Beiträge von osti99

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

    In contrast to their recent behavior the gold shares performed admirably this afternoon. The XAU rose 1.88 to 87.27, while the HUI gained 4.89 to 191.36. Golden Star Resources, which has been beat up lately by arbitrageurs over GSS’s bid for Iamgold, led the way, gaining 36 cents (8%) to $4.82.


    The HUI looks as if it is ready to break out to the upside from a defined pennant formation. A breach of the 195 area ought to do it, and should send this index to much higher levels.


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


    Just when you think the gold fundamentals can’t get better, they do. Then again, they have been at the "10+++" level for some time. Of course, as we saw today, in the very short-term they are meaningless, as are the technicals. All that matters is how much the strong physical market eats into whatever gold supply the heinous Gold Cartel can throw at us.


    In the short-term gold and silver could do anything. After this week, how can anyone use normal analysis to make any sort of reasoned prediction? Yet, with the overall financial market scene SO conducive to much higher gold prices and getting more that way each passing month, I can’t see both precious metals staying down here much longer. The cabal rats have backed themselves into a corner with less and less room to maneuver.


    Those with patience and an understanding of the big picture are going to make a fortune as the second half of this year rolls on. Gold, silver and the shares remain THE historic investment opportunity of a lifetime.


    GATA BE IN IT TO WIN IT!


    MIDAS

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

    To get a further grip on how flagrant the gold price rigging is these past weeks, note what Houston’s Dan Norcini had to say this early in the day:


    Hey Bill and Mike:
    Looks like our "friends" don't want gold over $400 do they?


    Same old modus operandi Cap it on the dollar down days and smash it on the dollar up days.


    Mike B's premise looks to be holding true. These guys are mounting a fierce assault at the DIVG level near the mid 340's.


    A bit of historical reference - The euro was at 1.23040 back on April 1 when gold was sitting at $430. The Euro is bumping right up against that same level this morning and gold is fully $30+ lower than it was back on April 1. If gold were trading in lockstep with the dollar it would be sitting at $425 or better this morning. That is how effective the price capping scheme has been. Gold in Euro terms looks absymal. It is trading near the same levels it was in January 2002. Think about that again. Europeans who had bought gold at that time due to concerns over geopolitical developments, et al., have made ZERO return on gold. Amazing.
    Best,
    Dan
    The gold open interest only rose 813 contracts to 220,064, while the silver open interest fell a whopping 5703 contracts to 83,430.


    Speaking of amazing. Here we have these incredible silver fundamentals and specs are very long. The big decrease was in the July contract. Word is one firm took delivery of about 4200 contracts which is roughly equivalent to the 21 million ounces which changed categories in the Comex warehouses this week.


    For the week:


    *the euro rose 1.68
    *the dollar fell 1.04
    *bonds rose 2 3/32


    *and gold - it fell $4.50 with every technical in the world going for it!


    Makes sense right? Fits in perfectly with how the pundits continually call the gold market right?


    As you can tell, time for a relaxing three day holiday for me.


    CARTEL CAPITULATION WATCH


    The DOW went into a plodding retreat early, down about 50, and then remained at that level all session long, closing at 10,282, down 51.


    The Sep euro closed at 123.09 and the dollar finished at 88.18.


    More on the pivotal jobs number:
    U.S. job growth slows to 112,000 in June By Rex Nutting
    WASHINGTON (CBS.MW) - Job growth in the United States slowed in June after three months of robust hiring, the Labor Department estimated Friday. Nonfarm payrolls rose by 112,000 in June, less than half the 244,000 expected by Wall Street economists surveyed by CBS MarketWatch. Employment fell by 11,000 in the manufacturing sector after four months of growth. The unemployment rate remained at 5.6 percent as expected. Average hourly wages rose by 2 cents to $15.65, a 0.1 percent increase, less than the 0.3 percent expected. Payroll growth in April and May was revised lower by a cumulative 37,000. The average workweek fell by two tenths of an hour to 33.6 hours. Total hours worked in the economy dropped 0.6 percent.


    The US factory number was disappointing also:


    :00 May Factory Orders reported -0.3% vs. consensus (0.7%)
    Prior reading was (1.7%). Ex-transportation, May orders +0.2%.


    GATA’s Mike Bolser:


    Hi Bill:
    The DOW failed to respond to a huge repo condition yesterday and it may have been due to the currency market focus of the Fed's primary dealers in and around the FOMC rate hike. Their main objective was likely to prop the dollar at all costs and BTW to hammer gold as well. The DOW perhaps was secondary.


    Today Friday July 2nd 2004, the Fed added $7.5 Billion in tomos and that action dropped the repo pool to $44.77 Billion during thin securities trading before the holiday. The DOW at this hour (11AM) is weak.


    A reader called yesterday to say the main financial battle today is one of propaganda vs. reality. Do you accept that the unbacked paper regime can be made infinite or do you accept that there are limits to its life?


    With the former, one continues to play by Wall Street's self-serving rules (For example, the anti-long COMEX commodities "rules"), slavishly follows their carefully constructed propaganda, builds even more debt, further reduces savings and places ever more portfolio weight on speculative paper-based ventures. In the latter belief mechanism, followers shed all debt, reduce exposure to paper speculation, obtain real, durable assets- especially precious metals and energy (Small natural gas debt-free firms). The weight of history is clearly on the side of those who move to real assets as inflation ravages the nation's paper wealth. expecting regulators to recognize inflation is naive.


    The monetary authorities will NEVER admit that inflation has arrived any more than a pedophile can admit their horrific crimes....they know what awaits them if they break down and tell the truth, asking for mercy. They must keep the paper-based propaganda supported game going at any cost, leafleting the world if necessary.


    Haiti's Baby Doc Duvallier used to drive through Port-au-Prince in his aging black Cadillac, throwing $50 bills from the trunk, later asserting that this act proved he was a "generous" benefactor to his people. Never mind that it was all a show for the cameras as Haiti's vast majority never saw a penny.


    On a far grander scale, Alan Greenspan and his minions issue their repos, collateralized debt obligations, government bonds and mortgage backed pieces of colored paper to a rapacious mob of Wall Street acolytes.


    It is a distinction with hardly a difference.
    Mike


    Stunning long-term Federal Reserve Note Versus Gold Chart:


    http://www.moneyfiles.org/goldvsfed.gif


    From The King Report:


    Our friend Paul notes than in Wednesday’s WSJ on page C-17 a Vickers analyst states insider selling has surged back to a mind-addling 20-1 to buying. Months ago the ratio hit 28 to 1. The Vickers analyst notes that during protracted insider selling trends, insiders run out of stock and must reload. The last time this reloading of intense selling occurred was September, 1987. "Let’s be careful out there."…


    Today is the employment report. As we wrote yesterday, a great number will have only an ephemeral effect. A soft number will contribute to the new economic ebbing perception. As we related, the data warrants a soft number, but political expediency has manufactured stronger than warranted numbers recently. However, now that the BLS’s CES Birth/Death Rate of small business has been exposed by us a very few others, the BLS is likely to look elsewhere to boost the number. We are stunned that after tracking, talking and writing about the Plug/Bias/now named the B/D Rate since Al Sindlinger put us onto it about a decade and a half ago, the investment world over the past two months has discovered it. Notable economists that have been forecasting, analyzing and waxing about the employment report for years did not know about it. Consider 2004 a historic year in economic and financial history – it is the year that a critical massive of market denizens realized and publicly admitted that government economic data is serious flawed. The inflation and employment numbers so egregiously diverged from reality that numerous people had the epiphany about government data deception.


    -END-


    Perhaps of interest:


    Bill Murphy of GATA speaks his mind that the place to be is in Gold and why the bad guys will not win.


    Bill Murphy, the Commander-In-Chief of The Gold Army; the Chairman of GATA (Gold Anti Trust Action Committee);


    For other live interviews, presentations and reports go to http://www.smartstox.com
    The Plunge Protection Team had some week last week holding up the US stock market. From Jesse:


    If you have had the feeling that you are trading against computer programs backed by the biggest pockets in the world generating the bulk of the trades on the NYSE, you might be right.


    Read the report as well as the press release. It’s interesting.


    NYSE Program Trading announced today for the period June 21-25 reached a record 70.5%.


    http://www.nyse.com/press/1088675982795.html


    Sure is a lot of trading for 'Agency'


    http://www.nyse.com/pdfs/pt070104.pdf
    Sure is a lot of trading for 'Agency'


    -END-


    Goldman Sachs dwarfs everyone else. Big surprise, eh!?!?


    Jesse goes on to note:


    Notice distribution of trades OFF the NYSE?


    Why would you do that if you are an NYSE member? Not enough liquidity on the NYSE? Or just keep the markets 'in synch?'


    I like the implications of Mr. Agency and the look that the broker/banks are taking the other side of his/its trades.


    More questions than answers but its an interesting report. The NYSE should be prepared to give some clarifications given the huge amount of trades being generated by Mr. Agency…..


    15 firms generated about 68% of NYSE volume as program trades and of those, about half were for themselves and half were for 'Agency'


    Who or what is Agency? Agency is cranking almost 30% of total NYSE volume.


    The Fed acts as an agent in the Custodial accounts, for example. Who do these bank/brokers represent as an Agent, or who is this Agent representing? More questions than answers, but a topic of importance no doubt given the huge impact on the markets.


    -END-

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

    July 2 - Gold $398.20 up $2.40 – Silver $5.99 up 6 cents


    See Spot Run!


    The class of those who have the ability to think their own thoughts is separated by an unbridgeable gulf from the class of those who cannot...Ludwig Von Mises


    GO GATA!!!!


    Today is one of those rare days when I wish I did not have to do a MIDAS commentary because all you are going to get is the same ole rehash about how corrupt and non-functional the US markets have become. They are nothing more than a combination of The Matrix and Stepford Wives with Wall Street and Washington coming up with market mantras and manipulations that have little to do with reality. Their basic mantra is PRICE ACTION MAKES MARKET COMMENTARY. The market managers hold down gold and prop up the DOW to facilitate investors' perceptions and influence their market making decisions, regardless of what the underlying, true fundamentals are.


    This morning’s jobs report was horrendous and confirms the recent sharp downturn in the US economic numbers:


    08:30 May non-farm payrolls revised to 235K from +248K; May unemployment rate unch. at 5.6%
    * * * * *
    08:30 June unemployment rate 5.6% vs. consensus 5.6%; non-farm payrolls +112K vs. consensus +250K
    * * * * *
    08:30 June average hourly earnings reported 0.1% vs. consensus 0.3%
    June average weekly hours reported 33.6 vs. consensus 33.8.
    * * * * *


    Once again we see increasing evidence the typical American consumer is squeezed. Inflation is going way up, jobs are hard to find and income is not keeping pace with inflation. It is more evidence the effects of the tax cuts and government economic stimulus are wearing off and the big picture, negative macroeconomic factors are beginning to kick in and take their toll on the American scene.


    What could be more bullish for gold than a weakening US economy and US dollar, along with increasing inflation while our interest rates are at historic lows? This increasingly negative interest rate scenario is screamingly gold bullish which is exactly why the Orwellians continue to cap the price. They don’t want an unsuspecting public to know the truth as a suppressed gold price takes away the alarm barometer from the average investor. "Look, no real problems," says the Working Group On Financial Markets, "see how tame gold is." The likes of the Larry Kudlows were yapping like that all morning.


    This routine has become so obvious it is now almost juvenile - at the See Spot Run level. Only the nitwit retards in the mainstream gold world fail to deal with this blatant manipulation farce.


