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

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Business

April 15, 2004

Rothschild withdraws from gold-fixing chair

By Jon Ashworth

NM ROTHSCHILD, the City merchant bank, is withdrawing from the twice-daily London gold fixing which it has chaired for the past 85 years. The decision, which leaves 40 jobs under threat in London, is part of a wholesale withdrawal from commodities sales and trading in the UK. Rothschild’s links with gold date to 1809, when Nathan Mayer Rothschild began dealing in bullion. The five Rothschild brothers supplied gold to Wellington’s army in the closing stages of the Napoleonic Wars.

The firm was appointed bullion broker to the Bank of England in 1840 and went on to operate the Royal Mint Refinery. It was asked to chair the twice-daily gold fixing when it commenced in 1919.

Discussions are being held with other members of the fixing to ensure an orderly handover. The firm will continue to chair the fixing for as long as necessary.

The other members of the fixing are Deutsche Bank, HSBC, Société Générale and ScotiaMocatta, the bullion banking division of the Bank of Nova Scotia. An outsider is expected to replace Rothschild.

David de Rothschild, chairman of NM Rothschild, admitted that the withdrawal from gold was “a bit of a sadness”, but said the economics no longer made sense. Commodities trading accounted for 2.2 per cent of Rothschild’s operating income in the year to March 2003, compared with 8.6 per cent in the late 1990s.

The price of gold is fixed daily at 10.30am and 3pm, when representatives meet to trade gold for physical settlement.

Was Rothschild (nur?) früher so alles "bewirkt" hat mit ihrem Gold!

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Rothschild, the bank built on gold, quits market

By William Kay
15 April 2004

After 261 years, N.M. Rothschild & Sons, the most prestigious bank in the City of London still owned by its founding family, shocked the financial world yesterday when it pulled out of trading in gold and other commodities.

The chairman, David de Rothschild, said: "Our income from commodities trading in London, including gold, has fallen as a percentage of our total income in each of the past five years. Following a strategic review of our activities we have concluded that this is no longer a core area of activity and have, therefore, decided to withdraw from the market.

"We remain committed to growing further our activities in specialist commercial banking, private banking and trust services, and objective relationship-based investment banking advice."

As part of the decision, Rothschild will no longer take part in the twice-daily London Gold Fixing, which it currently chairs and which has been held in its offices since 1919.

Rothschild's roots lie in gold. Its origins date back to 1743 when a German goldsmith, Amshall Moses Bower, opened a counting house in Frankfurt. He placed a Roman eagle on a red shield over the door. Rothschild is German for "red shield", and Bower's son adopted the name.

By the end of the 18th century Rothschild was lending to governments and helped to finance the Napoleonic wars in the early 19th century. Nathan Rothschild paid for an attack on France by the Duke of Wellington by smuggling gold through France. Through its command of gold Rothschild effectively became paymaster to the British Army.

In 1825 Rothschild rescued the Bank of England after a run on gold, causing an economic crisis and the collapse of 145 banks. Rothschild shipped £10m of gold into the Bank and became its official gold broker. Rothschild manufactured gold bars for more than 100 years, until 1967. It also owned and operated the Royal Mint. By the end of the 19th century Rothschild had twice bailed out the US government when its gold reserves fell to what were regarded as dangerously low levels.

After the First World War, the victorious governments were anxious to stabilise the price of gold, and asked Rothschild to organise what became the London Gold Fixing. Despite the development of 24-hour trading, at 10.30am and 3pm, every day for the past 85 years, representatives of the five leading London gold dealers have met at Rothschild's offices in St Swithin's Lane to fix the price.

Immer schön auch zwischen den Zeilen lesen!

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http://portal.telegraph.co.uk/…04/04/15/ixfrontcity.html

Rothschild to pull out of gold market after 200 years

By James Moore (Filed: 15/04/2004)

The investment bank that has chaired the London meetings setting the world gold price since 1919 is quitting the market.

NM Rothschild will withdraw from all its commodity trading activities, which also include an oil trading business set up less than two years ago, as part of a strategic review.

The move brings to an end nearly 200 years of tradition. NM Rothschild was founded in London in 1810 by Nathan Mayer Rothschild, who helped finance the Duke of Wellington's army in the Napoleonic wars through gold trading.

The company hosts and chairs twice-daily meetings which effectively set the world's gold price.

