The ever alert Jess notes:
Bloomberg and crew glowing over the additions to foreign holdings of US debt in Nov 2004 of 81Billion.
What they fail to mention is that Treasury went back and radically restated every monthly number back into 2002, which is as far back as my spreadsheets go with detailed numbers.
This is where the big increase came from.
***
Speaking of Jesse, what a fab web site – check it out:
The King Report
M. Ramsey King Securities, Inc.
Tuesday Jan. 18, 2005 – Issue 3078 "Independent View of the News"
..The FT: "There are two more telling gauges of how much of a turnround 2005 has been from 2004. First, the bottom 50 performers on the S&P 500 so far this year have shed 11.4 per cent since January 1. Last quarter, the 50 stocks returned 24.4 per cent, leading the robust year-end rally that put the benchmark index up 9 per cent for 2004…in the first eight days of trading in 2005, less than $2bn has flowed into equity funds, according to forecasts by TrimTabs. During the entire month of January last year, fund flows into equity funds reached an all-time high $44bn. The poor performance - and absence of cash flows - has caught many off guard and raises the ominous question: is this the prologue to a bad year?"
http://news.ft.com/cms/s/10d68…d9-9183-00000e2511c8.html
More and more it looks like the average American is tapped out. Our long-time friends at Van Hoisington Management delineate just how perilous the average American’s finances have become. "Household debt was a record 115.3% of disposable personal income in the third quarter, an all time high for the series. The financial condition is only slightly better when household debt is viewed in terms of assets or net worth. This is surprising since the value of homes has increased sharply in recent years, and stock values have somewhat recovered… In the first two months of the fourth quarter, total consumer fuel expenditures jumped to 8.3% of wage and salary income, the highest energy burden since 1990). Fuel expenditures now require an additional 2.1% of total wage and salary income from the lows in 2001. The current oil shock now stands as the third largest of the five events that have occurred since the early 1970s. Each of the preceding oil shocks were associated with recessions." http://www.HoisingtonMgt.com.
Though the fin media heralded the 0.8% gain in Industrial Production for December, they were remiss in mentioning that primary metals production increased 3%; energy production increased 2.84% and paper production increased 1.1% while the inventory building (up 10 of the last 11 months) continues. Several analysts commented that the report is an indication of increasing inflationary pressures…We have commented repeatedly during the past year, as has Dr. Marc Faber, that much of the increase in US industrial production is surging utility output, which is due in good measure to increasing inflation. All those monstrous homes built over the past boom require a lot more electricity and natural gas. Utility industrial production increased 2.7% in December.
-END-
Think we’re confused:
-Fed speakers air differences on rate policy
By Ros Krasny
CHICAGO, Jan 18 (Reuters) - Possible differences on Federal Reserve monetary policy emerged on Tuesday when two regional Fed presidents downplayed the risk of inflation while a third urged greater vigilance against rising prices.
In separate appearances, Minneapolis Fed President Gary Stern and Anthony Santomero, president of the Philadelphia Fed, said interest rates still have room to rise but can most likely continue to do so at a measured pace as inflation stays low.
Sandra Pianalto, president of the Cleveland Fed, followed with a more hawkish view that seemed to favor a more aggressive approach toward inflation.
"It is prudent to move the federal funds rate up to a positive that gives me more confidence that monetary policy is no longer accommodative," Pianalto told a corporate meeting in Pittsburgh.
The central bank cannot underestimate the possibility of inflation creeping in, and pushing up rates sooner rather than later is better than "finding out the hard way," she said.
Fed speakers are out in force this week ahead of the FOMC policy meeting on Feb. 1-2.
Minutes from the December meeting, released on Jan. 4, said that "some" members thought the long period of low interest rates was creating "potentially excessive risk-taking in financial markets."
Those blunt words raised concern that the Fed might accelerate its monetary tightening.
Bond dealers are trying to assess whether the view is widely held on the FOMC or confined to a few members such as Atlanta Fed President Jack Guynn and, based on Tuesday's comments, Pianalto.
Stern earlier told a financial planners group in Minneapolis that he was "not fully persuaded" that excessive risk-taking is occurring.
