So isses. Hier die neue Ausgabe.
June 22 - Gold $394.90 up $1.10 – Silver $5.85 unchanged
Gold Technicals Are Very Bullish
We do not believe in ourselves until someone reveals that deep inside us something is valuable, worth listening to, worthy of our trust, sacred to our touch. Once we believe in ourselves we can risk curiosity, wonder, spontaneous delight or any experience that reveals the human spirit...ee cummings
GO GATA!!!!
For the third morning in a row gold demonstrated independent strength from the dollar. At 8:21 AM CDT gold was up $1 with the euro down .30, which was just where both ended. The MIDAS commentary this past week+ has covered the observation of very strong hand buying out there accumulating bullion, irrespective of what the dollar is doing. They are picking their spots and not paying up, however, this group is very evident and making sure they get what they are looking for.
Morgan Stanley tried to bully gold in the early going to the upside, however ran into the 500 Pound Gorilla, Goldman Sachs, which stopped the rally in its tracks. Later on local firms jumped in on the sell side after gold popped to make short-lived new highs. The cabal troops keep sending a message to the specs to stay away from gold on the long side. As long as the cabal keeps bullion below its key moving averages and $400, the scheme will work. Specs will liquidate at these levels, or even go short. Yet, I suspect The Gold Cartel could have a lot of trouble soon. Once above those levels, as oft-mentioned here of late, there is room for the specs to come piling in and that they will. This will occur if the cash buyers suddenly turn aggressive.
There is always the matter IF gold will take out $400 soon. Some are looking for gold to be pounded by The Gold Cartel when the Fed raises interest rates next week because that is their standard modus operandi. Others, like myself, think the gold market is ready to surprise on the upside because there are so few spec bulls out there and the cash market is so firm. More and more it appears traders are waiting for the June 30th Fed announcement to take positions. The markets in general have all thinned out and become very choppy.
The gold open interest continues to contract, falling yesterday to 219,443, down 1629 contracts.
Silver remains very choppy also with little selling pressure, but also with few bids showing up. There are substantial bids around $5.74, not at these levels at the moment.
The silver open interest rose 546 contracts to 86,967.
Why is it that when there is talk of central banks selling gold, it makes for a big story on the likes of Bloomberg and http://www.bulliondesk.com, yet when there is news about central banks perhaps not selling, one can only find a headline here and there?
Reuters – June 22
GERMAN GOVT HAS NO PLANS TO SET UP FOUNDATION TO MANAGE GOLD SALE PROCEEDS – SOURCE
GERMAN GOVT SOURCE SAYS UP TO BUBA TO DECIDE IF IT WANTS TO SELL GOLD
Of course, we know the answer to that question.
Some more disturbing news briefs today, which only unsettle the markets further:
Follow-up: LIRR rail service to and from NY's Penn Station is suspended -- Bloomberg
* * * * *
10:25 NY police investigate suspicious package at Brooklyn LIRR station -- Bloomberg
NY police scanner reports suspicious package at Manhattan courthouse, 60 Centre St.
The bomb squad is reportedly en route. We note that there have been many such suspicious package incidents of late; all, fortunately, benign.
-END-
Gold has built a substantial base below $400. This kind of base can support a move to $430 very easily.
August gold
http://futures.tradingcharts.com/chart/GD/84
The John Brimelow Report
Japan IS a buyer
Tuesday, June 22, 2004
Indian ex-duty premiums: AM $3.94, PM ($0.15) with world gold at $394.30 and $393.90. Below, and seriously below legal import level. (What the PM reading means is that Indian prices and world prices were separated by a gap smaller than the national gold import duty, currently equivalent to about $6.75 an ounce.) The reason for this sad state of affairs is a slump in the rupee, down to an 11 month low against the Dollar on gloom about the new government being business-unfriendly.
Things really do seem brighter on Japan, however. TOCOM volume fell 25% to equal only 15,360 Comex lots, with open interest and price virtually static (down 762 Comex and 1 yen -[active contract] - and 10c versus NY close). But Reuters reported from Singapore today:
"…Ellison Chu, a senior manager at Standard Bank London in Hong Kong (said 
"I was told the demand from Japan was very good in the last few weeks," Dealers in Japan said premiums to London spot prices were steady at $1 an ounce, compared with zero a few months ago…"People talk about a shortage of gold bars, and I would say that's true. It's definitely not a market rumour," said another dealer in Hong Kong. "When gold price went down to $378 a number of weeks ago, there was a mass buying that brought out all inventories. This happened everywhere," he said."