The meetings are held in a plush chamber in the bank's offices at St Swithin's Lane in the City. The other four firms involved are Deutsche Bank, HSBC, Canada's Scotia Bank and Societe Generale.

During the fixes, telephone lines are kept open to trading rooms where dealers are in touch with customers. Potential price movements are unlimited and the fix has been known to take up to two hours, although it is usually over in a matter of minutes.

The chairmanship of the meetings is likely to be rotated between the four remaining banks in future. Gold industry sources also predicted that the meetings would be replaced by telephone fixing.

NM Rothschild's withdrawal from the gold market is being seen as one of the first major strategic moves by Baron David de Rothschild.

He set in train the strategic review after taking control of the bank from his cousin, Sir Evelyn de Rothschild. Sir Evelyn has been a champion of Rothschild's gold trading although a spokesman for the bank said he understood that Sir Evelyn supported the decision.

The bank's finance director Andrew Didham, who conducted the review, said commodities now accounted for just 2.2pc of Rothschild's operating income from 8.8pc in 1999.

"There is always a sadness that a bit of history is over, but we decided that the commodities business did not really fit with our other businesses," he said.

While the gold price has surged, mining companies have become less interested in hedging and trading volumes have fallen. Observers also said rival banks tended to have better links with the hedge which now make up a sizeable proportion of the market.

Simon Weeks, chairman of the London Bullion Market Association, said: "It is very sad to lose such a long-established member of the gold market but we have lost participants before, such as Credit Suisse, and the market will continue."

Rothschild has yet to decide whether to sell or close its commodities business, which employs 40 people. The company hired a number of senior traders when it set up its oil business in 2003. The price of gold fell by $7 to $402 an ounce yesterday.

20 March 2004: Steady nerves needed to grasp golden opportunity
10 March 2004: Sir Evelyn to step down at Rothschilds
6 December 2003: A coin in the hand is still better than a golden promise

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April 14 - Gold $399.10 down $7.50 - Silver $6.99 down 45 cents

Gold, Silver Crushed On Extremely Bullish Inflation News

Zitat

We live, alas, in a time of lies. If we stay silent, they build up like mud piling in front of a door. The deeper the mud, the harder it is to dig out from it... Paul Rogat Loeb (American Ethicist and Journalist)
GO GATA!!!!!

Can it get any more bizarre? The answer is yes when you have been dealing with what GATA has learned over the last 5+ years. The essence of Washington and New York when it comes to the financial markets is spin and deception must be portrayed to the public above all else.

Even with hedonic fine tuning, the best the US Government could come out with for last month’s CPI was .5%, way above what Wall Street was looking for. However, based on the past month’s MIDAS commentary, it should surprise none of us. How could it not come out like it did with all the recent anecdotal evidence of steep price inflation presented to you by fellow Café members? The trade number was terrible too, coming in right above $42 billion.

The Reuters report below failed to mention last month’s number was revised upwards to $43.4 billion.

April 14 (Bloomberg) -- Prices paid by U.S. consumers in March rose 0.5 percent, a fourth straight increase, boosted by rising energy, transportation and clothing costs. Excluding energy and food, core prices climbed the most in two years.
The increase in the consumer price index followed a 0.3 percent gain in February, the Labor Department said in Washington. Core prices jumped 0.4 percent, the largest rise since November 2001, and were 1.6 percent higher in the 12 months ended in March.

WASHINGTON (Reuters) - The U.S. trade deficit narrowed in February as a combination of the weak U.S. dollar and stronger economic growth propelled both exports and imports to record levels, a government report showed on Wednesday.
The February trade gap totaled $42.1 billion, down more than 3 percent from January and slightly below analysts' pre-report expectations of $42.5 billion.

-END-

Days ago The Gold Cartel set up their planned assault on gold and silver perfectly (gold and silver had to be mauled BEFORE the CPI number came out). This morning gold was due almost $5 lower even though the euro was close to unchanged. The cabal’s attack on bullion and silver to force out black box tech funds and hedge funds worked to a tee. The funds were MASSIVE sellers all morning long. When gold took out $400, houses usually associated with buying for the mines showed up as big buyers. This is just a hunch, but if this is the Last Hurrah, significant sell-off by The Gold Cartel, it wouldn’t surprise me if Barrick Gold was not one of the major buyers this morning, along with AngloGold.