Santomero did not rule out potential for more aggressive rate policy but returned to the Fed's mantra that the pace of rate changes should be data-driven.
"If signs of price pressure emerge on a consistent basis we will need to consider quickening the pace," he said in a speech to the Philadelphia Chamber of Commerce.
Santomero and Stern, but not Pianalto, are voting members of the Federal Open Market Committee in 2005.
"The Fed is going to keep raising rates and still runs the risk of speeding up their rate hike efforts if the inflation news is bad," said Steve Gallagher, U.S. chief economist at SG Corporate & Investment Banking in New York.
STERN, SANTOMERO SEE GROWTH, LITTLE INFLATION RISK
Santomero and Stern suggested Fed policy could most likely stay on the track it has been on since June, when the fed funds rate was at a four-decade low of 1.0 percent and the FOMC started lifting rates by 25 percentage points at each meeting.
The comments had little impact on the bond market, where short-term rate futures already price in rate increases in February, March and most likely May, pushing the fed funds rate to 3.00 percent.
"If the economy evolves as I expect over the next year or so -- with continued output growth, steady increases in employment and reasonably low inflation -- then I expect we will continue to move the federal funds rate toward neutrality at a measured pace," Santomero said.
Stern termed the U.S. economy "fundamentally sound, fundamentally resilient," and said rates are "clearly not at a restrictive level."
U.S. real GDP growth was about 4 percent and 2005 could bring a similar performance, even given the drag created by high energy prices, Stern told the financial planners.
Santomero pegged GDP growth at 3.5 percent to 4.0 percent and employment growth at 150,000 to 200,000 a month.
Turning to the U.S. trade and current account gaps, Stern said the United States would get a boost if overseas economies grew more quickly.
Santomero said the lagged impact of the lower U.S. dollar should help stabilize the U.S. net export position in 2005. However, he warned that the falling dollar could lessen competitive pressures on domestic producers, adding to inflation.
Market interest rates could also be forced up by the large U.S. budget deficit and by the potential for big inflows of foreign capital into the United States to reverse, Pianalto said.
-END-
This potentially significant market happening was overlooked today:
Bond markets braced for GM downgrade
By Dan Roberts and Jenny Wiggins in New York Jan 16 2005 23:06
Corporate bond investors are bracing themselves for a possible downgrade for General Motors, one of the largest borrowers in the world, and fear its effect on the wider market.
The troubled US vehicle maker, which has $291bn of debt outstanding, is teetering on the edge of a fall to junk rating status, a move with serious repercussions for many fund managers only allowed to hold investment grade debt.
On Friday, Standard & Poor's took the unusual step of announcing it was "focusing on the appropriateness of the stable rating outlook" for GM despite reaffirming its existing BBB- status, one notch above junk….
-END-
So was this:
Semico predicts semiconductor market slowdown in 2005 (INTC, MSFT)
By Alistair Barr
1/17 SAN FRANCISCO (CBS.MW) -- Semico Research Corp., a Phoenix-based technology consulting firm, said sales of semiconductors will weaken in 2005 as interest rates and oil prices rise, growth in consumer spending slows and the U.S. dollar falls. Semico's Inflection Point Indicator (IPI), which analyzes data such as book-to-bill ratios to predict industry sales 8 to 9 months in advance, was 14.23 in November, down 5.8 percent from the previous month, Semico said. This was the largest percentage drop since August 2001, when the IPI fell 8 percent, Semico explained…
-END-
First Greenspan let the cat out of the bag. Then Paul Volker revealed the US made a mistake not managing the gold price enough to prevent the dollar from tanking so badly in the late 70’s/1980. Now this…guess they were in there after all, just without enough oomph and vigor:
Bill,
In today's WSJ A-1 story, "As Dollar Weakens, Hidden Strengths May Stave off Crisis" there is a paragraph that is new information to me unless I previously missed it.
Referring to the 1970's dollar crisis and comparing it to today it states, "Worried the falling dollar was undermining its anti-inflation efforts, the Carter administration announced a multi-part support package on Nov. 1, 1978: The Treasury would use gold sales and foreign borrowing and draw on its reserves with the International Monetary Fund to defend the dollar. At the same time the Federal Reserve raised its discount rate a full point."