    Just back from a breakfast at the Highland Park Pharmacy, a drug store with a 50’s type soda jerk counter, stools and all – with the old type waffle irons etc., a real throwback – cheap food and fast service – a real treat. Had to get out of here. Couldn’t stand the aggravation of watching our corrupt powers set the prices for the day. Besides, there was no point watching gold long after the opening because the price was not going to better the first half hour/hour opening high anyway – AND IT DIDN’T.


    OK, back to work. The bad news is the manipulation scenario I am reporting on IS this disgusting. The good news is the folks rigging the market have blown it so egregiously, gone so completely out of control, the prices of gold and silver are going to go berserk as their nefarious shenanigans go completely awry.


    For some time now MIDAS has been stating the economy is nowhere near as strong as the pundits claim and inflation is far worse. That is now becoming clear to many in the mainstream investment world, even with the puffed up numbers put out by the Bush Administration. Hiding the truth these days has become harder and harder to do. The Fed and the administration have backed themselves into a corner with their market manipulations and have run out of ways to maneuver. Inflation is real, but if they raise rates to combat inflation, an already fragile economy goes tapioca.


    The Bush Administration and the Fed are in deep trouble when it comes to dealing with our economy, thanks to the last 8 years of managing markets. What goes around, comes around.


    To give you an idea of how managed gold is at the moment, one only need look at a few charts.


    Just a few days ago, the concern was US interest rates were going to soar, the dollar to rally sharply and gold to be crushed. Supposedly, this was why gold cratered after breaching $400 on the upside on Monday. But, LOOK:


    Runaway September bonds
    http://futures.tradingcharts.com/chart/TR/94


    Swooning September dollar
    http://futures.tradingcharts.com/chart/US/94


    Soaring September euro
    http://futures.tradingcharts.com/chart/ED/94


    Bonds and the euro have surged to the upside and broken out sharply in that direction. The dollar has broken down hard out of a heavy congestion period, which is now a substantial top formation.


    Gold? Forget about it:


    Arrested August gold
    http://futures.tradingcharts.com/chart/GD/84


    Gold was not allowed to close above its 200-day moving average ($399.50 basis August) or $400, even though it blew through both points TWICE during the week.


    Even with all the outside markets going for it, the GOLD POLICE said Thou Shalt Not Pass Go! And that was that.


    For those who STILL think a weak dollar is the key to the gold price (can there be anyone left?), take a gander at what the dollar did early on today and compare it to the gold response. Gold rallied a piddly $2 and change on THIS:


    Can you imagine if the dollar had rallied that much how low gold would have plunged this morning?

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

    GATA’s Mike Bolser:


    Hi Bill:
    The Fed added $14.5 Billion in tomos (Temporary repurchase agreements) today July 1rst 2004, an action that caused the repo pool to fall a bit to $50.52 Billion. However, until the close today the repo pool will be over $65 Billion (Until the expirations are returned) so the DOW has a healthy dose of financial narcotics today. We'll have to see how it responds. The trend of increasing repo support for the DOW is in place and even rising a bit as reported yesterday.


    It bears reporting that there is no durable record of the Fed's daily issuances and expirations. Thus the data retained on my computer and on the computers of those followers who take the time to construct their own repo records are the only record of the repo pool. It would be delightful to go back before November 2002 but I don't have that data and can't get it. This condition satisfies an important feature of the government's interventional policy...if you can get the data easily, it's worthless.


    10AM Spikes and Deep Vees


    Yesterday brought yet another 10AM spike exactly at the PM Fix time of 10AM EST. From time to time we also see a reverse process yielding a "Deep Vee" dive to an exact PM Fix number. These acts seem to come when the cartel is having either an easy time (As it did yesterday) or a hard time when they must apply heavy selling pressure to meet their rendezvous with the PM Fix). In the past, GATA members conjectured that these odd movements were related to some kind of derivatives mandated level. We know for example, that JP Morgan stipulates that the PM Fix is the gold price to be used in their interest rate/gold swap derivative contract as I have the contract in my possession. These odd movements in and around the PM Fix remain a mystery.


    For now we must be satisfied that any durable explanation of the mechanism of government intervention must include an explanation of the Deep Vees and 10AM spikes in gold price actions. It's only a matter of time.
    Mike


    A SPECIAL ALERT issued by Mike this afternoon:


    Hi Bill:
    My previous June 29th alert was later modified to July 6th however the difference is hardly measurable in terms of being out of speculative positions for the time being.


    I am renewing my alert from now until further notice. It is best to step away from positions until the Fed's transition actions are more clearly known. We should have a better idea by mid-next week or at the latest by the end of the week.


    On the other hand, if one is preparing to invest in gold or silver, the coming days may prove to be an excellent opportunity.


    Ed Steer notes that the HUI appears to be under unusual pressure, doubtless from shorts who have "inside" information. In addition, with the DOW failing to rise today, even with $65 Billion in repos to assist it is yet another important marker of Fed stress. The standard Fed stress reaction is to always hammer gold.


    Silver continues to be a steal anywhere below $6 and the only sure way to gain leverage is to actually have both of the metals (Gold and Silver)...there is no Fed defense for that.
    Best,
    Mike


    Letter to the editor of the St. Louis Post Dispatch by Wistar Holt which complements some of my earlier sentiments:


    To the Editor:


    Smoke and Mirrors


    On Wednesday June 30, Alan Greenspan and the Federal Reserve raised the fed funds rate a mere ¼% to 1 ¼%. In your lead article on July 1, 2004, titled "Fed’s Rate Hike Signals Rebound in Economy" Alan Skrainka, chief market strategist at Edward Jones, proclaimed, "This is confirmation that the economy is rock solid….It’s unbelievable how good things are right now." Ironically, this is an eerie reminder of the widespread euphoria expressed by sell side brokerage firms in early 2000, just before the NASDAQ began a gut wrenching 86% decline.


    An economy is not "rock solid" if it faces the following problems:


    * A $500+ billion annual budget deficit
    * A $500+ billion annual current account deficit
    * A 25% decline in the U.S. dollar
    * Record debt levels in all segments of the economy including federal, state, local governments, corporations, and individuals
    * Extremely low savings rate among individuals
    * High levels of bankruptcies and foreclosures among individuals


    No, that scenario describes an economy that has been injected with the highest level of fiscal and monetary "steroids" in history in an effort to avoid the normal, painful contraction and unwinding necessary after an economy loses $7 trillion from the bursting of an equity bubble. If everything is so great, why did Greenspan only raise rates to 1 ¼% which is well below the rising inflation level, and light years below the 4% proclaimed neutral level? Why does Skrainka go on to say "Greenspan did not want to surprise the markets?" Once again, if everything is great, what is Greenspan worried about? Well, the answer is crystal clear. Greenspan is caught in a dilemma between raising rates enough to thwart inflationary pressures (building materials, food, energy, and healthcare) and raising them too much and popping the existing bubbles in stocks, bonds, real estate, and credit. There is no easy way out. Something will have to give and it will not be pretty.


    Wistar W. Holt
    Holt&Shapard Capital Management LLC
    Chase Park Plaza
    212 North Kingshighway Blvd. Suite 1027
    St. Louis, Mo. 63108
    314-367-6300
    http://www.holtshapard.com


    The pot calling the kettle, from the pitiful CFTC:


    CFTC: NRG Energy gave false information on gas trades (NRG) By Kate Gibson
    CHICAGO (CBS.MW) -- NRG Energy (NRG) gave false reports on the price of natural gas to an industry publication, according to a complaint filed in federal court Thursday by the U.S. Commodity Futures Trading Commission. The Minneapolis-based power company from August 2001 through May 2002 gave false price and volume information on hundreds of trades to Gas Daily, an affiliate of McGraw-Hill. "Today's complaint targets deceitful conduct that has the potential to harm our natural gas markets," said Gregory Mocek, director of the CFTC's enforcement division. The federal regulator's suit accuses NRG of violating the Commodity Exchange Act. NRG officials did not immediately return calls for comment. In afternoon trade, NRG stock was off 57 cents at $24.23.


    -END-


    Goldman Sachs in action:


    Goldman Sachs fined $2 million


    Wall Street firm settles charges that it violated IPO 'waiting period' regulations.
    July 1, 2004: 10:49 AM EDT


    NEW YORK (CNN/Money) - Goldman, Sachs & Co., the New York investment banking powerhouse, has been slapped with a $2 million fine for illegally offering institutional clients shares in certain initial public offerings, the Securities and Exchange Commission announced Thursday.


    Some thoughts on the HUI from Australia:


    Hi Bill
    Hope all is well. I thought I would share with you a few insights on the HUI, that I have noticed.


    I don't know how many of you follow candle sticks but I have been trained by one the best. A fellow American of yours from Chicago who trades on the floor, Daniel Gramza. Dan has a book out now that is definitely worth a read and apparently he pretty much pioneered the use of candles in the U.S, although this is rather anecdotal.


    Anyway I have been following the HUI of course and it is interesting to note the recent sell off that started earnestly in early April. If we look at this in 'weekly' charts and one definitely should be to get a feel for the power of a market anyway, we notice three lovely and 'scary' red candles that have virtually equal body lengths. This formation is known as 'Three Black Crows' in Japan, where these things were invented, as is a very powerful reversal signal in all Asian markets. The Japanese go short with haste when they encounter them . I have attached a few charts for your interest.


    However in Western markets exactly the opposite prevails. For myriad cultural reasons this formation is a 'trend continuation pattern' in the West. Dan tells me this pattern is quite powerful and confirms the previous trend in your markets and I have found the same in Australia. Liquidity is the key to any of these things but we have plenty with the HUI, so we can confidently forecast the break-out of the current 'pennant' formation will be back up. The pennant is a lovely text book formation at present and is nicely symmetrical with an upward bias, adding to the expectation of an upside break-out and confirming our 'Three Black Crows' formation.


    The sell off would have otherwise worried me and seeing those big red weekly candles could have but knowing they are Three Black Crows and what they imply for us, I sleep well at night with my U.S, Canadian and Australian gold shares.
    All the best.
    Marc
    marcjt@ozemail.com.au


    And then from the Netherlands’ Eric Hommelberg:


    Hi Bill,
    On May 14 I send you some notes regarding the HUI when it just reached a low of 163. I suggested then that a sharp upward correction could happen any time soon due to its extreme oversold condition (most oversold condition in 6 years time) and extreme bearish sentiment.


    Well, that was May 14. What happened next ? Did the HUI bottom out ? Did sentiment towards gold shares improve ?


    Although Gold is way above its low of $371 ($395) the Gold shares are still struggling in order to awake from their deep coma. Yes, the HUI seems to have bottomed out on 163 but still the performance of the HUI is far from impressive and certainly not reflecting a Gold price approaching $400. In December of last year when Gold exceeded the $400 mark ($404) the HUI had a rocket launch all the way up to 250. Last week when Gold hit the $405 mark all the HUI could manage was a lousy move to 197. What a difference. Bad sign ? Should we worry ? No ! In contrary, I think this could be the best buy opportunity of the entire year. Why ? Let me explain :


    What do you expect from gold shares in a rising Gold environment ?


    Well, gold shares will outperform the percentage gain in Gold due to their leverage right ? (big hedgers excluded). So in a long term uptrend in Gold, Gold shares will rise faster than Gold itself.


    Just look at the facts to prove this point. Gold rose by approximately 60% over the last three years while the HUI exceeded this gain by far with > 400%. So here it is, Gold/HUI ratio will decline over time in a rising Gold environment (HUI rising faster than Gold).


    By analyzing the Gold/HUI ratio one could argue that the Gold/HUI ratio is due for a sharp decline which could launch the HUI in a spectacular way !


    First take a look at the Gold/HUI chart below :


    So what do we see ?


