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

January 3 – Gold $428.60 down $9.20 – Silver $6.47 down 32 cents

Gold Cartel Proves GATA Right Yet Again

The future belongs to those who believe in the beauty of their dreams..Eleanor Roosevelt

GO GATA!!!

It doesn’t take an Einstein to notice the blatant and extraordinarily aggressive manipulation of the gold price over the past month. It all started with the $20 drop following the mysterious disappearance of 15+ tonnes of bullion from the World Gold Council’s GLD in early December. That was followed up last week with an $11 drop. Last night with most of Asia closed and London/Canada closed today, gold was bombed once again as the dollar staged a modest rally. Meanwhile, as John Brimelow reported this morning, the cash market is on fire in India and the Mid East, breaking all kinds of records in Turkey. "So what?" The Gold Cartel roars and does whatever it wants in the short-term, taking gold down nearly $11 again at one point today.

What could not be clearer is The Gold Cartel and powers in the US Government want the price of gold DOWN as we head into the Iraq elections and as foreigners debate what they are going to do about investing in the US in 2005 due to the disappearing dollar. The aggressiveness of the selling by The Gold Cartel during a quiet holiday period seems designed to send some sort of message that the US is in control here, regardless of the dollar fundamentals, which continue to deteriorate.

If we review all the other markets over the past few weeks, only GOLD has moved sharply in one direction. The rest of the markets have barely budged during the holiday market conditions. Case closed when it comes to the gold price-fixing issue. So much for gold trading in lock step against a weak dollar. So much for free markets in the US. So much for even trying to hide the manipulation anymore.

And let’s hear it for the pathetic leadership in the gold industry which will cower to The Gold Cartel, as always, in response to the obvious white-collar mugging of the gold price. The Gold Cartel just laughs at them, knowing no matter how glaring the manipulation is, these lightweight bunch of powderpuffs won’t say or do anything. Pile a bought financial market press on top of that and you can see why the arrogant cabal forces get away with their reign of terror – and steal your hard earned money in the process.

Talk about cheap shots. The Gold Cartel has made their move to flush out the specs when most of the world markets are closed and many investors still on holiday. All kinds of stops were touched off today when told took out $432 and then psychologically important $430. While it was a winning tactic, it also reveals The Gold Cartel isn’t that strong and must attack like a jackal does against a wounded animal.

So much for gold being weak the past couple of weeks because of The Gold Cartel squaring up their books for year-end. That might have been a reason, but not THE reason. This is a cabal raid on gold orchestrated by the US Government, conducted in fear of a complete dollar collapse and to disguise the true inflation picture in America.

Keeping the focus on the right ball: which is to view how dramatically different the euro, yen and bond charts are from the gold chart. For the reasons oft-expressed in this column the past month, The Gold Cartel has divorced the gold price from that of the euro, yen, dollar, and interest rate developments:

March euro - sideways
http://futures.tradingcharts.com/chart/EC/35

March yen - sideways
http://futures.tradingcharts.com/chart/JY/35

Ten Year Treasury Note -sideways
http://futures.tradingcharts.com/chart/NO/35

February gold – slaughtered by the crooks during a seasonally strong period of demand
http://futures.tradingcharts.com/chart/GD/25

The irony is, just as gold has fallen apart versus the euro the past month, it will significantly advance against the euro as the year wears on (IMO). This recent blatant attack by the cabal smacks of desperation. They are using every trick in their playbook to turn the specs into sellers before gold takes off again due to surging cash demand (see JB below). The aggressiveness of their maneuvers suggests this may be a last stand charge because they know they don’t have enough available physical gold to keep this up too much longer. When the specs sell, it has the effect of adding temporary supply to the market and allows the bums to cover some of their shorts put on at much higher levels.

Why the urgency to bury gold now? Besides the all-important, and potentially disastrous (for US prestige) Iraqi elections which loom on the horizon, The Gold Cartel has to deal with the real probability central banks are gradually changing their attitude towards holding gold. As oft-stated in MIDAS, the German decision to hold back on their gold sales was a monumental one. Based on the work of the GATA camp over the past many years, The Gold Cartel is now faced with fighting a war without enough ammunition to load into their guns. They have deceived the investment world for too long by swapping/lending too much gold in surreptitious fashion. As a result, they are gradually hitting the wall as far as the "gold hit squad" is concerned. Physical demand around the world is gradually eating their lunch.