Carter used gold sales to defend the dollar? Surely then Reagan, Bush, Clinton and Bush II must have followed. I never realized it was official White House policy back in 1978 to rig the price of gold. I also never recall the Carter administration announcing this policy to the public.
James McShirley
Don’t know whether this is good or not, yet it is about as bullish as I have seen the mainstream gold world in years:
Gold price to reach the highest level since 1981
January 17, 2005
By Stuart Wallace
London - Gold prices will reach their highest level since 1981 this year as a weakening dollar boosts demand for the metal as a store of value, Deutsche Bank has said.
The bank has also increased its estimates for aluminium, coal and iron ore prices.
Gold in 2005 would average $458.80 an ounce, 7 percent more than a previous estimate, Deutsche Bank said in a report dated January 13.
The average next year would jump to $490.30, the highest since 1980, according to Europe's third-largest lender.
Gold closed down $4.10 at $422.50 an ounce in London on Friday. The metal's average price rose 13 percent last year to almost $410 an ounce, the third annual gain, as the dollar fell against all major currencies.
"Further weakness in the US dollar as a result of unsustainable external imbalances and only measured return to a positive real interest rate environment in the US is expected to be particularly beneficial to dollar gold prices," said London analysts John MacKinnon and Tama Willis.
The forecast for this year's gold price was higher than the $435 median from 37 analysts surveyed by Bloomberg last month.
Estimates ranged from $395 to $550. Frankfurt-based Deutsche Bank had the seventh-best mining analysts in 2003, with UBS, ABN Amro Bank and Merrill Lynch the top three, according to the Thomson Extel survey.
London-based precious metals research group GFMS said on Friday that gold prices would probably rise to a 16-year high by July and average $447 an ounce in the first half.
Gold climbed to $454.20 in December, the highest price since June 1988. The average price was $614.49 in 1980.
"The kind of buying you can see from speculators and funds could take the gold price above $500," said Gillian Moncur, an analyst at London-based consultant CRU International. "The dollar remains the dominant factor."
The euro touched a record high of $1.3666 on December 30. The dollar's value has eroded as US trade and fiscal deficits have widened…
"An extended period of strong growth in China, renewed strength in the US economic outlook in 2005 and a rebound in Japanese and euro zone growth in 2006 are set to deliver another two years of above-trend global industrial production growth," the bank said.
-END-
Another reason to rag on over the World Gold Council:
India wedding jewellery orders rise, despite price
Tue January 18, 2005 5:05 PM GMT+05:30
VICENZA, Italy (Reuters) -- Gold jewellery demand for India's current wedding season is up around five percent on the year-earlier period, with customers embracing rising gold prices as an enhancement to the metal's investment value.
India's wedding season accounts for at least 60 percent of its annual bullion use which at some 600 tonnes annually makes it the world's biggest gold consumer, according to Indian jewellers at an Italian trade fair. "The reason people are buying gold in India is for its value as an investment. The orders for the current wedding season are good," said P.K. Jain of Mumbai-based Diastar Jewellery Limited, adding that some 14,000 weddings took place in November on the first day of the season…
-END-
That article states why gold is in such demand in India, (as well as in the Arab world and in the Far East). It is the investment quality in high karatage jewelry which is the allure for buyers in these countries, not the high fashion aspect. So why is the WGC spending millions to promote high fashion jewelry. It makes no sense, unless your real raison d’ etre is downplay the investment aspects of gold in order to aide The Gold Cartel.
Rhody the fiddler:
Hi Bill:
I did a little fiddling with a calculator just now, and you might be astounded to learn what $421 gold translates to in inflation adjusted 1960 dollars. Since a 1960 dollar was 12 times the size of the present one, the present price of gold is equal to $35 in 1960. Sound familiar? Mind you when gold was fixed at $35 in 1960, it was probably already undervalued given inflation over the previous 16 years.
And what of silver? Today it closed at $6.62 and this represents an inflation adjusted price of 55 cents in 1960. Silver actually was 93 cents in 1960, so we see that silver is still grossly undervalued relative to gold. The fact that there is four times as much gold in the world than silver makes the present valuations even more ludicrous.