    * Gold/HUI ratio declines over time since early 2001 as expected
    * Gold/HUI ratio only breached its 200 dma (since early 2001) on two previous occasions where it didn’t stay there for a long period of time (which is of course normal for any item in a long-term down trend)
    * Gold/HUI ratio is headed for a new low before year end (<1 ?)


    The latest countertrend rally seems to be topping out because it has hit the upper long-term downtrend line and breached its 200 dma which normally won’t last for a long period of time. Also the RSI hit an extreme high lately which points towards an accelerated decline of the Gold/HUI ratio as well.


    Conclusion : Gold/HUI ratio could accelerate to the downside which translates itself into a rapid increase for the HUI compared to the price of Gold !


    HUI prediction for year end ? Well, that’s almost impossible to say because a lot depends on the price of Gold. But if Mr. Jim Sinclair is right and we will see a Gold price of $480 before year end and the Gold/HUI ratio reaches a new low (<1.5) then a projection of HUI 400 is certainly not out of the question (POG $480 and Gold/HUI ratio 1.2, 480:1.2 = 400).
    Best,
    Eric


    Mahendra called from Nairobi, Kenya to say hello. He’s still on a roll, after advising his subscribers to buy crude oil this morning. Time to buy gold and silver on dips, according to this seer. He is looking for a good week coming up, but the real fireworks to kick in during August. Concerning the stock market, he sees 3 to 4 years of downside with at least one 500-point down day ahead.
    While the DOW was spared from taking a serious hit, the gold shares were sat on all day long and fell off as the day wore on. The XAU slipped .93 to 85.36 and the HUI sank 2.47 to 186.47


    GATA BE IN IT TO WIN IT!


    MIDAS

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

    CARTEL CAPITULATION WATCH
    While the price of gold was basically capped all session long, once again we see the Working Group On Financial Markets prevent a severe stock market hit. The DOW, down over 150 at one point, pulled ANOTHER Hail Mary rally late to finish off a modest 102 at 10,333. The DOG fell 32 to 2015.


    Bonds continued their rally, up another ½ point to 106 28/32, basis Sep. The dollar rose meekly to 89.08, up 8. The yen was firm, while the euro fell .20 to 121.58.


    Sarge noted early on today:


    Today was expected. The same big player who did half of the total volume of the DIAs on the buy side yesterday (i.e. pump the market up for the end of the month and quarter) has unloaded 300,000 shares at 9:40, 150,000 at 9:49, 200,000 at 9:57, 150,000 at 10:37, 350,000 at 11:12 and 175,000 more at 12:12. That’s 1,325,000 shares dumped by this one entity alone. He has yet to lose on a trade too. I have the prices he bought on the way up and the prices he is bailing at on the way down. This is a big Fall Street firm like JPM or GS or one of those that are tied to repo pool money. –END-


    The debate between US stock market bulls and bears this past year has been some tug of war. The bulls have pointed to sterling corporate profits and a strong US economy as reasons our market should advance. They have tended to concentrate on micro economic issues. The bears have focused on macro economic issues such as the monstrous US deficits, level of US consumer debt, geopolitical situation, etc.


    On balance the bulls have carried the day so far if one uses the price action of our stock market as the judge. However, the bull’s daylight appears to be turning into a creepy night. The economic data the past two weeks has turned for the worse and in fairly dramatic fashion. Why? Perhaps what was fueling the bull case has come to an end – that being historic low interest rates, the tax cuts and government stimulus related to the Iraq War.


    It appears it is time for the US to pay the piper. All day long reports come my way where inflation is kicking in, even as the economy begins to roll over. A couple of more examples:


    COLUMBIA, S.C., July 1 /PRNewswire-FirstCall/ -- South Carolina Electric &
    Gas Company (SCE&G), principal subsidiary of SCANA Corporation (NYSE: SCG), today filed an application with the Public Service Commission of South Carolina (PSC) requesting a 5.66 percent overall increase in retail electric base rates. – END-


    ConAgra has raised prices on retail foods


    CHICAGO, July 1 (Reuters) - ConAgra Foods Inc. on Thursday said it has raised prices on some of its retail brands to offset escalating commodity costs.


    Dennis O'Brien, president and chief operating officer for ConAgra's retail foods division, discussed the price increases during a telephone presentation to analysts about the company's fourth-quarter earnings report.


    "Like many other food manufacturers, we are facing higher costs across a wide range of raw materials, packaging and energy inputs," he said. "We have implemented price increases and will continue to evaluate appropriate actions where warranted."


    -END-


    Meanwhile, all 3 US economic reports this morning were WEAKER than expected:


    July 1 (Bloomberg) -- The number of U.S. workers filing new claims for jobless benefits unexpectedly rose last week to 351,000, a level economists said remains consistent with job growth.


    10:00 May Construction Spending reported 0.3% vs. consensus 0.7%
    Prior reading revised to 1.2% from 1.3%


    July 1 (Bloomberg) -- A gauge of U.S. manufacturing fell in June to a level that remains close to a 20-year high, an industry report showed.
    The Institute for Supply Management's factory index for June dropped to 61.1 from 62.8 in May. A reading greater than 50 signals expansion. The measure has exceeded 60 for eight straight months, the longest such stretch since July 1983-February 1984. The index reached 63.6 in January, the highest since December 1983. –END-


    The expectation for the ISM number was 61.5%.
    This news, out after the stock market close, was no good either:


    GM and Ford suffer sharp fall in June sales
    By Jeremy Grant in Chicago
    Published: July 1 2004 20:51


    Sales of General Motors and Ford vehicles fell sharply in June - despite persistent use of financing incentives - as Detroit's two biggest carmakers battled to fend off their Japanese rivals amid a strengthening US economy.


    Both carmakers also reported inventories at higher then expected levels, as well as a 5 per cent fall each in sales to retail customers, traditionally a more profitable market than rental fleets.


    "Quite simply, June was tough," said Paul Ballew, GM's director of market and industry analysis.


    The world's largest carmaker said June sales were down by 15 per cent compared to last year. Ford's were down 7.7 per cent, the 12th consecutive monthly fall in the last 14 months....


    -END-


    To put the US economic scene in further perspective we turn to The King Report sent out late last night:


    The King Report
    M. Ramsey King Securities, Inc.
    Thursday July 1, 2004 – Issue 2950 "Independent View of the News"


    A stunningly disturbing Chicago PMI trumped the Fed rate hike. The action in the markets yesterday suggested a change in economic perceptions. It could be the beginning of the end. The ugly Chicago PMI details: 56.4, 65 expected; employment fell to 53.6 from 54.8; production collapsed to 53.9 from 71.1; new orders collapsed to 56.8 from 74.4; prices paid jumped to 84.5 from 80.


    You can forget all the post mortems on the Fed decision and communiqué; the real talk in the money world yesterday was the astonishing collapse in the Chicago PMI. Dec Eurodollars, which, like other markets had priced in a 25bp rate hike, rallied 13 bps. The perception that the Fed must or will raise rates sharply by year end is changing. And that was the topic in the Eurodollar pit yesterday.


    Many professed surprise and concern about Fed dovishness. The reason for the Fed’s dovishness and the FOMC communiqué is emerging. But that does NOT excuse Easy Al for his malfeasance.


    For months we have been warning that: 1) the US economy would peak in April –May and 2) Easy Al’s boneheaded policy of keeping rates at emergency levels even though inflation has been increasing for the past few years has the Fed so behind the inflation curve that Easy Al would be raising rates as the economy was rolling over. And that’s precisely what is occurring.


    The Chicago PMI, as we keep noting, has been exhibiting more strength that any other index including the Fed’s Midwest survey. Yesterday the Chicago PMI crashed in the biggest drop since September 1974. 1974 was a seminal year in US economic history. Its recession was the worst since The Great Depression and marked the long-term trend of declining US real wages and US manufacturing and the ascent of Japan and Germany as manufacturing leaders. Japan is stagnant; Germany is in decline.


    When the PMI and other sentiment survey were showing strength not substantiated in hard data we kept averring that the headlines like ‘US manufacturing at 20-year’ were egregiously duplicitous. These surveys are opinions, not hard data, and the economists that were heralding the strength should know better. The June collapse is evidence that reality has returned to those being surveyed. Of course this is a collapse in sentiment, but the data is showing contraction also.


    Please recall that many months ago we noted that in Q3 when GDP soared to +8.3% US industrial production DECLINED. It wasn’t until Q4 and Q1 that US companies increased production and built up inventories. We stated then that this is what seeds a recession – businesses building inventory and registering tres jiggy sentiment readings AFTER a consumer binge. And that binge occurred on historically low interest rates, a tax rebate, accelerated depreciation biz benefits and war spending. Much of the stimulus has or is due to end. And the y/y comparisons that were so easy in April/May turn much tougher now. You don’t need complex econometric models or a staff of economists and statisticians if you think sans bias, ‘do the work’ and understand how the data is compiled and what it really represents.


    An intractabull economist from a major firm, who for months hyperventilated on PMI survey strength, yesterday demurred on CNBC that you shouldn’t heed the Chi PMI’s historic decline for June.


    -END-


    The Times’ Morgenson is very talented:


    As Greenspan Chases Inflation, Critics Shout, 'Faster!'


    By GRETCHEN MORGENSON


    Published: July 1, 2004


    http://www.nytimes.com/2004/07…3fab4&ei=5059&partner=AOL
    Europe and inflation:


    LONDON, July 1 (Reuters) - The September Bund future extended losses on Thursday and Euribor futures briefly dipped after the European Central Bank chief highlighted risks to inflation, reinforcing expectations of a rate hike by the end of the year.
    Following the ECB's decision to leave interest rates on hold at 2.00 percent, Jean-Claude Trichet said "looking ahead we remain confident that the recovery of economic activity will continue, the conditions for broadening and strengthing of recovery are in place."
    He also said the ECB needs to remain vigilant on inflation expectations and long-term inflation expectations remain relatively high.
    "Trichet is also saying that the risks to inflation are to the upside over the medium-term, which does jepordise rates being on hold for a while," said Andre de Silva, deputy head of bond strategy at HSBC.


    -END-

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

    July 1 - Gold $395.80 up $3 – Silver $5.93 up 15 cents


    US Market Scenario For Gold/Silver Extremely Friendly


    When future historians look back on our way of curing inflation they'll probably compare it to bloodletting in the Middle Ages... Lee Iacocca


    GO GATA!!!


    After the Fed announcement yesterday, gold jumped $2 to $2.50 higher in Access trading and generally held those gains going into the Comex bell. Once Comex opened, gold sold off in prerequisite fashion before moving back up in very choppy action. Gold made Mickey Mouse new highs several times during the day only to be held in check each time, unlike Tuesday’s downdraft when it fell as if in a waterfall


    Incredibly, the general public’s interest in gold remains abysmal,, even while the reasons to own gold continue to build and build. The Café Sentiment Indicator remains around a 3, which it has been hovering at for some time. New trials and daily site hits are way down.
    The most significant new bullish factor for gold is a biggie and centers around the quickly deteriorating US economy with simultaneously increasing inflation (see below).


    So much for the death of expensive crude oil. Crude has jumped sharply the past two sessions ($3.09 per barrel), closing today at $38.74, up $1.69). Heating oil is leading the way as reports are surfacing there could be a dramatic shortage due to very cold weather predictions this coming winter.


    We know all about the bad guys sitting on the gold price. We also know gold will not explode until these bums are beaten. Recent developments in the US suggest that day has come a lot closer. My guess is that when gold is going to make its big move up, it will do so very quickly and probably explode out of nowhere.


    The gold open interest fell 2522 contracts to 224,217. Specs were burnt on the move down from $430 and the ones who jumped back in on the breakout above $400 were burnt again. The Gold Cartel has them very leery of jumping in on the long side, which has been their objective all along.


