[Blockierte Grafik: http://www.goldseek.com/news/LemetropoleCafe/lmpc.jpg]
http://www.lemetropolecafe.com
CARTEL CAPITULATION WATCH
But, there is no inflation! The CRB made a new high weekly close:
http://futures.tradingcharts.com/chart/RB/W
GATA’s Mike Bolser:
Hi Bill:
The DIVG's 200-day ma (yellow trace) has ticked up a bit from its linear phase and this is a bit unusual, although very early and smallish as an event. I'm biased towards, but not fully convinced that the gold cartel may be in some real trouble at this stage. On the other hand the cartel could just be playing cat and mouse with us by letting gold run a bit. The Weltke ECB admonishment only adds color to the gold drama.
[Blockierte Grafik: http://www.lemetropolecafe.com/img2004/DIVO040904.jpg]
[Blockierte Grafik: http://www.lemetropolecafe.com…DIVG200maSingle040904.jpg]
With regard to Frank Veneroso's pessimistic commodities views, I'm looking only at the DIVG and its 200-day ma and getting very good vibes. The cartel seems in a retreat that shows no sign of waning. However, it could change at any moment but that change would demand a huge, sustained multi-week drop in gold and I don't see it happening especially seeing the DIVO's 200-day ma.
Since the DIVO (Dollar index value of oil) is also adjusted for the dollar's variations it, like the DIVG, is a true look at the commodity. By going further to the DIVO's 200-day ma we can glean very important trend prediction insights.
As mentioned in prior commentaries at the café, the current bottoming phase in the DIVO seems to be over and oil thus seems headed higher. The red trace 100 day ma is turning noticeable up. Because of the huge $458 Billion cache of petroleum derivatives (Reported by the BIS) things simply CAN'T change quickly in the oil price trend without wrecking the bulk of those derivatives.
In order for the DIVO to fall from here, the dollar would have to rise substantially with oil steady at $34-$35 or oil would have to fall substantially with a steady dollar. Neither of these things appears likely, so the trend should be up or at least flat in the price of oil. This ignores the current explosive Middle East turmoil.
These two commodities alone, represent first order threats to the US financial system and they both are telling us that the threat is rising.
Mike
Chuck checks in:
Bill:
Good morning. Having thought over the current gold and silver situation and the proliferation of bears in the past couple of weeks, here are some thoughts.
First, what makes so many of them uncomfortable are two things: the strength of the dollar and the lethargic action of the shares. The more each of them confirms the move, the more we are seeing the bears since this does not fit their static scenario. Most of the move in the stocks came during the obvious time-when the dollar was weak. It became very obvious that one weekend when all of the currencies were at historic sentiment extremes against the buck. Since then the shares have traded more off the strength of the dollar than gold, but we are still way off the lows after seeing day after day of panic selling on the openings. Plus, we had all of that dumping at the beginning of the correction in December. That is why I felt impelled to write the article about the correction. Finally, as there was at the other minor correction points such as June 2002 and late last year, there has been no interest in the smaller exploration companies.
Most of these nouveau bears do not have in their script the possibility of gold rising against a backdrop of a strong dollar even though you have presented this point on many occasions. The bottom line is that most of the new gold bugs are not really convinced about the metal reaching unimaginable heights and worry more about a 10-20% correction than what will eventually happen on the upside. I think that this is to be expected at this early phase of the move. They also lose sight that gold is a contrary investment to all other respectable alternatives such as commodities, housing, and of course stocks. And we have not had that dramatic decline occur yet in those sectors. This is similar to 1973 when the market still held up. That is why I like Hoye because he views gold through a different prism, not a simplistic one like lines and "feelings and emotions."
What is astounding is that we are only $10 off a multi-year high and silver is at one. You would think that gold has violated all technical lines and support. Also, all the HUI needs is to get up to 241 and hold for the move in the shares to accelerate. There are times when the shares anticipate the metal, such as in December at the top and then the bottom, and then when the metal moves ahead without the shares in tandem. I believe that this is one of those times.
Given all of the potentially cataclysmic possibilities at this time in history, it is very difficult to foresee a real drop in the precious metals. We are still on an exponential pattern, and I believe that a break out through the $432 or so will not only surprise people but will be a real shocker.
I am confident that next week will commence some very unusual and unexpected action in the financial markets. Batten down the proverbial hatches.
Chuck
Houston's Dan Norcini:
Happy Easter weekend to you buddy.
I was checking to see if the commitment of traders was going to be released today with the holiday and was surprised to see it. So here's a bit of commentary on it if you want to stick it in somewhere in an upcoming Midas.
The Silver Commitments is pretty amazing. I was under the impression that the funds were driving the silver market since that is what is being regularly reported in the wire feed stories. Lo and Behold, this past week the long funds were actually getting out and reducing their long positions while the short funds were adding to theirs. It looks like some of them must have taken some money off the table when silver spiked 850 on Friday, April 2./[b]
[b]All in all we had total fund selling of some 4000+ silver contracts thru Tuesday.
What is more interesting is that in the last two weeks we have seen a reduction (not much - roughly 2500 contracts - but a reduction nonetheless) in the commercial short category. It appears that some in that category are throwing in the towel or at least beginning to lighten. It could very well be that the gig is coming to an end in there and the rats are thinking about abandoning ship. This could turn out to be an extremely important inflection point in silver. If the commercial perma-shorts begin to cover in quantity it will portend tremendous upside for silver. The question will then be, who will sell to them on the way up? Silver will have to run to a price that actually clears the market and where that price is, is anyone's guess.