Regards, Rhody.
When it comes to the gold shares, I am a long term investor as veteran Café members well know. Until the general public starts to pour into this tiny sector, it makes little sense to me to go to the sidelines. This was a mega winning strategy in 2002 and 2003. It was a huge bummer last year even though gold rallied some 5%. My bet is 2005 is a big one for us and we go back to watching our equities grow instead of disappear.
It’s time to end the pain and make some gain. If the HUI blows through 200, then throw this analysis out the window. However, seems to me we have bottomed. Certainly the dismal sentiment so prevalent everywhere is bullish.
Take my largest holding, Golden Star Resources, which is back in the pooch house. It was the dog of dogs, trading as low as 35 cents only a few years ago. In November of 2003 it soared to $8.64, only to collapse, taking out $3.50 only a last week. There were several factors which contributed to the drubbing of the share price last year. However, for the most part they seem to me to be one-off events which are behind them. Their gold production is on the rise, their exploration projects are top-shelf and the management is outstanding. Look for GSS ($3.77, up 10 cents) to take out its highs of last year and surpass $10 per share later this year.
Golden Star Resources - GSS (punch US)
http://new.stockwatch.com/swne…utilit_snapsh_result.aspx
Speaking of quality exploration companies, Seabridge Gold ought to be geared to make another run at its highs. it finished out today at $3.20, a buck off its high, and made just THIS PAST NOVEMBER. 2004 that is, not 2003! Seabridge has held up better than most of my holdings, dropping 33% off its highs instead of my standard 40 to 60%.
Seabridge Gold - SA (punch US) http://new.stockwatch.com/swne…utilit_snapsh_result.aspx
The gold shares seem to want to hold. HUI 200 represents significant support with 210, then 220 key resistance. Love to see a gap opening and run sharply higher for a change. The HUI closed right on its downtrend set in motion right below 250.
HUI
http://bigcharts.marketwatch.c…&o_symb=hui&freq=1&time=8
The XAU gained .77 to 94.02 and the HUI finished at 204.80, up 2.60.
Happy days are not here again. Yet they should be right around the corner.
GATA BE IN IT TO WIN IT!
MIDAS
A book to read after James Turk’s "Coming Collapse Of The Dollar," published by Doubleday and found at http://www.amazon.com or http://www.dollarcollapse.com/:
Hi Bill,
Don't know if you have read "Crossing the Rubicon", by Michael C. Ruppert, which I have just started and have provided a taste of it in the attachment. It is a riveting insight of all the other nefarious things our usual suspects, the banking cartel are involved in. Anyone who doubts there are conspiracies should have this book read to them, because not only do these crooks conspire against the financial markets, they have plans to eliminate 2 billion people from the planet as a means of making the dwindling supplies of energy last longer. They are so much more evil than any of us realize! This book is going to surpass Griffin's Creature from Jekyll Island as a new standard for reference. I'm only 100 pages into it and it's 674 pages long.
Best,
Rich C
Good people running this company. Talk about a base:
SUR (62 cents Cdn, up 3 cents) – punch CA http://new.stockwatch.com/swne…utilit_snapsh_result.aspx
SUR AMERICAN GOLD CORPORATION
2300-1066 West Hastings St. Vancouver, BC, Canada V6E 3X2
Ph (604) 601-8270, Fax (604) 904-8957
e-mail suramerican@telus.net www: surgold.com
NEWS RELEASE
January 18, 2005
SUR DISCOVERS MAJOR GEOPHYSICAL ANOMALIES
AT ITS COMVAL GOLD PROJECT
Sur American Gold Corporation (SUR.V) announced today the discovery of a strong 800 metre wide and minimum 400 metre deep resistivity anomaly that is open at depth and partially coincident with a moderate chargeability anomaly at its Comval Gold and Gold-Copper project, located in East Mindanao, Philippines.
Also identified was a second significant anomaly measuring about 350 metres by 400 metres in the northern area of the project, about 6 km to the north of Batoto and a number of smaller anomalies.