(NY traded 39,654 lots on Monday. Open Interest fell 1,629 contacts.)
JB
John also sent us the full gold premiums story, which supports what MIDAS has been reporting to you on the North America gold premiums:
Asia Gold-China slows down, premiums steady in HK
By Lewa Pardomuan
SINGAPORE, June 22 (Reuters) - China's gold purchases have slowed in recent weeks but premiums for gold bars in the key trading centre of Hong Kong were mostly steady due to tight supply and better demand from elsewhere, traders said on Tuesday.
Premiums for gold bars were unchanged at 10 to 20 U.S. cents an ounce to London physical prices in Hong Kong, which deals with mainland China, Japan and South Korea.
Gold is mostly used for jewellery and investment in Asia.
"Demand is not too strong after a long holiday in May. It's a usual situation," said Ellison Chu, a senior manager at Standard Bank London in Hong Kong. A week-long May Day break in China, the world's third-largest gold consumer, had boosted demand and pushed up premiums to as high as 40 U.S. cents an ounce.
"After When gold price went down to $378 a number of weeks ago, there was a mass buying that brought out all inventories the long holiday, demand would slow down. (But) I was told the demand from Japan was very good in the last few weeks," said Chu.
Dealers in Japan said premiums to London spot prices were steady at $1 an ounce, compared with zero a few months ago, because of the yen's strength, which makes gold cheaper for local gold buyers.
"People talk about a shortage of gold bars, and I would say that's true. It's definitely not a market rumour," said another dealer in Hong Kong.
". This happened everywhere," he said.
Some dealers said tight supplies would provide some support for the premiums, though gold prices had started to climb again because of the dollar's weakness. Investors often take profits each time prices rise, putting pressure on premiums.
In Singapore, the entry point for much of bullion trading in Southeast Asia, gold bars remained as high as 70 U.S. cents an ounce to London physical prices despite some profit-taking.
Some dealers said gold's safe-haven premium had been highlighted as Iraqi insurgents stepped up deadly attacks before the U.S. occupation authority turns over power to an interim Iraqi government in late June.
The World Gold Council said earlier in June consumer demand for gold, including jewellery and retail investment, rose 12 percent to 681 tonnes in the first quarter of 2004 compared with the same period a year earlier, despite prices hitting 15-year highs.
Spot gold peaked at $430.50 a troy ounce in January and nearly reached that level again in April. Some dealers expected gold to regain $400 in the next few weeks with help from further dollar weakness. ((Reporting by Lewa Pardomuan; Reuters Messaging: lewa.pardomuan.reuters.com@reuters.net; +65 6870 3834))
CARTEL CAPITULATION WATCH
Once again the DOW pulled off a leisurely Hail Mary rally during the late afternoon. After dropping 60 early on, it managed to close at 10,395, up 24. The DOG gained 20 to 1994. It appears The Working Group on Financial markets is working hard to hold the US stock market up until the Fed makes its decision next week and then is preparing to gun it. Will it work?
The coming US rate increase is disturbing world investors:
http://story.news.yahoo.com/ne…investors_confidence_dc_1
LONDON (Reuters) - Global investor confidence fell in June, hitting a new 2004 low as institutions hunkered down in anticipation of the first U.S. interest rate hike in four years, State Street said on Tuesday.
The U.S.-based financial services firm said its State Street Investor Confidence Index slipped to a fresh 2004-low of 85.5 points in June, down 6.4 points, the sharpest monthly fall since February. The index is now at the lowest since October 1999. –END-
Congrats to Goldman Sachs who reported stupendous profits in the second quarter, no doubt greatly aided by the collapse in the gold price which they helped to engineer with their cartel colleagues.
June 22 (Bloomberg) -- Goldman Sachs Group Inc., the third- largest securities firm, said second-quarter profit rose 71 percent, helped by revenue from trading and investment banking…-END-
Why do we even have anti-trust laws in the US when Goldman Sachs is allowed to get away with stealing from the public for so many years? The evidence is plain as day, and the authorities just look the other way.