    Silver has been frenetic of late, going on a tear above $6 and then tanking into the $570’s. One day it looks fabulous, the next day crummy. This weird up-and-down trading action suggests the end of the price correction is very close at hand. Net net, it has built a huge base below $6 which can support a price move to much higher levels. If 20 million ounces comes out of the Comex warehouses in the coming weeks, silver should fly.


    July silver
    http://futures.tradingcharts.com/chart/SV/74


    The silver open interest dropped 1088 contracts to 89,133.


    Morgan Stanley was once again the aggressive silver buyer and they also jumped on the buy gold side during the Comex trading session.


    Copper is holding up very well considering the reports of economic slowdown. July closed at $122.20. The death of the copper price rise, like oil, appears to be greatly exaggerated.


    The John Brimelow Report


    Thought about South Africa recently?


    Thursday, July 01, 2004


    Indian ex-duty premiums: AM $7.08, PM $6.51, with world gold at $394.25 and $395.50. Well above legal import level. India is an importer of gold in the mid $390s.


    Shanghai Gold Exchange premiums have also moved back into positive territory. Dubai premiums remain quite positive.


    TOCOM is going back to sleep. World gold went out unchanged from NY at $393, the active contract closed down 3 yen, aggregate volume dropped 67% to only equal 14,239 Comex lots, and open interest was essentially unchanged (+375 Comex).


    Yesterday of course, ranks amongst the finest examples of ‘tape painting’ or market grooming seen in gold for a long time. As ScotiaMocatta grumpily notes:


    "The metal made a number of attempts to break 396.50 but dealer offering kept a lid on it. Gold then went quiet and remained in a narrow range until the last thirty minutes of trading when fund selling emerged. The fund offering forced locals to give up on their long positions causing the metal to go into a steady slide. "


    The same was true of silver. What seems to have irritated the dealers, several of whom note the violence of the quarter-end selling (estimated volume jumped 31% in the last tenth of the trading day) is that prices immediately rallied in the after market.


    ABARE, the permanently gold-bearish Australian Government agency charged with monitoring mineral price trends, has produced a negative comment on Chinese gold demand, arguing that rising domestic mine production will accommodate increased demand for the foreseeable future. They fail entirely to address the key (and genuinely puzzling) question of why Chinese gold demand has been so stagnant over the last decade, despite huge real income growth per capita. During this time, Chinese adornment demand has revolutionized the platinum market, and India has validated the classic Venerosian "wealth effect" concept for gold. This is a very real question.


    However, at least they mention China. Unmentioned recently has been the progress the South African government is making in strangling the gold mining industry there, and choking off any new projects. The strength of the rand (at a two-year high today) demonstrates that the country is being run for the benefit of the (often foreign) rentier or carry-trade operator, rather than the local real economy, which is in fact faltering. Ironically, this is something which never happened under Apartheid. The consequences for any foreign trade-exposed local producers is catastrophic.


    Today came news that the SA authorities are blithely proceeding to demand that all new projects accommodate majority black ownership. Reuters says the Deputy Mining Minister, appropriately named Lulu,


    "dismissed concerns that the new rules would dampen foreign investment in the sector. "This has not happened. We have foreign companies coming into the country who are very interested in investing in the sector," she said."


    This is actually very important. It means that the largest gold producer in the word, which is also the place where the most obvious exploration elephants continue to be (although this has been unmentionable for 30 years), is going out of business.


    Anyone who doubts this should consider Zimbabwe.


    If economics were not enough, the SA government, facing a situation where the propertied classes are facing a holocaust of crime, is responding by reducing the ability of individuals to protect their families: see


    http://www.wnd.com/news/article.asp?ARTICLE_ID=39139


    The remarks in


    http://www.vdare.com/misc/rushton_iq.htm


    and


    http://www.vdare.com/misc/rushton_african_iq.htm


    are conclusive.


    I AM OUT OF INTERNET CONTACT UNTIL THE 10TH.


    JB

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

    Bill,
    After reading Jim Sinclair’s "The Attack of the Rotten Tomatoes," I emailed him this morning and told him the following:


    Dear Jim,
    Congratulations in your effort toward a free market in gold and silver. In response to your suggested 5% position in physical gold, my reaction is that it is WAY TOO LOW!
    Personally, I have 95% of my net liquid assets (personal and IRA) in gold and silver equities, bullion, and numismatics.
    As a registered investment advisor, our clients are weighted 70% among 7 large mining companies (U.S., Canada, and S. Africa) with the remaining 30% split among a bearish equity fund and a bearish dollar fund.
    Regards,
    Wistar W. Holt
    Holt & Shapard Capital Management, LLC
    212 N. Kingshighway Blvd. Suite 1027
    St. Louis, MO 63108
    (314)367-6300 / (877)367-6300
    http://www.holtshapard.com/


    Here's that Fed gold hater again:


    Bill,
    I found this quote from a former Federal Reserve Governor on the MSNBC website and I thought that you would find it interesting. Why should he care what the price of gold is?
    Best regards,
    Bill


    Hike by how much?


    What does the Fed do today and what should it do? Simple, it raises rates by a quarter-point today and tries to prolong the expectation it will continue to raise rates in a measured way. But it should raise rates by half a point, said former Federal Reserve governor Wayne Angell.


    “I would much prefer for them to do 50 basis points now and then announce that they will need to wait six months to find out the impact of 50 basis points today,” Angell told CNBC’s “Wake Up Call.” It'll be tough to measure the effect of “a diddling 25 basis points” rise, but a 50 basis point rise would help the price of gold back down and contain inflation, he said.


    -END-


    What the financial world was waiting for:


    June 30 (Bloomberg) -- Federal Reserve policy makers raised the U.S. benchmark interest rate by a quarter-point to 1.25 percent and said further increases can come at a ``measured'' pace. The Fed promised to respond as needed to any changes in ``economic prospects.'' –END-


    The Fed announcement was on the less hawkish side and somewhat dollar bearish. Now, you know why The Gold Cartel slammed gold the past two days. They didn’t want it to be in technical position to vault way above $400. The crooks doing the price managing knew what the Fed was going to do and say, therefore, they acted in advance and accordingly. If gold were flying above $400 and rocketed higher tomorrow from say $406, critics would say the sharply rising gold price above $400 is an indicator the Fed was too soft and too far behind the curve. Can it be any more clear what the Orwellians have done and why?


    This is truly a drag, yet one we have to live with to make the big bucks as this year goes on. Patience will pay off. The powers in New York and Washington have lied so much about the economy, in their reports and about managing markets, they have put themselves in a box. The Fed is in the same box. They know combating the real inflation in the US could crush our economy, which is more fragile than they have let on and recent economic reports have revealed; therefore, they are going to wimp by and hope for the best. The negative interest rate scenario will worsen, not improve. This can only be dollar bearish and gold bullish.


    The Fed revealed itself today to be an emperor with no clothes. It shouldn’t be too long before the financial world comes to that conclusion. The bad guys are running out of ways to maneuver. The physical gold and silver markets are strong and they will get stronger as the year goes on. The Gold Cartel continues to huff and puff. In the not too distant future they will turn into impotent windbags and our day will come. The Fed’s decision this afternoon makes that "day" more likely to come sooner rather than later.


    The XAU closed up 1.71 at 86.29 and the HUI gained 3.58 to 189.94. Both near their highs of the day. Perhaps the future is now?


    GATA BE IN IT TO WIN IT!


    MIDAS

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

    GATA’s Mike Bolser:


    Hi Bill:
    The Federal Reserve added $4.5 Billion in repos today June 30th 2004. This open market action moved the repo pool up over $50 Billion to $51.77 Billion, a very high value and sure to ram the DOW higher with the primary dealers buying DOW futures in order to implement the Fed's "monetary policy". As a "National Security Index" the DOW cannot be allowed to fall any more than gold can be allowed to rise as interest rates are being raised (At least at the start of the rate climb).


    Applying more pressure to prop the DOW


    Closely examine the repo chart and you will see that the formerly linear repo pool moving average (red) is now curving further upwards ever-so-slightly. This small detail tells us that the Fed is getting a bit nervous that the DOW isn't responding fast enough to make the Fed mandated rendezvous with 11,750 (Its previous high) on Labor Day 2004. So they are adding to the repo pool in increments sufficient to turn the ma up.


    For those new to the cafe, there is a correlation between the overall size of the unexpired repurchase agreement pool issued by the Federal Reserve and the 30-day moving average of the DOW. The actually mechanism is the purchase of DOW futures by the Fed's primary dealers who take their repos and present them as collateral for cash and then enter the open market to carry out the Fed's monetary policy wishes while they "make money". The best example of this is the "Iraq War Rally" which was in truth only the Fed pouring repos both temporary and permanent into a depressed DOW.


    COMEX Scorched Earth


    Few believe the "error" in Friday's COT report was really an error. Luring more speculators into the gold pits as the report did, cannot be viewed without deep suspicion that CFTC managers knew beforehand that a hammer was coming on gold and purposely issued a bogus, wildly bullish report in order to trap gold long speculators (Thus carrying out the Fed's anti-gold "monetary policy"). Would they really do such a thing?


    If the situation were bad enough, in my opinion, they certainly would. Indeed, IF the gold cartel had sufficient tonnages of gold and silver to sell, they would not NEED to resort to such risky in-the-open COMEX trickery.


    This event, small as it is, serves to support my radical conjecture that authorities will default the COMEX AND the LBMA gold and silver markets at the moment when their remaining gold and/or silver stocks fall to criticality or when a sufficiently large entity enters the market on the long side. Such a default will trap COMEX longs while the rest of the world's gold prices rocket higher. The G-10, of course, will simultaneously install a fixed gold price with thousands of effective metal detectors to monitor and apply tariffs to import/export gold and silver activity. However, in all price control regimes there will be profound scarcity at the official level and huge premiums offered on the internal black market.


    The security of having personal custody of one's investment and the likely future leverage from these premiums makes physical metal a very attractive thing these days.


    Jim Sinclair is now arm-waving for physical gold as I (Along with Richard Russell and many others) have been doing for well over a year. Moreover, now may be the best time to add to your positions. By the 10th of July the time may well have passed and one must then wait for another opportunity.


    Make no mistake, the Fed is in a death struggle, gold war retreat and is acting frustrated with this latest metallic tantrum.
    Mike


    But, there is no inflation:


    Reuters
    General Mills Earnings Up, Headwinds Seen
    Wednesday June 30, 9:14 am ET


    CHICAGO (Reuters) - General Mills Inc. (NYSE:GIS - News) on Wednesday said quarterly earnings rose 24 percent, as an additional week of sales offset higher ingredient costs and weakness from the popularity of low-carbohydrate diets.


    The maker of Progresso soups and Wheaties cereal trimmed its profit growth outlook through fiscal 2006, warning that earnings in the next fiscal year would be hurt by the rising costs of energy, fats, oils, dairy and other commodities, as well as increases in health care and restricted stock expenses.


    "To offset those headwinds, our plan includes stronger levels of product innovation, companywide productivity and cost-savings initiatives, and selected price increases that are necessary due to the increases in our input costs," said Chairman and Chief Executive Steve Sanger in a statement.


    The Minneapolis-based company, which earlier this month raised wholesale prices in several food categories to help offset rising costs, also raised its quarterly dividend by 13 percent…


    -END-


    This guy should be canned from the futures industry, not have the opportunity for a new role:


    Good morning Bill
    The following appears in today's London edition of the FT and may, or may not, be of interest to you, or you may have the news already, but in case you haven't here goes:


    CFTC CHIEF IN RUNNING FOR NYMEX POST


    The board of the New York Mercantile Exchange (Nymex) has voted in favour of making an offer to James Newsome to replace Bo Collins, outgoing president.