These are some of the results of a large induced polarization geophysical survey conducted between March and September, 2004 by Elliot Geophysics International Pty Ltd (Dr Peter Elliot, M.Sc. PhD, M.AusIMM). This survey is the first geophysical survey using modern techniques completed in the Comval Gold Project area in the past 30 years.
"The survey was highly successful and in conjunction with the comprehensive ongoing geological program confirms the enormous potential of this part of the Company’s total area in the Compostela Valley," says SUR President and CEO, Mr Rennie Blair.
The major anomaly highlighted above occurs within the Batoto Gold project area in a zone called Santa Fe about 2500 metres to the south west of the Clark area and is represented by a very strong 800 metre wide and minimum 400 metre deep resistivity anomaly (top figure), which is open at depth and to the west and partially coincident with a moderate chargeability anomaly (lower figure). Moreover, the overall dimensions of this new discovery are not known and clearly further geophysical surveys are justified in order to help determine the magnitude of the Batoto gold system.
Further, this anomaly is believed to represent a very large intrusive (porphyry?) body which is relatively more resistive, perhaps due to a greater concentration of quartz veins, and probably/likely contains a greater concentration of sulphides (higher chargeability) than the surrounding rock mass. The top of the anomaly starts at approximately 600 metres above sea level (250 metres below the current surface) and is interpreted by Dr Elliot to continue to below 200 metres above sea level.
The anomaly is overlain by an intensive alteration system containing silicification and gold mineralization over a width of at least 1000 metres. Sampling is ongoing in this area and visible gold is seen in panned samples.
The area appears to be continuous with gold mineralization which occurs for at least 3,500 metres to the north east and which also continues to the north-west, west and south west for a further distance of at least 900 metres. Limited exploration to-date beyond this area indicates that the Batoto system is still wide open.
Based on all the currently available geological and geophysical data in the Comval area and likely geological models the Company believes that the large anomaly may represent a deeper gold-rich copper porphyry system and the gold mineralization (wider veins, veinlets and microveinlets together comprising a very large stockwork gold system) that has been discovered to date appears to occur peripheral (adjacent) to this intrusion.
To support the above postulated model increasing copper mineralization has been observed in recent mapping of the many creeks that cut through this area. These areas, however, are still higher than the expected top of the anomaly.
The overall dimensions of this new major discovery are not known. To test this, further geophysical surveys are justified (and planned) to help determine the magnitude of the Batoto gold system. In addition a geophysical survey also will be undertaken within the historic copper gold system that occurs on the eastern side of the Agusan River Valley.
"The Company is highly encouraged by this new discovery which continues to indicate the potential for a very large bulk mineable gold and now a possible gold-copper system at Batoto," added Mr Blair.
OTHER DEVELOPMENTS AT BATOTO
The Clark exploration crosscut at Batoto, which the Company believes may represent typical grade type distributions for Batoto, has now progressed 111 metres from the tunnel portal. The crosscut continues to encounter a wide higher grade zone which is now 50.5 metres wide and averages slightly more than 3g/t gold. The entire crosscut averages about 2 g/t gold with every 2-4 metre sampling interval well mineralized.
The sampling results from the Clark Crosscut which is between 40-50 metres below the surface clearly indicates the strong possibility of open cut mining at Batoto with processing by simple CIP and/or heap leaching methods.
As previously reported and following the continued excellent metallurgical characteristics as determined from the CIP trial processing the Company is now proceeding rapidly to establish an on-site trial heap leaching operation. The Company believes that positive results from this trial could result in future operations at Comval involving both CIP and heap leaching operations and is presently completing all necessary documentation for continued metallurgical testing.
The area around the Clark exploration crosscut has been selected as the initial drilling area. The drilling will be undertaken to a depth of about 120 metres and will consist of about 30 diamond drill holes. It is expected that this initial program will be followed by a much larger diamond drilling/reverse circulation drilling program. However, based on results to-date important additional geological mapping and sampling is underway and following a review of these results, the proposed initial drilling program can be more precisely scheduled.
The Company invited International Independent Consultant Economic Geologist Nigel Maund, Bsc (Hons), Lond. MSc, DIC, MBA, MIMM, SEG to the Comval Project during January 6-8. Mr Maund has more than 30 years’ international experience in Economic Geology including significant experience in the Philippines. In conjunction with his brother, Clive Maund a well known Technical Analyst/Newsletter writer, they will be preparing an independent report on the Company that should be issued in the near future.