It is not only the Germans who may be running for the hills. To give you some idea how stunning the change re gold in the central banking world probably is, we only need to review a October 13, 2001 piece at the Matisse Table and focus on the work of GATA’s Andrew Hepburn in:

The Bank of Italy Confirms Gold Cartel, IMF Gold Deception

Which can be read in full at:

http://www.lemetropolecafe.com/pfv.cfm?pfvID=1765

What becomes significant is that Andrew reveals the Bank of Italy was active in the gold swaps/lending market. After all, someone had to supply some of the 13,000 tonnes not accounted for in the official central bank statistics:

"S034162M – CENTRAL BANK: ASSETS – GOLD AND GOLD RECEIVABLES

Comprises the gold owned by the Bank of Italy and receivables in respect of deposits denominated in gold and swaps."

The above essentially confirms that the Bank of Italy is active in the swaps/deposit market. The next excerpt of note is found on page 48 of the report. They state that:

"In October 1999, as part of the harmonization of the Eurosystem statistics, the accounting treatment of the Bank of Italy's official swaps (in gold and dollars) with the EMI between September 1997 and June 1998 and with the ECB from July to December 1998 was modified. The main change was the switch from stating gold assets net of official swaps to stating them gross of such transactions."

A few things are of interest here. First, they admit to doing gold swaps. Second and much more importantly in October, 1999 the ECB adopted the collateralized loan approach to accounting for gold swaps. This is the same treatment that the IMF denied it ever recommended but we know to be the case. Under this treatment swapped gold remains as a reserve asset even though the ownership has changed and the gold has left the vault. Furthermore, this accounting change went into effect around the time of the Washington Agreement. If I remember correctly, the WA only curtailed sales and lending; it said nothing about swaps. Because of the new treatment it is very possible that gold swaps have increased significantly since late 1999.

The term "official swaps" is in reference to swaps with the EMI and ECB. I'm unsure as to the level of swaps with the EMI but I believe around 15% of the ECB's reserves are in gold which means that Italy transferred at least 450 tonnes in that swap arrangement.

On page 51 in the "Methodological Index", the following is said when explaining an account code: …

-END-

What is important to take out from the above:

*Following the violent gold price explosion subsequent to the Washington Agreement, The Gold Cartel and allies felt compelled to change the way they were doing business.

*The IMF instructed its member central banks to DECEIVE the public about the true status of their gold reserves.

*A portion of Italy’s sizeable gold reserves has been lent/swapped and is no longer in the vaults of their central bank.

None of us are privy to what is going on behind the scenes in the central banking world, however, word is the Italians aren’t going to sell any gold, following the Germans lead. Now take it a step further. What if they want some of their lent gold back? It is important to keep in mind the annual supply/demand deficit is running around 1500+ tonnes. The market can’t handle the Italians calling some of their gold in, or any other major central bank for that matter. This new concern must have the Fed and Gold Cartel petrified, which is reflected in the gold price action of late.

The aggressive nature of the assault on gold appears to be an effort by the US to discredit gold’s refurbished credibility as a reserve central bank asset. PRICE ACTION MAKES MARKET COMMENTARY and influences the sheeples. The cabal’s latest intention is to demonstrate how poorly gold performs even when the dollar is weak and interest rates are low. It also appears to be an attempt to disguise the serious financial market problems facing the US in 2005.

The world has told the US to get its financial house in order soon or they will no longer support our fiscal deficits by buying our paper. With spending in Iraq likely to escalate, the US is looking at a squeeze play. The only way to rectify the growing US fiscal problems is some combination of severe spending cuts or to raise taxes. Either one is likely to put a halt to US economic and employment growth. Thus, the US faces a dollar collapse or recession. The Bush Administration must pick its poison. They might get both.