With the news in Iraq so horrendous and economic news like we just received, gold and silver should be flying. However, once again, when you know what GATA knows about the corrupt price managers in New York and Washington, today’s market response by gold and silver is no different than we have seen for many years. MIDAS and Bill Buckler have long pointed to what BB calls the, "reverse Gold barometer," to measure the seriousness of the financial situation by the fall of the Gold price. For more than two decades, the bigger the crisis, and the more that Gold would have been expected to rise in reaction to the crisis, the more it fell."

Today was a day like all cabal days!

However, the game The Gold Cartel has been playing with gold and silver has be to on its last legs, mainly because they are running out of enough physical gold and silver to continue this scam. As mentioned days ago, this attack was planned in order to turn the funds sellers, so the price managers could do some serious covering. How much they will manage to cover remains to be seen. What we do know is these Gold Cartel attacks have failed all year long as gold continues to pop right back up due to surging physical market demand.

The gold open interest fell 10,279 to 295,144.

One other reason The Gold Cartel and Working Group on Financial Markets needed to bang gold was to prevent the bond market from really blowing up with all the derivatives out there attached to the bond and mortgage markets. What the derivatives market players hate most is volatility because it can create unanticipated price distortions and blow up their trading models. As is, the long bond and 10-year note are under severe pressure.

Look at what the 30-year long bond has done over the past few weeks:

http://futures.tradingcharts.com/chart/TR/64

The drop in the gold price with such a positive geopolitical and US inflation setting is no less than stunning AND sickening.

June gold
http://futures.tradingcharts.com/chart/GD/64

Silver has been taken to the cleaners, dropping $1.30 per ounce in a week and $1.12 in just two days, close to 15% of its market value. Morgan Stanley was an aggressive seller once again today. What changed in a week? Besides the market drop, almost nothing except the silver fundamentals became more positive.

This is very painful, but something I have been through before. This sort of "killer move" often leads to the biggest commodity price spikes of all.

All I need to do is go back to the 1987 incredible copper market move up to offer a reference point for you. We had expected the copper price to explode the last half of 1986 through May of 1987. It did nothing. We could not understand why because we knew the world had run out of all excess copper supplies. On the first notice day of May 1987, there were no copper deliveries. I said that’s it. Here we go! And we did. Copper went steadily up from 64 cents to around 90 cents when the crash of 1987 hit in October. Copper fell 12 cents in one day. Ruin was right around the corner for many of us LOADED up with copper futures, etc.

An urgent call went out to my friend and colleague Frank Veneroso about what to think and do. He said, "The financial market convulsions were just that. However, the US and world economies would not suffer much. The crash was a financial market one, not economic."

Frank was dead on. Copper stabilized and within a week was moving up again, an up, and UP! In two months it traded as high as $1.46.

I suspect that is what we are going through here in silver. It is only a financial market raid to force out weak hand specs so the trade can cover before silver goes ballistic. The exact timing can be tricky, but once silver starts to roar back, look out above.

The silver open interest fell 2896 contracts to 117,005. Surely, a whole lot more of the funds ran for the hills today.

May silver waterfall:

http://futures.tradingcharts.com/chart/SV/54

There were some bounces in gold and silver, but only from extremely oversold levels. Gold touched $395.60 and silver was walloped to $6.80. On a daily basis there was no bounce at all. We should see more liquidation early tomorrow and then quite a snapback move up.

PRICE ACTION MAKES MARKET COMMENTARY. "The dollar strengthened and commodity markets were pummeled as US interest rate went higher," was the rallying cry of the market pundits..... But, what???

The CRB bounced off its 50-day moving average of 274.67 and closed HIGHER on the day at 278.89, up 1.47. As Greg Pickup noted, the CRB has bounced off its 50-day moving average 6 times since August (at times breaking it very briefly, but always popping right back). Soybeans SOARED to 1013, up a whopping 41 ½ cents. While the dollar was firmer in toto, the euro closed HIGHER at 119.46, up .23 and off a 118.48 low.

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The John Brimelow Report

India's unfortunate holiday; Japan buys

Wednesday, April 14, 2004

Unfortunately for the nerves of gold’s friends, India was essentially closed today for a major holiday (it is New Year in parts of the South). Since this is a festival which is actually observed by much of the population, unlike some others, retail buying patterns may actually have been influenced. In the immediate term, Bears elsewhere have been given that much more scope.