Assays are undertaken at the JBMM laboratory at Monkayo, Compostela Valley Province using the 30 gram fire assay method with frequent check assaying undertaken at the IPL Laboratories in Vancouver, Canada, an ISO certified laboratory. To date the Company has established excellent comparison between assays undertaken locally and those completed in Vancouver.
All sampling practices are approved by Mr Rennie Blair, Company President MSc, F.AusIMM who is the qualified person as required by National Policy 43-101 and who is the technical person responsible for this news release.
Sur American Gold Corporation is a well financed exploration/development company which trades on the TSX Venture Exchange (Canada) with trading symbol SUR-V.
On behalf of the board of directors
Alicia Nicholson
Director
Contacts: Sur American Gold Corporation Ph 604 601-8270
Renmark Financial Communications (514) 939-3989. Neil Murray-Lyon or Franca Filippone
The TSX Venture Exchange has neither approved nor disapproved the contents of this news release
ZitatAlles anzeigenOriginal von Schwabenpfeil
Hallo Jürgen,
Teamfähigkeit und Toleranz für andere Meinungen und Interessen wären es auch.
Wenn mehrheitlich kein Interesse mehr an den Texten aus dem Le Metropole bestehen sollte (wofür momentan wenig spricht) können die Texte auch jederzeit weggelassen werden.
Gruß
Schwabenpfeil
Ich hatte verstanden das Juergen sein ego guuuuuuuuuuuuut war 
Clive Maund gibt eine Alarmmeldung bzgl. eines sektorweiten (!) Ausbruchs der Gold-/Silberaktien nach oben:
Analyse, die belegt, dass der Aufwärtstrend beim Goldkurs / Goldaktien nach wie vor vorhanden ist:
January 19 – Gold $422.40 down 10 cents – Silver $6.58 down 4 cents
Gold Demand Continues To Surge / Terrible US Stock Market Action
"Such seems to be the disposition of man, that whatever makes a distinction produces rivalry." --Dr. Samuel Johnson
GO GATA !!!
Quite the turbulent day. Gold followed dollar weakness early and rallied enough to go up $3.80 during the early part of the Comex session. For a moment there was even a bit of gold excitement, a no-no in the eyes of The Gold Cartel. A sign they would go into action was the shares’ sluggish reaction to the firm bullion market.
The US economic news was good, yet the only immediate reaction was for the dollar to weaken further (it was a good deal lower already). Gold continued to run with the euro rally, a rally which the cabal abruptly cut short for both.
All of a sudden the dollar reversed course sharply and the euro was hit hard. Gold began a steady decline, going down 60 cents on the session, which was quite a swing.
As best I could, I checked around for the reason for the dramatic change in mood. Couldn’t find any. In the end, the only reason which made sense is The Working Group on Financial Markets knew Warren Buffet would be on CNBC and would talk about his bearish dollar position. To calm down its effect, the PPT went into action. Buffet:
DJ Warren Buffett: Tough To Find Good Stk Picks - CNBC
DJ Warren Buffett: Further Dollar Declines Likely - CNBC
WARREN BUFFETT/CNBC: NORMALLY INFLATION BAD NEWS FOR EVERYBODY
DJ Warren Buffett Expects Continued Rise In Inflation -CNBC
WARREN BUFFETT: DOLLAR DECLINES UNLESS POLICY CHANGES
***
Last week our STALKER source reported Swiss Refineries could double their output and still sell out the refined gold. This is how incredibly brisk the demand for gold is out there around the world. Today our camp received information from another source which confirms what our STALKER source sent our way. Business is as strong as it has EVER BEEN, according to the refiners.
So why isn’t the price reflecting such strong demand from around the world? Simple. The Gold Cartel is making sure enough central bank gold is hitting the market to keep the price under control to keep the dollar slide in check.
Gold coming from central banks outside of The Gold Cartel activity is also hitting the market:
Sweden's Riksbank, meanwhile, announced it had sold 15 tonnes of the metal since September. Under the Central Bank Gold Agreement, the Swedish institution can sell 60 tonnes over five years.