Open interest still continues to rise in the Silver pit and any funds that were long and got out were replaced by small specs and new commercial longs. I personally would like to see the funds continue to add to their longs as that would betoken continued fund interest and commitment to silver. One of the indicators that copper was slowing its recent ascent was the reduction in the fund long positions in there. Apparantly, some of them decided that the copper rally had been so good to them that they had better take some money off the table. When they did, some of the would-be shorts who were looking for a short term advantage tagged the market pretty good and drove it back down for a brief, but hard correction. It has recovered considerably since then but has yet to better its yearly high. We will have to see if the same pattern develops in silver or if the investment demand for the metal is too strong to allow even a setback of any depth.
In regards to gold - really nothing to say except "Groundhog Day." Same ol', same ol'. The commercial category sold some 18,000 contracts this week including the commercial longs who sold off some positions and the cartel which continues to flaunt its elitist attitude that declares the gold market to be its own private sand box. The goons added 11,348 brand new shorts! Again, the bulk of the selling is due to this category. Apparantly some of the small specs are becoming born again Prechterites as they put on new shorts by a 2.5 : 1 ratio of shorts to longs. Still, in the general scheme of things their selling is neglible compared to the cartel. Once again we see the same thing we have seen for years now. Without the constant, never ending selling of the gold cabal, the gold price would have soared long ago.
I challenge any of the naysayers who continue their asinine denial of the facts by dismissing GATA and its supporters as a bunch of kooks and conspiracy nuts to state the reasons that the commercial short category continues to pile short upon short when the vast majority of the mining industry is moving or has moved to a "no-hedge" policy or at the bare minimum reducing the size of their hedge book. Let them declare the reason that the bullion bank cartel of Morgan, Goldman, et al, have for bona fide short hedges of this magnitude. The simple truth is that there is none. The only reason these by now "obscene" short positions continue to escalate is to slow the rise in the price of gold so as to avoid drawing the attention of the public and the excitement that would inevitably follow. Translation - it is for rigging the price of gold. That is the only reason and anyone who denies that is best ignored and relegated to the category of archaic and incompetent and forfeits the right to any credibility in regards to gold in my opinion.
Dan Norcini
dnorcini@earthlink.net
Down Under news:
Hi Bill
In the last couple of weeks, the federal ACCC (corporate watchdog) has done the following:
1. Fined a group of the biggest electricity contractors $35 million (a record in Oz) for price fixing to the tune of hundreds of millions of dollars in govt contracts
2. Announced that they have another 30-odd national cartels in their sights to be investigated over the coming months.
All this was able to be revealed because the ACCC cleverly provided an amnesty (or leniency) to the first company to come forward and cooperate with them. So it looks like there was an unsightly scramble of rats off sinking ships! And who knows how many more to come. I'm surprised that the ACCC has actually bitten, and not just bared its teeth, which is the usual style.
And it also underlines your frequently made point that cartels and conspiracies in fact seem to be the norm in our enlightened financial times, rather than the exception. It doesn't take long for Australian business to copy the trends elsewhere, whether it be price-fixing or massive executive greed.
best wishes and a good Easter to you
Tim
Bill:
In case you want to quote, here's the actual govt source (in which international cartels are also mentioned as targets):
http://www.accc.gov.au/content…mId/496100/fromItemId/142
and here's the story about it :
http://www.theage.com.au/artic…/03/15/1079199164792.html
Tim
One more country who is out of gold:
UAE sells remaining gold reserves for higher price
By Nadim Kawach
Bureau Chief
Abu Dhabi: The UAE has taken advantage of a surge in gold prices late last year to sell its remaining gold reserves, and experts described it as a wise investment measure.
The move nearly five months ago was the latest in a series of sales of gold reserves by the Central Bank as part of a strategy intended to diversify its investment portfolio, make more profits, and offset any decline in return from low interest rates.
The Central Bank's gold reserves were valued at as high as Dh666 million ($181.5 million) two years ago but were halved to Dh333 million ($90.7 million) at the end of 2002 before they were again slashed to Dh166.5 million ($45.4 million) last May.
Central Bank figures for December showed the remaining gold reserves have been sold but there was an increase of more than 10 per cent in its assets.
The sale of those reserves was timed with a sharp increase in gold prices, which climbed to nearly $425 per ounce at the end of last year from $257 at the end of 2001.
"It was a wise and clever investment move by the Central Bank because prices are now at one of their highest levels," Ihsan bu Hulaiga, Saudi econ-omist, told Gulf News.
Zitat
"As you know, gold no longer has an important economic value for any country because the trend now is that the central banks prefer diverse and sophisticated investment instruments, which could be more flexible than gold….what is important now is the economic performance of any country and its reserves of hard currency…."
-END-
The World Gold Council ought to be disbanded, period, after being branded as the most counter-productive industry organization in history.Even they are beginning to admit certain GATA criticisms of them were correct all along:
WGC To Axe More Senior Staff
http://www.mineweb.net/columns/london_beat/315131.htm
-END-
Should be some week coming up. Always keep in mind:
GATA BE IN IT TO WIN IT!
