[Blockierte Grafik: http://www.goldseek.com/news/LemetropoleCafe/lmpc.jpg]
http://www.lemetropolecafe.com
CARTEL CAPITULATION WATCH
The US stock market finally performed poorly as the DOW dropped 134 to 10,381 and the DOG gave up 35 to 2030. Supposedly the major reason given was fear of rising interest rates in the US. Could it be market participants are finally having to deal with the real US inflation story, or is it finally dawning on them the costs of the US war are going to be outrageous?
The good US economic news (was it better sales or higher prices):
April 13 (Bloomberg) -- Sales at U.S. retailers rose 1.8 percent in March, the biggest increase in a year, led by purchases of autos, furniture and building materials, a government report showed.
Last month's gain, the largest since 2.2 percent in March 2003, followed a revised 1 percent increase in February, the Commerce Department said in Washington. Excluding autos, sales jumped 1.7 percent, the most in four years, after climbing 0.6 percent a month earlier. -END-
GATA’s Mike Bolser (the Café witch who yesterday predicted today’s sharp gold drop):
Hi Bill:
The Fed added $6.7 Billion in TOMOs today, April 13th 2004. This action caused the repoo pool to continue rising to $35.03 Billion and also kept the pool's important 30-day ma in an up trend. The DOW continues to track almost exactly on its predicted trend line towards 11,750.
Gold Hammer
The Fed didn't wait until the end of the week to implement its down phase (mentioned in yesterday's commentary) in the DIVG. At this hour gold has been hammered down to $407.90 (PM Fix) while the dollar was up smartly.
I'll have to wait until this evening to get the MCDI and the DIVG numbers, but it seems the DIVG won't be down too far below the current 363 level because the dollar is up so much. However, the DIVG WILL be headed lower...aimed at the predicted 353 point. It may be a chilly few days for gold.
The firm down pressure on silver carries all the earmarks of a last ditch effort to save the shorts or at least reduce the COMEX bailout amounts likely to be provided by the Fed. The news of physical shortages in the UK and Europe are most gratifying.
Is this a turnaround for gold and the dollar?
The 200-day moving average of the DIVG has been in a linear up move and will likely stay there even after the current down move is completed. Based only on the DIVG I don't believe for one minute that today's action is a valid phase change for gold.
Mike
More later (6PM) on the DIVG at:
http://www.pbase.com/gmbolser/interventional_analysis
A comment for those looking to get feedback from the authories:
Bill,
Further to Bob Wansbrough's comments in yesterday's Midas, when a complaint is filed with RS ("Market Regulation Services Inc."), you will receive a form letter that will state something like,
"Please note that staff at Market Regulation Services Inc. ("RS") routinely monitor trading and review all instances of unusual trading. Please note that due to our confidentiality guidelines, we are unable to comment or disclose any information about any matter being reviewed, and as such, you will hear nothing further from us in this regard. However, please be assured that we will take appropriate action."
So there you have it. You make a complaint and it goes directly into a big black hole, never to hear from RS again.
*****
But, there is no inflation:
Morning Papers/Websites
Wall Street Journal
4/13 Rising costs are forcing restaurants to cope, reports the WSJ
The wholesale cost of chicken has risen by 1/3 in the past year and beef has risen 11%. Morton's raised prices by 5% to deal. Andrew Barish at Bank of America believes that commodity prices will likely be a major concern this year but some of the costs will be passed on to consumers. JBX, WEN and Burger King are all working to add chicken to their menus while keeping the prices low. MCD and YUM have the advantage of long-term supply contracts that keep costs controlled.
4/13 KMB, GP set to increase prices, reports WSJ
GP has already said it will raise tissue prices by 6-9%, while KMB said it would raise tissue prices by 6% and PG announced similar increases of 5-6%. The price increases, which the companies are basing on rising commodity costs, could be a sign of a return to leverage in pricing for the companies, according to the WSJ.
4/13 13:48 VIA.B's CBS to increase ad rates by more than 10%, according to CBS President Leslie Moonves -- Bloomberg (40.57 -0.32)
Moonves was speaking at a press briefing to discuss the "upfront" sales, which begin 5/17. Note the WSJ reported on the upfront sales season on 3/24. We note the sellers tend to say pricing will be up, while the buyers tend to posture pricing lower, with regards to the upfront sales.
From The King Report:
Monday’s WSJ on the frontpage, "Price Increases in Asia Fan Inflation Fears in U.S." Bulls aver that US inflation is more dependant on US labor costs, which are 65% of the cost of goods sold. And labor markets have so much slack there is little inflation. Obviously, this refutes the intractabull argument that employment is booming, but there is little logic or reason these days. And it debunks the notion that outsourcing to Asia either doesn’t exist or it’s a non-event…Bill Robertson an Australian industrialist comments on current inflation, "I’ve been chief executive of two major companies int this part of the world and I can honestly say I’ve never seen anything of this magnitude." But Fed officials like Bernanke, Ferguson and Poole see no commodity causation in inflation. And who should we heed, an experienced industrialist, or academics bereft of business or practical experience? PS - McTeer went on bubblevision and said the slack US labor market is keeping the lid on inflation. If so there is no job boom…
Our friend Joel notes Jeff Brashares, president of Pacer Global Logistics, warns North American rail congestion is squeezing container supplies, which could result in a crisis during peak shipping season in summer. And yes, Asia is the culprit…That means higher shipping costs. It’s a good thing there’s no inflation and the Fed can remain patient.