You will read all kinds of drivel why gold is doing what it is from the gold pundits. It is almost unbearable to read as NONE will speak out on the obvious reason why gold is tanking. They will come up with every reason imaginable other that the truth that gold is being forced down in collusive fashion by The Gold Cartel. It is beyond nauseating and contemptible. These will be the same folks who cited gold’s rally due to the weak dollar. Now, that gold has collapsed on its own, the relationship vis-à-vis the dollar will be thrown into the trash bin as an explanation for the gold rout.

I can't make hide nor hair out of the silver action. It continues to collapse at will for no apparent reason. The silver open interest fell 515 contracts to 100,586.

The John Brimelow Report

Gartman well informed! - but liable to be pecked

Monday January 3, 2005

Indian ex-duty premiums: AM $9.87, PM $8.79, with world gold at $433.35 and $435.40. Very high: lavish for legal imports. India is a major support to world gold at these prices. The Bombay Stock Exchange closed at another record high today, implying that further rupee-bolstering inflows are likely.

Today’s most dramatic physical news comes from Turkey. The Istanbul Gold Exchange has posted Turkey’s December gold imports: 24.65 tonnes, 84% up on Ramadan-disrupted November and 129% above December ’03. Imports for the whole year were 250.93 tonnes, 17% above 2003 (which was a record) and, amazingly, more than ’01 &’02 added together. This was despite $US weighted average prices being unchanged from November ($443.33 vs. $444.16 -Turkish currency prices were 2.2% lower.) November and December prices were of course easily the highest in the data matrix the Exchange offers. See

http://www.iab.gov.tr/english/data03.php

and

http://www.iab.gov.tr/english/data02.php

Turkey’s ability to import gold in December at virtually a 300 tonne annual rate despite the extremely high average price is staggering. November imports, it might be remembered, were close to triple November ’03.

Obvious inferences

The demand schedule for gold in the Middle East – where much of this metal is thought to be going – has shifted positively in a massive way.
2) Contrary to popular commentary, this has little to do with the short term oil price. Oil was down both in November and December. Geo-political concerns are the obvious explanation. These are not going away.

3) While last week’s sell-off – and this morning’s - have the aroma of a bear raid, the resistance above $440 seen throughout December is probably Official. Who else could provide this much physical? Without moving lease rates?

3) Eventually the seller will have to retreat. This sort of physical offtake and premiums speak of lows, not highs.

NY on Thursday traded 34,862 contracts (52% more than estimated). The active contract rose $1.40 and open interest slumped by 8,525 lots. This suggests that the view expressed here last week - that a good deal of Wednesday’s selling was short - was correct.

The utility of following The Gartman Letter’s insight (or reflection) of Hedge Fund thinking seems to be proving out. On Thursday Gartman ruminated

"precious metals have acted so terribly. Gold plunged; silver plunged... and the technical aspects of the precious metals markets have become rather overtly bearish…. we said that we'd likely not become bullish of gold again until spot traded back to

$400/oz. We may get our wish, and we'll remain upon the sidelines awaiting that opportunity. However, if there are some who might chose to venture bearishly of gold, we'd not argue with them too strongly at this point…"

Envisaging Gartman, as one does, as a fairly high component of the Hedge Fund information food chain rather than an analyst, this suggests the inclination to short gold was still present in this fraternity. Monday’s abrupt collapse in NY – down 2.2% versus the only 0.75% the Dollar Index action would have suggested – indicates that he was well informed.

But given the ignored but crucial physical market, probably wrong.

JB

CARTEL CAPITULATION WATCH

US economic numbers:

10:00 ISM Prices Paid reported 72 vs. consensus 72
Prior reading revised to from 74.
* * * * *

10:00 Dec. ISM reported 58.6 vs. consensus 58.5
Prior reading was 57.8.
* * * * *

10:00 Nov. Construction Spending reported (0.4%) vs. consensus 0.4%
Prior reading revised to 0.3% from 0.0%.

An update from Jesse:

We had a 'hidden' intervention last week, as the Fed was cranking out record securities lending all week, probably helping the shorts roll against a 10 billion slug of fresh custodial money from one of its client states (Japan or Korea) or perhaps an extortionate move against the Europeans who gave in to the weight of the soaring euro.