GATA’s Mike Bolser:
Hi Bill:
The Fed added $4.25 in tomos today, an action that dropped the repo pool a
bit to $43.13 Billion. The pool's 30-day ma stays in a linear up trend phase and the DOE is much closer to its own Labor Day 11,750 trend line than it was a few weeks ago. The DOW's 30-day ma has definitely turned back up as well so we see the levitation effects of a steadily rising repo pool and the primary dealer's futures buying.
Project 990N has been all the rage this week as the shadowy group heavily buys S&P e-mini contracts to support that index. Nothing new there, just another mystery group intervening to keep a "National security index" elevated. They aren't particularly concerned who knows about it as that would serve their purposes too...intimidation. You sell, you pay the price. As Sean Corrigan so well put it in an essay about a year ago, "All government is about coercion". However, even governments sometimes run out of rope.
The PPI report is still a deep concern to the Fed and may have been the reason they hammered gold in such a furious manner this last month and the trade deficit continues its upward spiral. We must be very careful and prepared to take advantage of any gold weakness as the Fed pushes through its June 29th meeting, even though they have gold left to sell as the recent BIS forwards and swaps data show from Basel, Switzerland. The Triennial Survey is due out later this year and will have a updated total for forwards and swaps for the full reporting component of central banks. It will be interesting.
But how much of the remaining gold tonnage is really available to the gold cartel to sell below market prices? France is highly unlikely to sell even one ounce of their 3,000 tonnes, the Bundesbank is deathly quiet (from the Fed's point of view) on their much trumpeted gold sales and the major gold producers are covering their own forwards while we see central banks like Portugal, Romania, Norway, and Australia empty their own vaults. That situation suggests an increasingly stressful atmosphere for the Fed and silver may be far worse.
The two metals are markedly different in their interventional requirements. There just isn't sufficient stocks of silver as there are for gold. I have said before that the failure mechanism this time around will be different than in 1979. Which metal breaks down first will matter this time around.
Mike
Chuck checks in:
Positive Action
I like what I see here. Amidst the very pessimistic tone of the gold advisory and negative sentiment indicators we are beginning to see some good responses. To me these are part of the bottoming process and counter to the massive topping process of the regular stock market.
I still fully believe that the vast wasteland of Wall Street and America is unprepared for what is streaking rapidly down the pike both financially and geopolitically. The days of ease and comfort are drawing to a close. It is very eerie. Chuck ikiecohen@msn.com
Derek Van Artsdalen with some goodies from San Antonio:
Good morning, Bill:
Here's another brief update on the gold situation. Over the last 15 weeks or so, gold has formed a falling wedge pattern. As I've written in the past, this is an extremely bullish pattern and is relatively rare. Normally, the overall failure rate of these patterns is a slight 10%. Not bad. But it gets even better.
The odds of success increase to 98% once the price action closes above the top down-sloping trend line, which happened both yesterday and Friday (green circle). In other words, the expected failure rate has now dropped to a miniscule 2%. Now THAT'S a bet worth making!
More good news: these patterns reach their predicted price targets (see next paragraph) an impressive 88% bof the time. The internal indicators are also looking great on this chart, with the RSI showing building strength (red line) and the MACD having penetrated the zero point once again and headed back up (red circle).
The average rise from these formations upon upside penetration is 43% from the point of the breakout, with the most likely rise being AT LEAST 20%—30%. Even a 25% rise from the point of breakout on this chart (which occurred at roughly $389) takes us to $486.00 at the minimum. A 40% rise from the breakout takes us to
$544.00. Wow.
A brilliant lady friend of mine in Manhattan (also a Cafe member) who is an excellent trader is always quick to remind me that gold will probably meet heavy selling resistance once it approaches the $500 mark, and she's probably right. But that doesn't mean that gold won't break through $500 sooner or later. Also, a lot of people don't realize that when gold surpassed $850/ounce in January 1980 it
eventually fell to slightly below $300 in June of 1982, leaving a long-unfulfilled upward 50% retracement mark of $575. Will that level finally be attained
in the year ahead? I sure wouldn't rule it out.