-END:
Interest rates, inflation and precious metals:
Bill;
All the years I spent in the interest rate markets tell me from experience that the bond market will ultimately sniff out inflation in much the same way as we smell a skunk. That is - you don't have to see the whites of a skunk's eyes to know you are in its presence. With the waft of inflation permeating the spring air our central planners have introduced new metrics to their sordid game. By my count there are at least three new 'bullets' with their names on them. The inflation that the central planners are lying about gives off such a stench that it will ultimately 'smoke' the bond market. The major back up in rates will 'pop' the real estate bubble and to make matters worse - we all know how much the beloved stock market loves higher rates. When the stock market falls on its face (likely doing a tango with the dollar on its way down the tubes) we will all be entertained with the 'flight to quality' precious metals trade. Before all this happens we will get a brief opportunity (likely our last) to buy 'cheap' precious metals - compliments of our central planners. One of these bullets are gonna catch the central planners right between the eyes - perhaps in the end it will be a silver bullet that does them in. Time to load up the truck if it isn't full already.
best
Rob
Meg sends a note from London on the silver availability front:
Hi Bill:
After reading your article, "England’s Royal Mint 60-90 days behind in silver coin shipments", I thought I’d check out the silver delivery situation at "Chard", a rather large supplier of silver and gold products in the UK.
Here’s what their site currently shows: (Not much left but the crumbs). Looks like you guys are right AGAIN! Keep up the good work. Meg Davis
Chard: http://www.24carat.co.uk/
Silver Bars:
Prices & Availability
These bars include VAT at 17.5%
Silver Bars:
Prices & Availability
These bars include VAT at 17.5%
Weight
Current Availability
Price £ Inc VAT
5 Kilos
Sold Out
£700
One Kilo
Sold Out
£150
500 Grams
Sold Out
£75
250 Grams
Sold Out
£40
100 Grams
Sold Out
£17.50
50 Grams
Sold Out
£9.50
1 Ounce
Sold Out
£7.50
20 Grams
Yes
£4
10 Grams
Sold Out
£2.50
5 Grams
Sold Out
£1.50
Quantity Prices & Availability
Ten bars or more per size.
These bars include VAT at 17.5%
Weight
Premium %
Current Availability
Price £ Inc VAT
5 Kilos
14.5%
Sold Out
£694.24
One Kilo
15.5%
Sold Out
£140.06
500 Grams
16.5%
Sold Out
£70.64
250 Grams
17.5%
Sold Out
£35.62
100 Grams
18.5%
Sold Out
£14.37
50 Grams
20%
Sold Out
£7.28
1 Ounce
25%
Sold Out
£4.71
20 Grams
30%
Sold Out
£3.15
10 Grams
40%
Sold Out
£1.70
5 Grams
50%
Sold Out
£0.91
One Kilo Kookaburras
Prices
All in uncirculated condition.
Date
Quantity
Availability
Price £
Price $
Price euro;
Our Choice
1
Sold Out
£150
$225
€160
Credit Suisse Silver Bars:
Prices
Weight
Availability
Price £
Price $
Price €
1 Kilo
Sold Out
£160
$235
€240
50 Grams
Yes
£12.50
$21.25
€21.75
20 Grams
Yes
£6.95
$9.95
€10.50
10 Grams
Yes
£3.95
$5.95
€6.50
5 Grams
Yes
£2.25
$3.25
€3.75
Silver Bars and Decorative bars:
When we have stocks, our guide prices are:-
Weight
Price £
Current Availability
One Kilo
£120
None
Ten Ounce
£50
None
One Ounce
£6 Singles
Yes
One Ounce
£5 Quantity
No
The gold shares were pummeled and continue to trade horrendously. The XAU took out its 200-day moving average of 95.93 to close at 95.56, down 6.16. The HUI managed to close above its 200-day moving average of 209.59 with a finish of 213.65, down 13.88.
Few in the gold/silver share investment arena seem to have a big picture take on what is coming down the pike for gold and silver prices. The price action of the shares relative to the gold and silver price action has been lousy all year. When gold and silver pop, they act lethargic. When gold and silver are bashed, the shares do a disappearing act.
When you get gold/silver price liquidations such as what we got today, gold and silver rarely storm right back up. If they do, the first rally usually fails. How many days/weeks it will take for gold and silver to compose themselves to mount another charge to the highs is anybody’s guess. One thing for sure, however. The reasons for them both to do so have not changed one iota. US interest rates remain right above zero, inflation is surging in the US, the dollar fundamentals are still terrible, the Iraq War is a horror show, gold/silver demand is very firm around the world, etc.
It seems like we to through this cycle every six weeks. What a pain. On the recovery side, the move back up should be lead by silver again. The silver information sent your way the past four months has been right on the money. The most recent information should be also. This being the case, silver should not stay down here too much longer and ought to set sights for new high ground fairly soon. The silver charge should lead gold right back up. The Gold Cartel and friends have their chance to cover. Will they take it this time?
GATA BE IN IT TO WIN IT!