Gold under continuing paper assault that is not moving with the averages well, indicating it will be over fairly soon. This looks like a week for early head fakes and then a return to trends.

http://jessel.100megsfree3.com/interventionmeter.gif

-END-

One reason gold will soar against the euro later this year:

Europe 'Will Have to Act on Dollar'

By Edmund Conway
The Telegraph, London
Saturday, January 1, 2005

http://www.telegraph.co.uk/money/main.jhtml?
xml=/money/2005/01/01/cnecb01.xml&menuId=242&sSheet=/money/2005/01/01/
ixcity.html

The European Central Bank will this year be forced to intervene in the foreign exchange markets, economists predicted yesterday, as the dollar narrowly avoided hitting a new all-time low against the euro.

The Bank will either drastically increase the number of euro banknotes in circulation or cut interest rates to prevent the currency pushing much further above the $1.40 mark, warned Rob Carnell of ING Financial….

-END-

Drastically increasing euro banknotes or cutting interest rates is extremely gold bullish, especially against the euro.

Two goodies for you from two very sharp Café members. Both came in over the weekend:

Hi Bill:
In June of 2004 I sent you a chart showing that gold does NOT go down in all US Presidential election years, as was being touted by many a "professional" commentator at the time as a reason to sell. To the contrary, I pointed out that when gold is in a bull market, gold goes UP or at worst has a positive year closing at its highs, even if not closing above the previous year´s close. This was true of the US Presidential election years 1972, 1976 and 1980.

2004 was the first year since 1980 that gold once again had a positive year over year closing. This, to me, breaks the spine of gold´s 20 year bear market. Maybe now more people will, as you say Bill, "get it" and acknowledge that gold is once again in a secular, generational bull market. Please see attached chart.

Now, one might ponder that if this is true, then other strong characteristics of the bear market must have cracked also. This is true and I offer one other major hint that, yes indeed, the PM markets themselves are screaming "to the moon" (again, as you say): for this I show you Nick Laird´s great, but now obsolete, 3 year up/5year down cycle which has also just been broken. Based on this cycle, 2004 should have been a down year but instead was a fourth year up. Please see second attached chart.

The lackluster performance of the mining equity market this year was not at all surprising as so many new companies were launched and the existing ones competed hungrily for new funds that had been denied them during the 20 year bear market. I read somewhere (my apologies to the source for not remembering) that PM share equity financings and mergers consumed 17 billion US dollars in 2004 as opposed to only 3 billion in 2003. For a small market sector, that´s a good piece of change and drew funds away from chasing prices up. I remember in 2001 and 2002 CDE almost tripled its market capitalization without the share price moving up at all. Then in a quick 7 month period from August 2003, CDE exploded from about 1.50 to over 7.50.

Periods of consolidation, restructuring to new realities, and refinancing are NECESSARY in a nascent bull market, especially in an industry that has been so starved for so long as the precious metals industry has been. When I started again my activities in the gold share market in 1999, I traded in and out of positions frequently, and did well. 20%, 40% and even a lucky 80% were good for me then, and out of the portfolio went the shares. Then in 2001, after a tough 2000, I sold positions in 2 companies (HM and ASL) for profits of 15% and 53% only to see the shares blast up another 100% to 500%. This made me restructure my thinking so as to allow me to somehow make gains of over 100%, a feat I thought was to good to happen to little old me (a difficult psychological hurdle). About the same time, Jim Sinclair came online, launched/presented to me (and many others I suspect) through Midas, and both LeMetropole Café and Mineset became daily musts for me. Through these two sites I mustered the courage to calmly (sort of) buy all major dips, employing 10 to 20% of my allocated capital for the sector on each down swing. By mid 2003 I had deployed 83% of my PM funds and by the end of the year had profits in multiples of 100% in all stocks. I got lucky and took large though only partial profits in January 2004. Since then I have employed the buy all large dips and hold strategy that Midas advocates, and feel very well about the portfolio´s prospects going forward. Interestingly, anyone who comes into the community for the first time now and buys, will be picking up shares at levels that I sweated at to allow the market to come down to me during the year. The value in PM shares today is phenomenal; the fundamentals in the gold bullion market keep getting more and more bullish. Did you see the piece on JSMineset where Goldman SachsGoldman Sachs forecasts that net foreign investment income is likely to shift to a sizeable deficit during 2005, growing thereafter. ?

