.reuters.com@reuters.net; +91-11 5178-1017)) . .

CARTEL CAPITULATION WATCH

Players in the US stock market finally woke up. They are realizing the economic news in this country isn’t hardy at all, and that the Iraq War is going as badly as the critics said it would a couple of years ago. The DOW got clobbered late, falling 106 points to 10,440, while the DOG finally retreated, dropping 37 to 2114. One of the catalysts for the fall, according to traders, was the failure of the market to rally on another sharp drop in oil, which tanked $1.52 to $41.46. What a shellacking oil bulls are taking here.

The US economic news is abysmal everywhere you look.

08:30 Q3 Nonfarm productivity reported 1.8% vs. consensus 2%; Unit labor cost reported 1.8% vs. consensus 1.6%
Prior readings were 1.9% and 1.6%, respectively.
* * * * *

Redbook chain store sales index (0.8%) in Dec.-to-date vs. Nov.
Index deteriorated from last week's reading of (0.5%) and the +0.1% in the week prior to that.
* * * * *

Dec. 7 (Bloomberg) -- Colgate-Palmolive Co. will cut about 4,440 jobs, or 12 percent of its workforce, and close a third of its factories worldwide to reduce costs amid rising competition with Procter & Gamble Co. Shares of the company had their biggest gain in more than four years.

Colgate, the largest toothpaste maker, expects to take charges of about $45 million in the fourth quarter, the New York- based company said today. Colgate said it will meet analysts' estimates for fourth-quarter earnings, excluding the restructuring costs. –END-

10:00am 12/07/04

U.S. Nov. layoffs up 2.6% to 104,530: Challenger By Rex Nutting
WASHINGTON (CBS.MW) - U.S. corporations announced plans to eliminate 104,530 jobs in November, the third month in a row that planned layoffs exceeded 100,000, according to a tally kept by outplacement firm Challenger, Gray & Christmas. Announced jobs cuts increased 2.6 percent in November from October's 101,840, and were up 5.1 percent from November 2003's 99,452, the firm said Tuesday. It's the first time since early 2002 that layoffs were above 100,000 for three months in a row. The 12-month average of announced job cuts rose to 85,309 from 84,886 in October. –END-

06:55 Women's Wear Daily reports that luxury sales soaring, mass market struggling
WWD reports that there has been a great divide in holiday sales, with luxury stores such as SKS and NMG.A doing very well this Christmas, while mass market retailers such as WMT are caught between department stores offering aggressive price promotions on one end and dollar stores on the other end.
* * * * *

US food prices set for biggest rise since '90-USDA
Mon Dec 6, 2004 05:51 PM ET WASHINGTON, Dec 6 (Reuters) - U.S. food prices will rise by as much as 4 percent this year, the biggest increase in 14 years, due to more costly beef, milk and fresh vegetables, the U.S. Agriculture Department said on Monday.

"It looks like we're going to end up between 3.5 and 4 percent higher," Ephraim Leibtag, an economist with the USDA's Economic Research Service, said about food prices in 2004.

By comparison, food price inflation was 2.2 percent in 2003 and 1.8 percent in 2002.

-END-

15:00 Oct. Consumer Credit reported $7.7B to $2.1T vs. consensus $6B
Prior reading revised to $13.6B from $9.8B.
* * * * *

Chuck checked in last night:

I saw again that the put call ratio in both silver and gold remain very bullish in both the XAU and in the future options. This has not wavered for the longest time that I can remember. Also, the weak opening and closing of the shares are still holding. This again is the longest time they have done so that I can remember. I still believe this portends a very unusual move. At this point there still might be some tax loss selling in the juniors since most of them are down this year. This is what happened in 1974 for the stock market when it was making its bottom. Chuck

And then again this afternoon:

The miniscule put-call ratio on the stock market and the break by oil under the moving average obviously signals a new phase in the markets. My guess is that we we'll see a sharp break in stocks and perhaps, commodities here. Let's see if gold will start to outperform everything in a relative manner. Nothing would surprise me even though logic dictates that the markets should hold up until the end of the year.

Rhody with some more input on the lease rates:

Hi Bill:
Lease rates continue to rise for both gold and silver, particularly in the near terms. Gold's rates are still in backwardation and borrowing silver for one month is still cheaper than borrowing gold for one year, as silver's rates have risen to keep pace with gold's. I think the monetary interests or the CABAL or CARTEL of common interests, however you want to call them, are using lease metal to stem the rise and perhaps to initiate a liquidation in the paper gold market.
Regards, Rhody.
http://www.kitco.com/market/lfrate.html

Bill,
Tonight I received your request for contributions.
Since joining Lemetropole Cafe earlier this year,
A. I bought Gold and Silver coins that immediately lost value.
B. I bought Gold and Silver bullion bars that also lost value.
C. I bought Gold and Silver options that expired worthless.
I hold you personally responsible for:
A. Providing some of the best information available on the
behind the scenes manipulation of the precious metals market.
B. Recruiting , or providing a forum for, an extremely experienced and
knowledgeable group of individuals who share their insights.
C. Never letting your emotions and opinions cloud your intellectual,
cold-as-steel advice on the gold market. (Well... maybe...
Consequently, I have sent a large (for me) contribution to Gata via Chris.
Of course I have recovered my initial investment. And because most of us
agree on the fundamentals, investment timing has become the key to my success.