    Nymex, the world's biggest energy futures exchange, has yet to announce the decision of Mr Newsome, chairman of the Commodity Futures Trading Commission, the US futures industry regulator.


    Nachamah Jacobovits, a Nymex spokeswoman, said the exchange had yet to conclude its search for a new president. Mr Collins' contract expires today.


    "Newsome is an excellent candidate" said one person close to Nymex. "He is a very open regulator, he listens to all sides and has a great understanding of the market"


    As Mr Newsome's job at the CFTC is a political appointment he must inform President George W. Bush in person of his intentions before an announcement.


    Mr Newsome was due to address a conference in London yesterday but was replaced at the last minute by Sharon Brown-Hruska, a fellow CFTC commissioner.
    -END-


    The article goes on to talk about a likely salary package, Parthenon Capital trying to acquire a majority stake in Nymex and the CBOT's interest in Nymex.
    All the best
    Ian

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

    The John Brimelow Report


    Thanks, India; No thanks to CFTC


    Wednesday, June 30, 2004


    Indian ex duty premiums: AM $7.43, PM $5.83, with world gold at $392.20 and $394.40. Lavish, and ample for legal imports. Notwithstanding the season, the world’s largest gold importer is clearly an active buyer in the low $390s.


    According to both Mitsui and Mitsubishi, who ought to be in a position to know, the Japanese public was a strong buyer today on TOCOM, with gold opening 20 yen lower. This is not entirely clear from the trading data. Volume did jump 67% to the equivalent of 32,927 Comex lots, but open interest fell 1,767 Comex equivalent to equal 102,563 Comex contracts. The active contract closed down 16 yen; world gold was 5c higher than the NY close. Possibly foreign traders were closing shorts on TOCOM. (NY yesterday traded 63,650 lots with open interest dropping 3,234 to 226,773 contracts.)


    Yesterday, as Mitsui-Sydney puts it,


    "Gold was absolutely thumped over night, if it was teamed up with the currencies, it was the worst performer…sub $395 Fund selling was seen"


    A thought echoed by HSBC


    "..a 1c move in the euro is usually consistent with a USD3/oz move in the gold price – the sharper move lower in gold being attributable to technically-orientated fund selling."


    UBS was probably right in suggesting this morning:


    "The market feels short as speculators are looking for more…"


    More fund selling has been noted today. Being the quarter end militates against a sharp recovery too.


    Nevertheless, the response of the physical market in the low $390s, as anticipated, suggest the several technically-oriented observers calling for further falls will be frustrated.


    There remains the curious CFTC saga. HSBC summarises:


    "According to the revisions, the total net long speculative position at the close of trading last Tuesday was 7.1Moz, up from 5.7Moz the previous week. Clearly this is less bullish than the previous data, which showed a fall in the net long position to 5.4Moz due to a sharp increase in non-reportable short positions (now revised away). However, even at this level the net long position is still relatively low for the current gold price, suggesting further upside potential for gold if the currency markets move in bullion’s favour."


    As anyone who has run large futures pools will ruefully attest, the CFTC is an extremely energetic and meticulous supervisor. These unprecedented errors (in silver and copper also) were pointed out to them on Friday afternoon (by the admittedly unwelcome source Ted Butler, nemesis of the silver bears). At least a cautionary could have been put out on Monday. As it was, US futures operators were trading an important breakout with data which was significantly too bullish.


    No wonder retreat/ambush stratagem was so successful!


    JB


    CARTEL CAPITULATION WATCH


    The DOW closed at 10,435, up 22 and the DOG gained 13 to 2047. This means over the last two days, bonds closed sharply higher, the US stock market nicely higher, the euro closed higher, yet gold and silver were bagged, even though gold had just blown through its 200-day moving average to the upside. What a joke!


    Aside from the strange and better than expected consumer confidence number, most all the other economic numbers over the past few days have been very much on the weak side, including this one:


    10:00 Chicago Purchasing Manager's index reported 56.4 vs. consensus 65
    May reading was 68.


    From Jesse on the CPM:


    Look at the attached chart. See any Trends?


    June Chicago PMI 56.4 (-11.6 pts)


    Key Factors


    * Powerful 11.6 pt plunge follows two month rise of 10.4 points to May's 16 year high.
    * Chicago index is volatile. Trend levels remain strong as does the manufacturing sector.
    * Both new orders and production fell from levels in the low 70s to mid 50s. May new orders were at a multi-decade high.
    * Employment edged lower but stands at a moderate 53.6.
    * Prices paid on inputs rose to a still higher 84.5. Output pricing has shown a decided turn higher


    -END-


    Higher interest rates could set off a derivatives bomb in Freddy Mac land:


    REUTERS Freddie Mac 2003 Profit Falls 52 Percent


    WASHINGTON (Reuters) - U.S. mortgage finance provider Freddie Mac, struggling to straighten out its books and its reputation after an accounting scandal, on Wednesday reported its 2003 profit fell 52 percent.


    Freddie Mac earned $4.9 billion, or $6.79 per share, down from $10.1 billion, or $14.18 per share, in 2002. Analysts polled by Reuters Estimates were expecting a 2003 profit of $5.90 per share, with estimates ranging from $5.70 to $6.56 per
    share….


    -END-


    This disappointing Freddy Mac report follows on the heels of the disappointment at Washington Mutual.

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

    June 30 - Gold $392.80 up 70 cents – Silver $5.78 down 7 cents


    What A Farce! The Cabal Is Beyond Contempt!


    Mental toughness is many things. It is humility because it behooves all of us to remember that simplicity is the sign of greatness and meekness is the sign of true strength. Mental toughness is spartanism with qualities of sacrifice, self-denial, dedication. It is fearlessness, and it is love...Vince Lombardi


    GO GATA!!!!


    Gold surged right after the bell, rallying close to $5 and that was it for the day as its highs were made within the first hour – as usual. This has become truly nauseating. But, not nauseating enough for the arrogant Orwellians, which slammed gold and silver in the last half hour and going into the Fed announcement.


    One only need to look at the action of the other financial markets to realize what a farce The Gold Cartel and Working Group on Financial Markets have made of the bullion market. Yesterday, the inane pundits commented that gold collapsed because of fears of sharply higher interest rates in the future. These fears were supposedly exacerbated by the latest consumer confidence number. Yet, ??? The bond market rallied over a half a point on that news and before today’s Fed announcement it rallied almost a full point.


    The euro was clobbered for a full point yesterday, yet it made most of those gains back today and was up .85 going into the Fed announcement. Gold??? It was held in check, well below $400 and by day’s end was back near yesterday’s battered close, which is exactly what The Gold Cartel had in mind. That there could still be even one halfwit out there who doesn’t see how rigged the gold market is confounds me and is beyond my comprehension.


    There are many smart market observers that continue to make the mistake that gold is only about the dollar. Horse Manure! If that were the case, gold would not have been punished today going into the so-called important Fed announcement.


    Yes, a weakening dollar is very gold supportive, however, it is a distant second in terms of what determines the gold price. The key to the gold market is the physical market overpowering the crooks who continue to do all they can to keep the price artificially low to suit their own needs. Until The Gold Cartel is beaten, gold won’t take out $430 and won’t explode. The good news is that could come at any time.


    I would like to thank The Gold Cartel for making yesterday’s MIDAS commentary look good and for making their recent manipulation so blatant. The more they are found out, the quicker this nonsense will end.


    Two comments from the last MIDAS stick in my craw:


    1. There are three basic reasons to continue to hammer home the details of the gold price manipulation scheme:


    *This is what the gold market is all about. The rest of the gold goings-on are of a secondary nature and a lot of noise.
    2. "What is good for the goose is not good for the gander. Gold went up $8 on Thursday and was sent right back down. Gold went down $8+ today. Will it go right back up $8+? Not a chance!"


    ***


    Today’s mauling of gold and silver late in the day, while the euro maintained its strength was a perfect example of The Gold Cartel in action. And gold certainly did not have "a chance" of gaining its losses back today, even though that was not the case with the euro. The early big gold pop surprised me. Unfortunately, I felt the creeps would never let it stand on a day like this and they didn’t.


    Note the divergence between the euro and gold the past two days:


    September euro
    http://futures.tradingcharts.com/chart/EC/94


    August gold
    http://futures.tradingcharts.com/chart/GD/84


    The euro closed up 111 at 121.77 (more than it lost yesterday) and the dollar closed down .70 at 89 (more than it gained yesterday).


    Moore Capital, the huge New York hedge fund closely allied to The Gold Cartel, was a late seller on the Comex.


    The mistake I made was working the last two days. Mahendra said they would be lousy ones for gold. He nailed it.


    The gold open interest fell 3234 contracts to 226,773.


    To give you an idea of how blatant the late day gold price manipulation was this afternoon, one only need look at the trading volume numbers provided by John Brimelow. Going into the last half hour of trading, the volume was 29,000. During the last half hour it increased to 38,000, or a 31% jump in volume in last 1/10th of the trading day. All that to make sure gold was trashed going into the Fed meeting.


    The silver open interest fell 2375 contracts to 90,221.


    Silver dropped 20 cents out of nowhere in the last half hour for no apparent reason. It seems the cabal can jerk silver around at will. Yet the jig could be up VERY soon.


    BELLS AND WHISTLES TIME; perhaps my silver hunch mentioned yesterday will be correct?
    21,354,738 ounces of silver in the Comex warehouses were switched from the eligible category into the registered category. Here is a heads-up on that score:


    Bill,
    A massive inter-category move in the COMEX warehouse silver stocks today.


    A total of 21,354,738oz, equivalent to 4,269 contracts worth has been transferred from the Eligible (not for sale) to the Registered (for sale) category.


    Note that the NET change in the total stock is virtually zero, this is only an adjustment. It has the effect of increasing the Registered category to 65,605,073oz (13,121 contracts equivalent) which is a rise of 48.23% over yesterday. The effect on the Eligible category is that it falls to 52,764,168oz (10,553 contracts equivalent) which is a contraction of 28.81%. The percentage is lower because there was more metal in the Eligible category to start with.


    What does it all mean? Could it be that the move from 'Not For Sale' to 'For Sale' means that it has been sold and therefore it must be delivered?


    Might it leave the warehouses totally? If it did, what would be the effect of a drawdown of over 20m oz?


    Well for starters, there'd be less than 100m oz left which is less than 20,000 contracts.


    The next few days should be interesting...
    Regards,
    Tim Leleux (aka The Priest)
    North Yorkshire, England


    Something’s up, that is for sure Tim. I suspect this silver will be shipped out in the coming weeks, perhaps to China? Some serious silver fireworks could be right around the corner!


    The CRB broke below its 200-day moving average and then reversed to close above it at 265.94, down another 1.35.

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

    Gold has its $6 Rule and a predominance of making its highs for the day during the first hour of trading. The S&P has its "volume bomb." Aren’t our free markets in the US wonderful!?!?


    More dissection of US economic numbers you won’t hear from Wall Street, from The King Report:


    The worse than expected GDP is still not comprehended fully by most operators and investors. The details of the GDP report debunk all the hoopla and hype over booming corporate profits. First the ostensible good news: "Profits, adjusted for capital depreciation and changes in the value of inventories, rose to $1.23 trillion last quarter." But now for reality: "Profits before tax with inventory valuation adjustment is the best available measure of industry profits because estimates of the capital consumption adjustment by industry do not exist. This measure reflects the depreciation-accounting practices used for federal income tax returns. According to this measure, domestic profits of financial corporations increased, and domestic profits of nonfinancial corporations decreased. Decreases in profits of nonfinancial corporations were widespread among major industry groups with the largest occurring in manufacturing and in wholesale trade; only retail trade increased." Financial engineering once again


    "Profits before tax decreased $25.4 billion in the first quarter, in contrast to an increase of $92.2


    billion in the fourth. The before-tax measure of profits does not reflect, as does profits from current production, the capital consumption and inventory valuation adjustments." In other words ex-inflation of inventories, profits declined in Q1.