2+2=4 and strong multiple fundamentals for bullion (supply/demand deficit, US budget deficit, US trade and current account deficits, Russia, China, Japan declaredly diversifying their reserves away from the US dollar, world geopolitical whirlwinds, Germany declaring they will not use their full WA allotment, etc.) will continue to equal higher prices for PM equity shares.

But one has to see it to "get it". I am sure that the technical milestones broken as commented above, coupled with the now undeniable positive fundamentals in favor of gold, will certainly catch many peoples' eye as the new year enters and investing strategies are debated, outlined and executed.

Happy New Year.
All the best,

David

G’day Bill,
I have attached a simple analysis of the Markets, which leads me to the conclusions that certain issues are accelerating.

It is now NOT only the Gold Market that is being "manipulated", but also the US$ Index, the US T Bonds, the Dow, Oil, and of course, Gold.

If one looks at each of these Indices, the following time scales become apparent:

1. January to May 2004.

2. May to October 2004

3. October to December 2004

4. December to January 2005-01-01

MARKET MANIPULATIONS 2004

[Blockierte Grafik: http://www.lemetropolecafe.com/james_joyce_table.cfm?cfid=1303167&cftoken=27105194&pid=4325]

There are three "Dominos"; the US$ Index, the US T Bonds, and the Dow.

The critical "Domino" is the US$ Index, and a break below 80 should cause the "House of Economic (Plastic) cards" to unravel.

The UST Bonds and the Dow (and other Markets) should also experience a strong downwards correction, if not Crash.

It would appear that Crude Oil and Gold have yet again undergone yet another cycle of short selling ie they have been paid on the "never, never", through the accumulation of yet more debt.

The time cycles for the manipulation is now getting shorter and shorter.

Cycle 1, from January to May, lasted 5 months.

Cycle 2, from May to October, lasted 6 months

Cycle 3, form October to December, lasted 2 months

Cycle 4, the current one, has lasted from December to present, 1 month.

Cycle 5, with the break down of the US$ Index will last, how long, given it is now in the range 80 to 81??? Unless the "Bhouys" can pull themselves out of the "perverbial", I would suggest that the US$ Indexed will break down below 80 within a month. We are now at the stage of an accelerating crisis?!

It is conclude that "something has got to give", either to US$ Index plus the US T Bonds, plus the Dow, or Oil and Gold. I would suggest the former.

The US$ Index at 80 represents the associated level that it was at in 1995/96, when the Asset Bubbles were created. Correspondingly, that also correspond to the period of Gold price short selling.

The reality of life is that these Asset Bubble peaked in 2001/2002 having formed very large head and shoulders pattern, ie they have peaked long ago. However, the ongoing short selling of oil and gold has yet to be paid, simply put some 17,000 tonnes of gold has been swapped and/or sold. This short selling of Gold has underwritten the Asset Bubbles since 1996, and the "Golden Credit Card" has, as yet, still be to paid.

Dear oh dear………………………..what a mess!!!

Then, lets see what happens next.???!!!

We live in interesting times, do we not.

Och aye
Haggis

The remaining GATA prints, as pre-determined some time ago, are now $1,000 apiece, including shipping costs. There are around 25 of the original 300 limited edition prints available for purchase. Some items of note:

*GATA artist Alain Despert’s work is widely recognized around the world as his paintings are selling quite well from his domain in Bora Bora (http://www.despert.com). In toto his works have doubled in price since Alain created the original painting for GATA.

*Alain is an original painting artist, renowned for his vivid use of colors, who rarely does prints except for very special occasions. Thus, his work is not all over the place in malls all over the world. One of those occasions was for GATA. Prior to that he did one for Anthony Shriver’s Best Buddy program in Miami Beach.

*Alain’s insightful perception came through long ago in what he thought would best represent GATA’s efforts. I went to visit him in San Francisco in early 1999 and reflected upon who we were up against and what we were going to expose. This was way before we knew of US Government involvement in the gold price-fixing scheme. At the time we were only aware of the manipulation by some of the major bullion banks.