Keep in mind, this falling wedge stuff implies relatively short-term action, meaning weeks to a couple or three months at the most. So, gold's near-term prospects should be exciting. There is one caveat, though: these patterns demonstrate "throwbacks" nearly half the time. In other words, once the price breaks upward out of the pattern, it frequently comes heading back down toward the top line before it begins its strong ascent. We need to make sure we aren't faked out if the price doesn't blast straight up immediately.
That's it for now, my friend. Keep hitting the Cabal with the one thing they absolutely cannot tolerate: the facts.
From sunny south Texas (where it's presently pouring rain),
Derek
Canadian inflation news:
POSTED AT 9:44 AM EST Tuesday, June 22
Canadian inflation jumps
TERRY WEBER
Globe and Mail Update
Canada's annual rate of inflation shot up to 2.5 per cent in May, fuelled by the biggest monthly increase in gasoline prices in more than two decades, Statistics Canada said Tuesday.
Economists had predicted a jump in the 12-month consumer price index last month on the back of higher gas prices, but most foresaw a more moderate 2.1 per cent.
In April, the annual rate of inflation was 1.6 per cent. –END-
Gold demand news:
Gold bar trading begins in Beijing
BEIJING, June 22 (Xinhuanet) -- China Merchants Bank began to release gold bars to investors here Tuesday on a trial basis, becoming China's first banking institution to offer the product that first began trading again last year after half a century, Beijing Star Daily reported Tuesday.
The newspaper quoted Liu Dong, an assistant to the general manager of the personal banking department of the bank, as saying the trading will be done manually at first as its Internet-based automatic trading system will not be available until two days later.
A total of 5 million yuan (609,000 US dollars) worth of gold bars will be up for grabs at the bank's Beijing Branch Office, the newspaper reported.
The bank would offer the trading services in other outlets in Beijing if business turns out to be good, said Liu.
China resumed gold bullion trading, another choice of investment for Chinese investors, on Oct. 30, 2003 at the Shanghai Gold Exchange after half a century closure.
-END-
Mahendra just called from the LA Airport to say hello on his way back to Nairobi, Kenya. He also says hello to Cafe members and predicts gold will reach the $480/$500 area by year end with silver reaching around $14 per ounce. His work suggests the precious metals won't really start to roar until August, yet the downside from here is very limited.
Brother Tim, a superb technician, reports in:
Hey Big Brother, Technically, gold looks poised for a rally soon. The weekly chart shows a bullish 'megaphone' pattern going back to January. The daily chart shows a head and shoulders bottom with an objective of $430 if we close over $400. The daily chart also shows an 'island reversal' going back several weeks. I'd like to see a nice close in gold tomorrow followed by a gap opening over $400. That would certainly shake a few people up. With inflation clearly on the rise and Saudi Arabia about to be blown up, the interest in gold is amazingly low. That means a lot of potential buying power if gold shows some strength. The coin market held very well on gold and silver's last downturn. The MS65 Morgan Silver Dollar is actually up 32% since the first of the year! Keep up the great work. It will pay off big time in the end!
Brother Tim.
Tim Murphy
Swiss America Trading Corp
Trmurphy@swissamerica.com
1-800-289-2646 ext 1019
Rival gold miners report higher reserves one week before big merger vote
Nancy Carr
Canadian Press
Tuesday, June 22, 2004
… Also Tuesday, Wheaton's rival suitor for Iamgold, Golden Star Resources Ltd. of Denver, which launched a takeover bid in late May, announced it has increased its total mineral resources at its Wassa gold project in Ghana by about 33 per cent.
Golden Star, which owns 90 per cent of Wassa and mines gold exclusively in Africa, boosted its estimate after completing a drilling program aimed at expanding its planned open pits at the project.
Click here: National Post
-END-
The gold shares continue to meander around, bobbing this way and then that. Interest in the sector remains very low. Astonishing with what all is going on out there in the geopolitical scene, as well as in the world financial arena.
The XAU gained 1.05 to 86.39 and the HUI lifted 1.08 to 188.54.
The big picture for gold and silver never looked better.
GATA BE IN IT TO WIN IT!
MIDAS