    More bad news about where much of the GDP growth was derived: "Real federal government consumption expenditures and gross investment increased 8.5 percent in the first quarter, compared with an increase of 0.7 percent in the fourth. National defense increased 13.2percent, compared with an increase of 3.0 percent."


    And here’s the reason why the US government switched calculation of US economic strength from GNP to GDP in 1988, when the US transformed form the world’s largest creditor to the world’s largest debtor: "Real gross national product -- the goods and services produced by the labor and property supplied


    by U.S. residents -- increased 3.4 percent in the first quarter, compared with an increase of 5.5 percent in the fourth. GNP includes, and GDP excludes, net receipts of income from the rest of the world, which decreased $13.2 billion in the first quarter after increasing $36.4 billion in the fourth; in the first quarter, receipts decreased $0.6 billion, and payments increased $12.6 billion."


    National income grew 1.775% in Q1; personal income grew 1.5%. Disposable income in chained dollars (2000 basis) increased only 1.2%. Is this booming economic growth? http://www.bea.doc.gov/bea/newsrelarchive/2004/gdp104f.htm


    -END-


    The warnings continue:


    Bank warns of hedge funds threat
    By Philip Thornton Economics Correspondent - 28 June 2004


    A flood of speculative cash into hedge funds run by "less-experienced" managers has raised the risk of a sudden correction that could trigger instability in financial markets and push the world back into recession, the Bank of England warns today.


    The Bank says investors have taken on increasingly risky positions to maximise their profits in an otherwise low-yield environment of falling interest rates and volatile share markets.


    The Bank is also concerned that British banks have relaxed their lending criteria as interest rates fell and the housing market boomed, leaving themselves exposed to a surge in arrears as households struggled to pay off their record debt burden.


    In its biannual review of financial stability, the Bank warns that large moves in interest rates and sharp falls in asset prices could force investors who have taken out large positions without hedging their risk to unwind their positions in a hurry.


    source:
    http://news.independent.co.uk/…ws/story.jsp?story=535680


    -END-


    China Overtakes U.S. As Investment Target


    By LAURENCE FROST, AP Business Writer


    PARIS - China overtook the United States as a recipient of foreign direct investment in 2003 as companies broadened their strategies in emerging markets, according to a report published Monday.


    The Organization for Economic Cooperation and Development said the United States was the worst hit by falling inflows of foreign direct investment to its 30 industrialized member countries.


    Investment into the United States declined to $40 billion last year from $72 billion in 2002 and $167 billion in 2001, while foreign direct investment in China dipped only slightly to $53 billion from $55 billion — leaving China as the world's biggest recipient of investment, excluding tax haven Luxembourg.


    The OECD report on foreign investment trends said total investment flows from its members to developing countries surged six-fold to $192 billion in 2003 from $32 billion the previous year.


    -END-


    On the Comex warehouse stocks:


    Bill,
    Looks like the Thursday/Friday lack of update was a false alarm.


    There was a massive delivery of gold on Thursday (1915 contracts worth) which more than made up for the drawdown earlier in the week.


    On the silver side things continue to change in our (the bulls) favour. Although the net drawdown over the last 14 weeks is only 1000 contracts worth which equated to about 4%, it has come entirely from the registered (for sale) category. Since I have been monitoring (every day since March 17th this year) there has been a one way flow out of the registered category.


    Note this - when I started monitoring there were just over 10,500 contracts worth in the for sale category, now there are just under 9,000 contracts worth which is a decline of 14% in as many weeks! Week in, week out the amount of silver available for sale drops by 100 contracts worth. At a straight line rate, this will be gone within 2 years but if it picks up as more goes out then who knows what will happen.
    Regards,
    Tim Leleux (aka The Priest)
    North Yorkshire, England


    Mahendra continues his roll, telling his followers to exit gold and silver investments on Friday and head for the beach for a week. He also said this week would be a lousy one for soybeans. They went limit down today.


    Hedging news:


    Monday, June 28, 2004


    http://www.drd.co.za/
    Johannesburg, South Africa -- Durban Roodepoort Deep Ltd. is pleased to announce that it will be closing out its only remaining hedge contract in line with its policy of not hedging gold production.


    The hedge is a "gold for electricity" contract with Eskom, the South African power utility, and was largely closed out in early 2004. The remaining 135,000 ounces of gold hedged under the contract covers the period January 2005 to September 2005 and DRD expects that it will be closed out by next week.


    DRD Chief Executive Officer Ian Murray said: "We have been keen to close out this remaining hedge contract and the current low Rand gold price has presented an ideal opportunity to achieve this. DRD will now provide shareholders with even more direct exposure to the gold price." ….


    -END-


    Franklin Sanders has a terrific 89 page document out that should interest silver investors. It is titled:


    Why Silver Will
    Outperform Gold 400%
    And
    The Professional Trading Secrets
    That Will Make the Most
    Of Your Silver And Gold Investments


    The list price is $199, however, Café members can get a copy of it for $49, plus postage. To order one call 888-218-9226. Visa and Master Card accepted.


    Franklin Sanders can be contacted at:


    The Moneychanger
    PO Box 178
    Westpoint, TN 38486
    phone: (888)218-9226
    fax: (931)766-1128
    email: moneychanger@compuserve.com
    website: http://www.the-moneychanger.com


    The gold shares struggle to advance and retreat easily on any kind of opportunity. The sentiment remains horrendous. The XAU sank 2.43 to 86.11 and the HUI lost 4.20 to 190.10, putting in an outside day reversal to the downside.


    The odds of gold and silver taking off early this week have to be as low as they get with the Iraq turnover and Fed interest rate move coming up. The Orwellians consider gold moving higher a NO NO at times like these.


    Today was a classic example of the "Reverse Gold Barometer Effect." Gold was firm due to strong physical demand. The euro took off, US interest rates shot up due to increasing inflation concerns, therefore, gold had to be taken down. The Orwellians again.


    This continued egregious gold and silver price manipulation is infuriating. Yet, as aggravating as it is, those who understand what is coming in the months ahead and invest accordingly are going to clean up. Patience is in order.


    GATA BE IN IT TO WIN IT!


    MIDAS

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

    CARTEL CAPITULATION WATCH


    Wal-Mart announced disappointing retail sales news and GM reported disappointing car sale news. The combo deflated an early rally inspired by the Iraq turnover. The DOW fell 15 to 10,357 and the DOG slipped 6 to 2020. As usual, just as the US stock market looked like it would really kick in on the downside and pull quite the reversal, it suddenly stopped and drifted back up.
    Yet, the worst economic news of the day came after the bell:


    Washington Mutual Warns of Rate Pains


    By TSC Staff
    6/28/2004 4:56 PM EDT


    Washington Mutual (WM:NYSE - commentary - research) warned late Monday that rising interest-rate expectations are punishing its key mortgage-lending business.


    The big thrift slashed 2004 earnings guidance, citing falling mortgage-loan volumes and slimming lending margins. WaMu, as it is known, said a cost-cutting plan it rolled out late last year has yet to fully take effect, and that mortgage income is being squeezed by costly hedging programs that aim to reduce the effect of a rate rise.


    The company said it expects interest rates to rise faster than it can cut costs and otherwise prepare for a tougher lending environment.


    "It now appears to us that the shift in the interest rate environment in recent months, with a sharp increase in long-term rates and a related reduction in mortgage volumes, will continue through the rest of the year. The effects of these changes are likely to outpace the timing of ongoing cost reduction plans in our Mortgage Banking business," said CEO Kerry Killinger.


    The company also pointed to problems in its hedging program.


    "Our risk management approach does not attempt to fully hedge the effects of changes in basis spreads," said Tom Casey, Executive Vice President and Chief Financial Officer. "While basis spreads vary over time around a historical mean, a significant widening or tightening of basis spreads in any one quarter can affect net income. Our hedging results benefit when spreads are wider, as they were in the fourth quarter of 2003 and the first quarter of 2004, and will be negatively affected as spreads tighten, as they have in the second quarter of this year."
    -END-


    The dollar closed down .21 to 89.01 and euro rose .29 to 121.70. So much for gold trading with the dollar.


    08:30 May Personal Income reported 0.6% vs. consensus 0.5%; Spending 1% vs. consensus 0.8%
    Prior Income report unrevised at 0.6%; Spending revised to 0.2% from 0.3%. PCE deflator y/o/y reported 2.5% vs. consensus 2.2%.


    June 28 (Bloomberg) -- The benchmark 10-year U.S. Treasury note had its biggest drop since May 7 after a measure of inflation matched its largest rise in almost 14 years….
    Demand for government debt weakened after the Commerce Department said its personal consumption expenditures index surged 0.5 percent, matching the largest rise since September 1990. The index, which is used by the Fed in its semiannual forecasts, is up 2.5 percent since May 2003. Personal spending rose 1 percent in May, after increasing 0.2 percent in April. Incomes gained 0.6 percent for a second month.


    -END-


    GATA’s Mike Bolser:


    Hi Bill:
    A thoughtful reader (Shawn) corrected an omission on Friday's repo pool total and with today's open market operations, the corrected pool total now stands at $43.02 Billion since the Fed added $5.75 Billion in temporary repos today, June 28th 2004. All the trends are in place and the DOWs's 30-day ma green line 30-day ma has curled upwards nicely. Today the DOW is up about 80 points at this hour (11AM).


    Gold has turned up recently along with the DIVG. This seems to challenge the wisdom of Refco who cautioned distance from the gold pits until the Fed settles its FOMC decision.


    I'm happy to see the price rising although we still may see a surprise.


    The latest phase of government intervention has taken about 30 days and this figure matches the 30-40 day transition from the three cycle brute force defense set up at DIVG=323 beginning in December 2002. Recall that 323 was the level defended when the dollar and euro were last at parity. That defense failed and gave way to a linear retreat upward until June 4th 2004 when we experienced the full force of the latest Fed counterattack. It is the transitions that sandwich the linear phase that are similar in duration and general character. we are approaching the 30-40 day transition end this week July 6th through the 10th and we should be wary of what may happen when the Fed takes us to its next phase.


    At this stage it seems unlikely to me that the Fed will ever be able to hold a fixed DIVG level and therefore must settle for a rising (More precisely, retreating) monetary strategy, while it searches for more gold to sell. IF this is to be the Fed tactic then we will receive periodic ambushes.


    A useful analogy is one of an aircraft running low on fuel. The pilot can opt to stay at a specific altitude and exhaust his fuel at that altitude, or he may choose to set up a reduced fuel burn rate and hence accept a glide path downward. The pilot following the latter logic would necessarily want to extend his range by choosing the optimum burn rate and glide angle in order to give himself the best opportunity to reach a safe landing place.


    The crucial difference between the aircraft analogy and the Fed's gold policy is that for the Federal Reserve, there are no safe landing areas...only a delayed realization that an inescapable "crater date" exists in the future. On that date the monetary world will change forever and the acolytes of the Fed will face what Bill Bonner has correctly called a day of "Reckoning".