However, the difference is this gold has already been factored into the market with demand still far exceeding mine and scrap supply. It is the undisclosed gold coming via The Gold Cartel that is keeping the gold price from soaring.
To aid their efforts to cap the price the cabal turned the specs into sellers, which in turn affected supply coming onto the market. Delta hedgers in the option pits, for example, would be forced to sell as the price collapsed. This helped to make the task of The Gold Cartel relatively easy, once they got the ball in serious motion. The breaking of $430 was the straw that broke our backs short-term. The good news is the spec selling should be coming to an end:
Funds' Gold Liquidation May Be Nearing End
1619 GMT [Dow Jones] Analysts say long liquidation in gold from large specs may be drawing to an end. Their net length is at the lowest level since August and only 10,000 lots or so off cycle lows in the past couple of years. If this liquidation has about run its course, gold may put in a base after declining over the last several weeks…. –END-
With the cash market as firm as it is, hard to see staying down at these cheap price levels too much longer.
The gold open interest fell 1078 contracts to 275,630.
Silver followed gold down after early strength. The silver open interest rose 460 contracts to 98,962.
The dollar rose .18 to 83.64 and the euro fell to 130.01, down .39, after spending time early on above 131.
The John Brimelow Report
Central Banks of Hedge Funds the threat? Pring positive
Wednesday, January 19, 2005
Indian ex-duty premiums: AM $8.48, PM $7.38, with world gold at $422.50 and $424.05. Very ample for legal imports.
The prospects for a firmer yen appear to be shriveling interest in leveraged gold exposure on TOCOM. Volume fell 40% to only the equivalent of 14,697 Comex contracts, and open interest slipped the equivalent of 427 Comex lots to only equal 108,620 Comex lots. The active contract was unchanged; world gold went out 40c below the NY close. (NY yesterday traded 34,788 lots; open interest declined 1,077.)
On the other hand, Reuters reported yesterday that kilo bar premiums in Tokyo had risen to 75c, which is quite high, suggesting that physical demand is rising. This is not a contradiction – the two markets cater to different strategies. Because of the yen’s firmness, yen prices are now back to the level of last spring when the US price was in the $380s; bottom fishing is a reliable Japanese habit.
Quite a bit of Central Bank gold news emerged in the past few days. No less than three ECB subordinate Central Banks sold a total of about 4.2 tonnes last week, picking up the pace, while the Swedes (not under the ECB of course) reported selling 15 tonnes in the last quarter of last year. They indicated an intention to sell a total of 60 tonnes during the current Washington Agreement, a third of their total; the first transactions in gold since 1971.
South African Finance Minister Manuel attracted some derision for apparently accepting that Central Bank selling is a wide spread and ongoing feature of the gold market. Some Investment Bank commentators find the concept that someone would not talk his own book astonishing! They are on surer ground is expressing puzzlement about Manuel’s attitude to IMK sales. Based on personal observation of this gentleman, I think he may very well not grasp the distinction between using gold to facilitate accounting maneuvers and actual sales. UBS expressed the view that, as in 1999, enough votes will not be forthcoming to permit sales.
The publication of the Swedish news however, reminds one that other Bank reports will be emerging: given the market action in December, announcement of a large sale seems quite possible.
In commentaries on Monday and Tuesday, the Gartman letter forecast a "train wreck" in gold, for no especially compelling reason. This suggests Hedge fund shorts are still in place; quite likely the source of the ‘lumpy selling" noted by UBS yesterday.
A lonely favorable voice is raised this morning by the long term technician Martin Pring:
…the Goldman Sachs Precious Metal Index is deeply oversold. Overbought/oversold KST reversals have often been a good precursor of a short-term trend changes. Currently, the KST is still declining, but the smoothed RSI has begun to tick up. If the Index can rally above the blue down trendline to say, 581, this would most probably result in a KST reversal.
Any rally is likely to run into resistance at the extended neckline around 602. The (XAU) (not shown) experienced an outside day on Tuesday. It’s downtrend line is currently at 95, so a break above this level would suggest that a short-term goldshare rally is underway. (JB emphasis)
JB