Nevertheless, the kinds of premiums observed over the past few days with gold around $420 are not consistent with a sustained slide. More likely, there will another churning but prompt recovery, such as has followed each of the three sudden sell-offs this year. For that matter the same followed sudden breaks in February and early October last years, when sudden blizzards of selling ended attempts (ultimately successful) to break through to multi-year highs.

One should remember that the $US target being attempted now is exceptionally important. As Australia’s The Privateer put it last weekend:

"On April 1, spot future Gold traded above the $US 430 level on an intraday basis for the first time this year, and the first time since 1991…Gold has already surpassed the top of its last bull market in February 1996. The bull market before that topped out in December 1987 at slightly above the $US 500 level, just below the top of the bull market before that set in Jan/Feb 1983. When Gold hit its $US 432.00 intraday high on April 1, it was getting uncomfortably close to its January 1990 intraday high of $US 436.70. Above that stood only the two $US 500 bull market peaks of 1982 and 1987…Gold has not closed above $US 440 since 1988. It has not closed above $US 515 since 1981."
(JB emphasis)

Of course, it is curious to find gold in abrupt reversal when 8-30 AM NY time brings a story like –

"NEW YORK, April 14 (Reuters) - Treasury yields climbed to their highest levels this year on Wednesday as a jump in U.S. inflation raised the risk of an early Federal Reserve rate hike…alarmingly for the bond market the core rate, excluding food and energy, rose 0.4 percent when analysts had looked for only a 0.2 percent gain. That took the annual rate to 1.6 percent from 1.2 percent and suggested the risks for inflation were now decidedly to the upside."

Those with gold market scars deeps enough to twinge at the Privateer account will also remember when gold used to go up on this kind of news.

Japan, showing gold market decisiveness not seen for many months, turned an active buyer today. Mitsui-London reports:

"The Tocom general public was a very good buyer of gold along with robust and widespread physical interest…"

Volume almost quadrupled - up by 270% to the equivalent of 58,923 Comex lots and more importantly open interest was up the equivalent of 4,870 Comex contracts, or 4.4% to equal 115,401 Comex. (NY yesterday was estimated to have traded 110,000 lots; open interest at 305,423 is almost triple TOCOM’s.) The active contract closed down 19 yen and world gold went out 50c below NY.

The sudden interest in gold on the part of the TOCOM futures operators is probably linked to the softening of the yen. This has much intensified since Japan’s close, so presumably TOCOM activity will continue. Physical buying is more likely to be a function of the lower price. This latter is probably what is influencing Shanghai, where local premiums over world gold have blown out to amongst the highest since I started recording them last July.

Some interest attaches to today’s open interest, available in a couple of hours. A large reduction would provide comfort to more conventionally minded bulls: the more normal pattern lately has been for a large part of these gold price slides to be associated with short- selling. Any such shorts will be forced out over the next few days by the Asian physical buyers.

JB

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BIG NEWS:

Rothschild has chaired the London Gold fix since it started in WW1!

14 Apr 2004 15:30

LONDON, April 14 (Reuters) - NM Rothschild & Sons Ltd., the London-based unit of investment bank Rothschild [ROT.UL], will withdraw from trading commodities, including gold, in London as it reviews its operations, it said on Wednesday.

The bank will stop offering commodities trading as well as sales activities in London, it said in a statement.

"As part of this decision, Rothschild will be withdrawing from the twice daily London Gold Fixing which it currently chairs," the bank said. "Discussions are being held with other members of the fixing to ensure an orderly handover of the chairmanship."

-END-

Why is Rothschild leaving the gold business at this time my colleagues and I conjectured today? Just a guess on my part, but suspect:

*Something is amiss. They know a big gold scandal is coming and they want no part of it.

*They know how the gold market has fallen prey to the derivatives traders and the physical market has lost its relative importance.

*That they believe the gold market is not stable anymore as the gold swaps/loans used to rig the price have about run their course – which means the gold market is going to blow up in the years to come.

*The days of making money on the short side via lucrative hedging programs for producers, etc., is over.

Dan Norcini sent this note which tends to make the point:

Zitat

"By the way, did you both notice how well gold had come back from the lows when it was smashed again at EXACTLY 11:00PM (CDT) when the physical market in London closed?"