    It is very important to begin thinking in terms of the DIVG and not in terms of the dollar price of gold. This is, after all, the valuation method used by the central bankers.
    Mike


    More on 990N:


    Subject: A guy named "bulldog" posted this today on a forum re: 990N


    I was the person who went to the floor of the Mercantile Exchange on a fact finding mission. Having studied the S&P price action in every conceivable fashion, I wanted to find out why movement on the S&P had changed so much over the last 18 months. I (and others at a large hedge fund) first noticed a significant change in the trading patterns around July of 2002. After a month, the patterns returned to normal, as the market promptly went back down. Then around September 23rd (a fed meeting), we immediately noticed the trading anomalies returned, as the market promptly went back up. This is what we observed:


    1. Dow 50 declines in a hour


    Irrespective of the selling pressure, the Dow would not decline much more than 50 points during any one trading hour. Once it was down that much, volume of the futures would plummet (as if program trading restrictions had been triggered). (BTW; if you look in Barron's, you will notice that all domestic investment banks have now shut their program trading operations down. I wonder why they would shut down a huge profit center? Now, the largest index arbitrage operation is now ABN Ambro.) Then, after an hour, volume & price movement would pick up again as if the collar had been lifted. So, initially we thought that the Fed & NYSE had altered the program trading collars.


    2. Overnight futures


    In previous years, the overnight futures action was almost always wrong. Or, at the very least, the overnight price action would return to even (close the gap). Now we have so many unfilled gaps that I have lost count. However, current trading is more like someone is trying to obtain a price goal with the least numbers of futures contracts. So, bid the price up overnight, and maintain the price by sitting on the bid. There is no intraday ebb and flow whatsoever.


    3. Managing the price


    Once the price has been thrown up, the price level is maintained by sitting on the bid. At other times, the price is collared by putting a huge number of bids and asks on the screen. This discourages one from getting long or short. Often these orders are pulled unfilled. However, they are an effective deterrent from entering the market one way or another. Since when is most of the price on the S&P determined overnight? Any decline that is allowed to happen from these bid levels all but impossible to trade. If you short, the "inevitable" surge back to those levels is lightening quick as all the shorts cover.


    4. Jam jobs


    All of this leads to the number one anomaly. The massive surges in volume we have labeled "jam jobs." Due to the lack of volatility and predictability in the S&P, the futures volume has slowed to a trickle. Thus, it has become easier and easier to maintain the price (and makes the manipulation all the more transparent). No one will short anymore for fear of the "jam jobs." This occurs when, out of the blue, when trading is slow, someone drops market order for thousands and thousands of eminis. (we call it a "volume bomb." It's a testament to how raw, and obvious, the manipulation is that we have a label for the routine. If you were actually trading the S&P, you would too. In fact, we find it very much like the movie Groundhog Day, every day the same tricks are used.) In the span of under 5 minutes, the price action will move (up, never down) several points.


    The net effect of all this, is that shorting is impossible. Perhaps all of this does sound nutty, but if you are trading the S&P, you are dealing with this every single day. Rather than lazily dismissing something offhand, I encourage anyone to contact somebody who trades the S&P eminis (preferably on Globex). Then, ask them about the price action and the counterparty 990N.


    5. Proof of price manipulation


    The best proof of price manipulation is the price movement. We haven't had a 2% down day on the S&P in 278 trading days. Look at the change in the statistics of downside volatility:


    -1.00% -2.00% -3.00% Price % Decline
    Trading
    Days
    2004 121 11 - -
    2003 250 58 13 3
    7-12 03 122 17 1 0
    1-6 03 128 41 12 3
    2002 251 86 33 10
    2001 248 67 16 4
    2000 252 73 25 7
    1999 252 67 15 1
    1998 252 62 15 4
    1997 252 61 11 2


    2004 100.00% 9.1% 0.0% 0.0% % of Days
    7-12 03 100.00% 13.9% 0.8% 0.0%
    1-6 03 100.00% 32.0% 9.4% 2.3%
    2003 100.00% 23.2% 5.2% 1.2%
    2002 100.00% 34.3% 13.1% 4.0%
    2001 100.00% 27.0% 6.5% 1.6%
    2000 100.00% 29.0% 9.9% 2.8%
    1999 100.00% 26.6% 6.0% 0.4%
    1998 100.00% 24.6% 6.0% 1.6%
    1997 100.00% 24.2% 4.4% 0.8%


    Moreover, over the past 18 months we have had a slew of historic upside movements. Twice in the last 18 months, we have had 8 straight up days in the futures. (And up 7/8 days once.) This has not occurred once in the last eight years (other than the two mentioned). During one run, we were up 24 of 27 trading days, which occurs about once a decade since 1940. In May, the futures were up 12 of 14 days, which occurs about once every 5 years.


    -END-

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

    The John Brimelow Report


    Interesting CFTC & FX data: Strange from BIS


    Monday, June 28, 2004


    Indian ex-duty premiums: AM $3.60, PM $1.46, with world gold at $401.60 and $404. Below, and well below, legal import point. India is clearly not an importer at present.


    Shanghai Gold Exchange prices are also well below world gold, although volume seems to have picked up. A weekend report from the Gulf, however, suggest kilo bar there was still at an appreciable premium.


    Although Japanese futures traders are said to be mildly interested in gold’s recent firmness, this is hardly discernable from the trading statistics. Volume slipped 25% to equal only 25,230 Comex lots, the active contract closed unchanged and world gold stood 35c below the NY close at the end. Open interest was static (up 89 Comex lots). (NY on Friday traded 31,408 lots: open interest rose modestly, by 1,240 contracts.)


    The CFTC data, released on Friday afternoon, has stimulated unusual interest. For one thing the rise in the gold price was not associated with a sizable net spec long increase. UBS says:


    "Net long positions increased by only 50koz to 7.86Million ounces, which is entirely consistent with the very small changes in Comex Open Interest seen during the week. Yet gold rallied $6/oz, clearly indicating that there was some other buying around. Our best guess would be OTC fund buying although a producer buy-back or even a large purchase from a central bank is possible (if somewhat unlikely)."


    For some reason, they do not mention the obvious possibility: heavy Middle Eastern off take (although it will be remembered that gold in mid-June got low enough for India and reportedly the Far East to do some buying also).


    Another perspective on this is that, since the option and futures spec net long on April 6 (of 701 tonnes!) there has been 450 tonnes of liquidation and gold is only $20 lower. Once again, the identity of the buyer here is an interesting question.


    Prospector Asset Management’s Leonard Kaplan, who lays heavy emphasis on the sociology of CFTC data, has a usefully different view:


    "In an event VERY RARELY seen in this market, large speculative concerns were the major buyers …accommodated by the most unlikely segment of the marketplace, the small short speculator. …it must be interpreted that the large increase in the position of the small short spec must be considered as a most bullish signal… small speculators who seem to never get it right. And, in fact, so far they have not as gold has rallied some $7 from the close of the reporting period."


    "…I must believe that, overall, the changes in ownership of contracts MUST be considered bullish…now we are some $7 higher, and certainly the nature of the market has changed. Since we sit at higher prices, I would devalue the bullishness of these statistics, but will still be forced to conclude that there is still considerable room for this market to go higher... I would imagine that a market move above the $407/$408 level would be enough to force the small shorts out of the market."


    (Small specs sold short 13,500 contracts June 15-22)


    Since last Tuesday, of course, further rises in gold have been associated with a sizable increase in open interest, suggesting that technically driven CFTC traders are starting to be involved. Who the resolute seller is not discussed: that there is one can be inferred from Refco Research’s cautious decision


    "Sell 4 $385 August gold puts @ mkt. Risk futures close under $390."


    Which is of course a bet that gold will not go down, rather than it will go up.


    Turning to Macro-economic matters, Reuters this morning carried a striking report:


    BIS-Asian c. banks could accumulate more reserves


    "BASEL, Switzerland, June 28 (Reuters) - An economic adviser to the Bank for International Settlements said on Monday Asian central banks could continue to accumulate currency reserves…" Clearly what happens is that reserves that have been built up in Asia are accumulating at an unprecedented degree…" BIS economic adviser Bill White said in a press conference. " …What we would worry about I suppose...is… they might generate in their own economies worries either about inflation or asset price bubbles and kinds of misalignment," ."


    "In the 18 months to March 2004, Asian reserve holdings rose by $780 billion to $2.156 trillion, an increase of almost 57 percent."
    (JB emphasis)


    Thoughts which arise from this amazing story are:


    1. Obviously, reserve accumulation at this staggering pace has to reflect huge undervaluation of the Asian currencies involved.


    2. Why are not "we" concerned about what this is doing to the competing industries in the Trade partner nations?
    3. What kind of quid quo pros have been arrived at between the various Central Banks and Governments involved to sustain this historically unprecedented situation?


    With this perspective, Reg Howe’s latest discussion of the renewed mysterious build up in Gold Derivatives of major banks, as reported to the BIS, becomes, even more than usual, mandatory reading for serious students of gold. Howe advances the interesting view that the equally strange build up of silver derivative exposure might be China’s contribution to this witches’ brew. See


    http://www.goldensextant.com/commentary28.html#anchor368619


    JB

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

    June 28 - Gold $400.60 down $1.50 – Silver $5.88 down 22 cents


    Gold Has Its $6 Rule, The S&P Its "Volume Bomb"


    People are always blaming their circumstances for what they are. I don't believe in circumstances. The people who get on in this world are the people who get up and look for the circumstances they want, and, if they can't find them, make them. ...George Bernard Shaw, "Mrs. Warren's Profession" (1893) act II


    The tedium of the modus operandi of The Gold Cartel drags on. When I awoke, gold was 50 cents higher and the euro was .30 lower with the dollar generally higher. Economic news surfaced at 8:30 EDT showing US consumer spending outpacing consumer income by a fair amount. The dollar weakened with the euro taking off. Gold shot up, climbing almost $3 on the session.


    Goldman Sachs had stopped gold at the $402 to $403 area on the surge on Thursday and made sure bullion did not exceed that level on Friday. Today’s sudden pop, after a surge of physical and spec buying, forced Goldman to call in their cavalry to take gold down after the London PM Fix, which came in at $404.25.


    Once again, we see gold making its highs for the day in the US during the first hour and then clobbered after the physical market buying was priced for the day on the PM Fix. The percentage of times gold does so on the Comex defies the laws of probability in relation to how other markets trade. As usual, you will find no one in the establishment gold world asking why this keeps happening. It’s just par for the course when it comes to the bullion dealer crowd. Their credibility as far as analysis goes is poor and waning.


    Assisting in the waning direction is Reg Howe’s latest superb piece, a must read for all those who want to get a true handle on what is going on in the gold and silver markets. You can find it here:


    http://www.goldensextant.com/


    June 28, 2004 (RHH). Hard Money Markets: Climbing a Chinese Wall of Worry


    ***


    There are some points in Reg’s discourse of particular interest which are brought to your attention below with my comments following:


    "On May 14, 2004, the Bank for International Settlements released its regular semi-annual report on the OTC derivatives of major banks and dealers in the G-10 countries for the period ending December 31, 2003 (http://www.bis.org/publ/otc_hy0405.htm). The total notional value of all gold derivatives rose to $344 billion from $304 billion as of June 30, 2003. Translated into estimated tonnes, these figures are shown in the chart below by Mike Bolser, together with the breakdown between forwards and swaps ($154 billion versus $134 billion at June 30) and options ($190 billion versus $169 billion at June 30) as reported in table 22A of the June issue of the BIS Quarterly Review (http://www.bis.org/press/p040614.htm)."


    This is a clear cut example why the mainstream gold world has lost its credibility as to their explanations of the gold market. GFMS and their surrogates fully acknowledge the gold producers lifted their hedges dramatically the last half of last year. They also have said for years the gold derivatives positions are mostly tied to the activity of the gold producers. Yet, when confronted with the fact that the gold derivatives leaped $40 billion worth in the last half of 2003 (13%), with gold producer hedging dropping dramatically, they say nothing! They arrogantly refuse to acknowledge the reality there is a clandestine operation out there to keep the gold price from rising.