*Yet, Alain’s insight was right on the money of a Don Quixote-like effort giving impetus to light reflecting on a dark situation; of an ARMY of people (as in the eventual GATA ARMY of today) getting behind that cause, with the focus of the effort on a US Government-type, banking building. Incredibly, the structure in Alain’s work remarkably resembles the US Treasury in Washington.

The gold shares broke down completely from a technical viewpoint. The XAU fell 2.70 to 95.65, while the dismal HUI sank 8.79 to 206.54. HUI 220 seems a long ways from here. Next support kicks in around the 200 level.

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

The way it is:

*The gold correction camp now has the upper hand. For the first time since the New Orleans convention, they are on the right side of their call - onside at the moment to the tune of $5/$6.

*Gold should not stay below $430 for very many days, or my short-term call will be wrong.

*The Gold Cartel's $6 Rule reigns on the upside and is discarded on the downside. When will the pea-brains in the gold world ever pick this up?

*Hard for me to conceive gold will do exactly what the herd says it will – go down to $400, then they all get long and make a fortune when gold roars later on.

*My friend Mahendra has hit a cool streak. Silver did not explode like he thought it would late last year. He is a guru in so many regards. Never seen anyone like him. That does not make him omnipotent or confusing at times, as he has been of late. Still, he had his people exit gold and silver last week. Says stay out until the end of the month.

*What happened to all the hoopla about the World Gold Council’s GLD? Talk about a dud. The gold price has collapsed since right after its inception, even though the dollar has gone LOWER. As stated in MIDAS over and over, GLD is meaningless compared to what The Gold Cartel does. The World Gold Council should be issued cease and desist orders for their silence re the outrageous manipulation of the gold price.

*Gold has been annihilated with the dollar doing nothing. Where will The Gold Cartel take gold to if they can mount a serious dollar rally? Only the surging gold physical market can stop this carnage.

*The three $10+ takedowns (during Comex trading) within a four week trading period (and two in three trading days) is unprecedented since The Café opened for business. This is not ordinary market action, even for the rigged gold market. The cabal is on a desperate mission to stave off perception of mounting US financial market problems.

*Newmont CEO Pierre Lassonde sold $40 million of his stock at much higher Newmont share prices ($42.36, down $2.05) in November. His firm is plugged in to the Bush Administration’s economic council. Ain’t it grand to have Gold Cartel friends in high places and know/take advantage of what is coming while your uninformed shareholders get buried?

*The euro gold price finished in new low ground at 319. The euro only fell .73 to 134.85 and the dollar only rose .39 to 81.39.

*The savvy Wistar Holt says it all:

Bill,
I just crunched a few numbers.
On December 1, gold closed at $453.50, reaching a high of $456 in the evening. The dollar index was 81.56.
Today, with a lower dollar index of 81.34, gold is $25 lower.
There really is NOTHING else worth talking about except the manipulation!

*While the past month has been one of severe aggravation, it is ironic how GATA’s credibility has leapt off the charts. With the dollar unchanged and gold dropping $30 off its highs, The Gold Cartel has made our case for us.

*And finally, I would like to emphasize a MIDAS point made so often over the past many months as awareness might highlight the coming gold turnaround. And that is the key to the gold market is NOT what the dollar does. It revolves around how the physical market can withstand the efforts of The Gold Cartel to push the price lower. The last few days/weeks of trading action has proved that conclusively.

The real story is how The Gold Cartel has used the dollar action to cap the price on dollar weakness and then attack on any kind of dollar strength when it suited them and when their forces were alerted to maul the price. Think about it. The three big down days over the past month occurred after the pro-Gold Cartel World Gold Council’s GLD lost 15 tonnes of gold overnight AND on two thinly traded sessions with most gold players out for the Christmas holidays. The damage has been tsunami-like from a technical perspective. The black box traders don’t care that is was a holiday induced bashing. All they know is their systems are all turning bearish. Mission accomplished by the cabal after a carefully planned and orchestrated raid. So what if it violates the US anti-trust laws? These people believe they are above the law!

That be known, the gold trading dynamics are likely to change in the months ahead. Gold is likely to charge higher because of numerous other factors than a weak dollar. We must remain vigilant to spot those factors as they come into play.