(Though, initially it was a rather costly investment lesson - maybe I should have read a book, or something!)

I look forward to the continued success of Gata and it's contributors - both intellectually and financially!

Keep up the good work, Tin Horn!
Chip
Los Gatos, California
PS. I may have spelled the above differently than Mahendra. (Smile.)

Hi Bill-
I think I missed something here regarding the above subject.

I understand what Mike Bolser frequently mentions regarding when it takes both the Treasury Secretary and the President to run the ESF. What I don't understand is, hasn't the current President already taken part in the gold scandal for the last four years minus the time period between the O'Neill departure and Snow taking office? And as such, how does the President, pardon the expression, get the soil off his hands?
Thanks,
Bernie

Hello Bernie,
Yes, exactly, but the way these bums work, the President would deny knowing what the Treasury Secretary was doing. While everyone would not that to be preposterous, no one could prove it to impeach him.
Best,
Bill

Sound analysis from the Lasco report:

Gold - The FEB GOLD fell 1.90 to end the session at 455.90 and above support levels at 454.89, 453.70 and 452.52. We do have some minor resistance at 456.20 and then not much until we reach 461.70.

I see absolutely nothing wrong with gold here. We are simply consolidating previous gains and I wouldn't dream of liquidating here. WE ARE GOING TO 475.00 AND MAYBE AS HIGH AS 525.00 ON THIS MOVE.

Silver - Likewise, MAR SILVER is consolidating previous gains. We fell 8.00 to end the day at 796.30. We have resistance at 797.25, 802.97, 803.50 and 810.38 while support can be found at 792.07 and 782.25. I would be a buyer at 782.25.

Gold Stocks - I am sitting tight with BVN, GG, GLG, HL, NEM and RGLD. No Juniors for me.

US$ - After the big fall on Friday we rallied .34 to end the session at 81.32 and I was not impressed. We have minor support at 81.27 while resistance is at 81.44, 81.60 and 81.75. I now suspect that 80.00 may not hold and we could fall to 77.00 before we see a significant rally.

Bonds - The MAR BOND rallied .12 to close at 111.16 and below the 111.22 resistance level that is key. Bonds should have topped today or will top tomorrow and I am looking for a move back below the neckline by the weekend.

I am short and will stay that way.

DJIA - The DEC DJIA fell 38 to close the day at 10543 and just above support at 10542. We have further support at 10515, 10509 and 10475. A close below 10509 would indicate a test of 10366 and would be bearish. Resistance is at 10568 and 10597.

I am short a small position from 10610 and will sell again with a close below 10475. I believe a top is forming here.

Cotton - I forgot to mention that I was stopped out last week at 43.20 in the MAR COTTON. I am obviously too early but will keep a close eye and wait for another signal.

ebo@lascoreport.com

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More and more savvy Café members believe the gold shares are abnormally suffering due to hanky-panky:

Good Evening Bill,
It was good to see Rick Ackermans piece about an explosive rally. Could definitely use some hope at this stage of a years worth of share bashing. My own piece in tonight's Midas about cartel intervention against the shares was a bit of a rant, lacking on fact, and filled with gut instinct feeling. But, through my life's eyes which have much experience monitoring powerful political men, I have come to understand their ego and how they exercise their power. I remain firm in my position that the cartel has a two prong attack. One against the bullion and one for the shares. It fits their M.O. Tom K's contribution about the Depository Trust Corporation creating counterfeit shares that can be borrowed by broker over and over again artificially inflating the share count and driving the stocks value down is incredible. It certainly explains the means for these hot shot boy wonders to trash shares through naked shorting. It is implausible that they are not doing every conceivable thing possible to accomplish their mission. There are many issues of impropriety, so it shouldn't take long to expose something significant. GATA should get a line in on this Dateline production and reveal the other fraud that regularly occurs with the bullion and leasing. This could get some real mileage, national coverage and the groundwork for some over do reform. Gonna watch this closely. All the best Bill. Thanks for being there in these trying times. It is greatly appreciated.
Rich

Hi Bill,
This on DTC from http://www.marketforum.com/?id=781355
(at the bottom of the page).
Where’s Spitzer on DTC?
Sincerely,
Dave.

" NBC's "Dateline" recently confirmed to FinancialWire that it is preparing a comprehensive expose of the "naked short selling" controversy.

The reportage is said to focus on allegations that "brokers, through their wholly owned clearing house system, the Depository Trust Corporation (DTCC), have effectively been creating counterfeit shares of stock through their 'Stock Borrow Program', which allows brokers to 'borrow' the same shares over and over again, artificially inflating the share count and driving the price of the stock down.

Stockgate, a growing global malady, is being contested on multiple levels, including judicial, legislative and political. "

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