    "Also shown in tonnes are the gold derivatives held by U.S. commercial banks as reported through March 31, 2004, by the Office of the Comptroller of the Currency (http://www.occ.treas.gov/deriv/deriv.htm). Held almost entirely by J.P. Morgan Chase, HSBC Bank USA and Citibank (see second chart below), the total notional value of these gold derivatives has held fairly steady at around $80 billion for the past three quarters while HSBC has moved solidly into the number two position behind JPM and ahead of Citi."


    JP Morgan Chase fired its two senior gold analysts a couple of years ago now and has not replaced them as far as I know. Why haven’t their gold derivatives positions on their books collapsed by now with gold producers, such as Barrick Gold aggressively buying back their hedges?


    "As explained in Gold Derivatives: Moving towards Checkmate (12/04/2002), updated in Not Your Father's Gold Market (6/15/2003), a pretty good proxy for the total net short physical position in gold is the total notional value of forwards and swaps as reported by the BIS and converted into tonnes, which as of year-end stood at 12,687 tonnes according to Mike's calculation, an amount equal to almost half of total official gold reserves as reported by the International Monetary Fund."


    Mike’s 12,867 short position fits perfectly with the work of Reg Howe, Frank Veneroso and James Turk that the total amount gold left in the central banks is less than half of the 32,000 tonne figure normally bandied about. This short position does not include Switzerland’s sale of 1,600 tonnes of gold, England’s sale of 400 tonnes, Portugal's sales this past year, etc., nor does it include gold derivatives outside of the G-10 central banks.


    "As discussed in Targeting the Gold Cabal with Silver Bullets (2/17/2004), any effort to support the dollar by suppressing gold prices would also seem to require a parallel suppression of silver prices. With its own reasons for wanting a strong dollar, China had an obvious motive for mobilizing its silver stocks to assist in the scheme, and all the evidence suggests that its role became increasingly vital with each annual decline in other world inventories. A more interesting question, however, is presented by the data indicating that the Chinese have supplied large quantities of physical metal through leasing or swaps rather than outright sales."


    Without using Reg’s sophisticated analysis, it has been my oft-stated opinion for 5 ½ years now that the silver price was suppressed for just the reason Reg states. You couldn’t suppress the gold price and have silver at $10 an ounce. While GATA has the goods on The Gold Cartel on gold, it was always a mystery how they were doing the same in silver.


    However, it seems to me we have an intriguing development coming VERY soon in silver. Earlier this year MIDAS reported the Chinese had tied up 75% of the 2005 silver supply via a complex derivatives operation. There were also reports of Chinese buying of silver as well as selling by other Chinese. I also reported that buying silver in size was near impossible and that we might get a squeeze in March, or even May. That call looked pretty good until April. Silver soared to $8.46, then collapsed.


    Without dealing with the collapse at the moment, it seems to me we are coming to a moment of truth again for the silver shorts. There is smoke surfacing again about the Chinese on the buy side. It is very conceivable the Chinese lent out their silver for various reasons. It also tells me they have to know all about the precious metals price suppression scheme just as the Russians acknowledged at the LBMA conference in Moscow in early June. With the Russians letting the gold world know they understand what has occurred, it won’t be long before the investment world realizes what has happened – and that more than half of the central bank gold is not there anymore and that the world’s major silver supplies have just about been exhausted.


    The Chinese, being the ones who probably have held down the silver price, must realize what is going to happen when their silver supply dries up, since the market is in such a deficit. There is no additional supply to meet this supply/demand deficit.


    There is a very good chance the Chinese will turn buyers in the weeks and months to come. What do the shorts do if the Chinese ask for their leased silver back on top of any buying they might do? What is going to happen next year with 75% of the world’s silver supply is already tied up?


    The potential for silver to explode from these levels, really explode, is very high.


    The silver move higher during the first quarter was the first indication of what is to come. For whatever reason, the timing was just not right. What was not right then, could be very right in the third quarter.


    Comex is the last bastion, or source, of major silver supply in the world. If those stocks begin to steadily drop in the weeks and months ahead, get ready for $14 to $20 silver within the next year!


    The gold open interest rose 1240 contracts to 232,909, while the silver open interest rose 882 contracts to 91,979.


    Silver was the tip off today that gold would not hold its early gains. With gold still up $2.50, silver went negative and led the way down.


    The gold weekly suggests gold should be bought on breaks:


    http://futures.tradingcharts.com/chart/GD/W

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

    Chuck checks in:


    I think that today is very positive considering the size of the jump yesterday, that it is a Friday and that the dollar is up. Obviously, there has been a shift in direction and that the metals and shares are washed out. The eerie quiet indicates to me that buyers will have to pay up for any new positions and size.


    Whatever is decided next week by the Fed will merely be an excuse for gold to move up. The rest of the year should be very good and dynamic for the Midas people. Unless they are sold out. Chuck


    Dan Norcini’s take on the COT Report:


    Hi Bill:
    Couple of quick comments in regards to the commitments data.


    The Commitments of Traders is really old news this week since the major development that occurred yesterday, namely gold taking out $400 on a closing basis as well as the important moving average levels that my recent essay detailed, is not reflected in this release since it is only covers through Tuesday of this week. What occurred yesterday is far more significant from a technical standpoint than what occured through Tuesday.


    As a matter of fact, open interest could very well have bottomed this week judging from the huge increase that occured during yesterday's session in which over 11,000 new positions were put on. With major technical resistance levels crumbling in yesterday's rally, funds who were short were covering and new fund longs were piling on. That no doubt leaves the bulk of the new sellers as our "friends" the cartel.


    The fund short category skedaddled as expected since gold violated the 10 and 20 day moving average levels Thursday of last week (June 17) which was their initial signal to lighten up on the short end. That was also an initial signal for the long funds to add on. Yesterdays violation of the 100 day and 200 day moving averages was another signal.


    Commercials continue to liquidate both longs and shorts. Again, we should see the commercial short category increase in next week's release since Goldman was capping the action this week and no doubt are representative of the cartel in that capacity since any other entitites that firm might represent would be trading from a technical perspective which has now turned decidedly bullish.


    As I was reading across the report, I was mentally adding in my mind the number of net buys that took place for each category for a quick initial impression:


    funds - 10,782


    commercials - 2,667


    There was net buying in both the large spec category and the commercial category.


    My first thought was, "who in the heck did they buy from? Who was selling this thing? Tell me it is not the specs." Unfortunately for them - that is the only category left. These small specs have no doubt been drinking the purple Kool-Aid of the Prechterites and rest of the near perma-bear gold advisors. The poor dupes sold a whopping 13,449 contracts since last Tuesday's release when gold made a low of $383 that day before finally closing at $388.70. All I can say is "OUCH". Talk about selling the bottom in quantity. Gold rallied a bit more than $20 off of the low since then handing these guys some very hefty losses ($2,000 per contract if they sold the bottom at $383 and then got out at yesterday's high). I do not expect to see them back for some time when they will no doubt be buying the top this time around.


    I can tell you that I receive plenty of emails from this camp out there with their gloom and doom scenario for gold and how the gold price is going to collapse all the way to $325, etc. My response is the same to all of them. I tell them that I hope that they are short and putting their money where their mouth is. I guess these are the guys who are now buying it all back and hopefully learning a few things in the process.


    Now we wait to see how the financial alchemists will attempt to turn paper into gold next week at the FOMC meeting for the next clue as to where we will go from here.


    One thing is certain, barring some out of nowhere interest rate increase greater than 25 basis points, the technical posture of the gold market has changed with the two successive closes over $400 and the major moving averages. Funds will now be looking to buy dips.
    Dan Norcini
    dnorcini@earthlink.net


    Gold enemy NUMBER ONE speaks out:


    WASHINGTON, June 24 (Reuters) - Financial markets are underestimating the extent of the threat posed by U.S. fiscal and current account deficits, former Treasury Secretary Robert Rubin said on Thursday.


    "We are facing a horrendously serious problem," Rubin, who served as Treasury chief under Bill Clinton from 1995 to 1999, told a conference run by the bipartisan Concord Coalition.


    "I think that the probability is high, though not certain, that at some point the kinds of deficits we see will have very serious effects on our markets and our economy."


    The U.S. current deficit hit a record high in the first quarter of 2004 at 5.1 percent of the size of the U.S. economy. The budget shortfall is expected to top $400 billion this year, surpassing a record $374 billion in 2003.


    Many economists associate large, long-term deficits with low levels of private investment, high interest rates and weak economic growth. In April, the International Monetary Fund cited the U.S. budget and current account deficits as a risk to strong global growth.


    Still, Rubin said bond markets were largely complacent about future U.S. deficit dangers.


    "Markets have a tendency not to worry about what's not pretty much in front of them," he said.


    "This has no timing one can predict. It has no way to quantify it. It doesn't fit into the model people use for forecasts. For all those reasons, people tend to pay much less attention to it than is warranted."


    Treasury Secretary John Snow has said that, while the budget deficit is too large, the Bush administration's plan to cut it in half over five years would restore it "to a level below the 30-year average in terms of the size of our economy."


    Peter Fisher, former Treasury Undersecretary for Domestic Finance under George W. Bush, told the conference that bond markets were too fixated on near-term deficit expectations.


    As budget deficits are expected to decline modestly in the next few years, Fisher said markets were unlikely to concern themselves with longer term risks.


    "While we have this path ... I don't think we should expect the bond traders of the world to ring the warning bell for us," he said. "I fear that the bond market will react too slowly."


    -END-


    Rubin was gold enemy number one, Fisher was NUMBER TWO!


    This one sounds good to me. From http://www.Halfpasthuman.com


    Silver (as bullion) to go to $14 per ounce by 2 days before Thanksgiving.


    On what?


    Well, about a decade ago I produced software for reading which had the side benefit of aiding children with reading difficulties. One of the purchasers was a Russian gentlemen who got it for his daughter. We have maintained touch ever since. He is in the "specialty melt's business" as he calls it. No, it doesn't mean that he produces cheese based sandwiches, rather that his company refines and melts metals for all sorts of specialized purposes. Some of the many things that they produce are silver plated or pure silver awards and plaques. They also recover silver for people (dis-hoarding). One of my tovarisch's comments recently is that if the premiums that the 'big boys' (larger bullion companies) are paying for silver are put into a spreadsheet and charted out to the end of the year, it shows that an ounce will reach $14 (wholesale) before Thanksgiving. Now his opinion is that the big boys are just starting to ramp up the incentives to deliver silver and that the rate of increase itself will increase such that silver hits 14 an ounce before September, however, my comrade-in-thinking here is optimistic as he has, as he puts it, "my ass firmly planted on a small chair of recovered argentum". But, as he also notes, one would be a 'fool to bail out the shorts at anything less than triple digits', so he will be sitting on his chair for a little while longer it seems. The real point is the 'echo' that is occurring throughout the production side of silver that the 'shortage is on'. Prices for any specialty product based on silver are rising daily and availability is declining rapidly.


    -END-


    That confirms what I have been hearing for months now and passed on your way.


    The gold shares were subdued with the XAU dropping .12 to 88.44 and the HUI gaining .42 to 194.30.


    Whatever gold and silver do in the weeks ahead, this is NOT a time to be too cute. The precious metals historic investment opportunity of a lifetime has been upon us for 3 years now. During that time we have seen significant moves up and down. We have gone through euphoria and despair. The months ahead are going to take us to another euphoric stage. Therefore, it is time to be fully invested and accumulate what we can on all dips. You don’t want to be on the sidelines when our gold/silver super-train leaves the station!


    GATA BE IN IT TO WIN IT!


    MIDAS