Beiträge von Schwabenpfeil

THE BIG STORY of the day is surging inflation … and this was written last night before today’s commodity price explosion:

The King Report
M. Ramsey King Securities, Inc.
Tuesday Feb. 22, 2005 – Issue 3102 "Independent View of the News"

The PPI at 0.3% was in-line, but the core surged 0.8%, four times the expected 0.2%. Core PPI at 2.7% y/y is the highest since 11/95. Gee and to think that Easy Al just stated,

"Inflation pressures have recently abated." Core price increases occurred across the board, and prodded analysts to surmise that last year’s surging commodity, energy and raw material prices are no longer bottled up in the pipeline, but are being manifest in final prices. Companies still dread adding capacity, so they’re raising prices.

Friday’s unexpectedly ugly PPI also demonstrates the foolishness of Easy Al’s "measured" response to inflation. The "measured" increases in fed funds, which still render real rates negative, will not inhibit inflation. This pressures Easy Al because he is, and has been for years, positive rear rates or contracting reserves because it would likely induce the dreaded debt deflation.

Easy Al testified that he cannot determine the ‘neutral rate’ for fed funds. Yet no one has rebuked him for this stunning confession. To know if the Fed’s policy is expansionary or contracting is his main job; the other is to bailout the system when needed. People spend years in school and in professions trying to ascertain real rates of interest. Easy Al’s inability to determine the real rate of interest is like an umpire saying he cannot determine the strike zone. It’s the essential requirement of the job. Yet The Street is mum. After decades of glorifying the self-confessed doofus, The Street must now ignore Easy Al’s obvious faults because they have invested so much of their own self-esteem and integrity in praising him.

Midwest Research notes: "DE now expects raw material inflation at $500mm or a $1.30/share headwind for F05E - this is v. prior outlook of $300mm…KMT raised prices by 5-10% on 1/1/05 across many of its Advanced Materials product lines…SHW raised prices 5-7% in February, the 3rd increase in the past 12 months, while Duron raised prices around 5%; PPG stores, Kelly Moore, Dunn Edwards have all pushed through similar price increases in the past few weeks…Sub prime home equity lender American Business Financial Services (ABFIQ) filed for bankruptcy in January following a liquidity crisis which began over a year ago when they could not place high yield debt which likely was to be used to inject add’l capital into the primary subsidiary."

The big rally in oil and gasoline is not reflected in the January PPI. BLS actually has energy prices down 1.3% for January, with crude energy prices down 4.5%! Absurd! The below charts show crude oil rallied from the low to high $40 handle; gasoline and heating oil surged while natural gas traded sideways.

This means the big increases in energy and industrial commodities – the Goldman Sachs Industrial Metals Index made a new high last week – should be reflected in the February PPI. The operative word is "should". ‘Who knows what evil lurks in the hearts of the BLS?’

We are including the BLS tables on adjusted and UNADJUSTED stages of production to demonstrate just how big adjustments are. The UNADJUSTED prices of "Intermediate Goods" increased 8.7% in January. Unadjusted ‘fuels & products’ prices increased 11.4% in January!

One more thing – The BLS PPI reports states, "Effective with this release, the Producer Price Index (PPI) includes data for 58 resampled and 3 newly introduced industries classified according to the North American Industry Classification System (NAICS)." http://bls.gov/news.release/ppi.nr0.htm

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But, there is no inflation:

Feb. 22 (Bloomberg) -- Cia. Vale do Rio Doce, the world's largest iron ore producer, raised prices by a record 71.2 percent for Japan's two biggest steelmakers as surging demand from Chinese steel mills caused shortages of raw materials.

The annual agreements with Tokyo-based Nippon Steel Corp. and JFE Steel Corp. were the first between steelmakers and suppliers this year and came as Rio de Janeiro-based Vale and BHP Billiton Plc, which ship three-fourths of the world's iron ore, negotiate with European steelmakers. Shares of steelmakers, including Luxembourg-based Arcelor SA and Germany's ThyssenKrupp AG, fell, while Vale had its biggest gain in four months.

More on the dollar:

Dollar Declines on Report Korea to Diversify Currency Reserves

Feb. 22 (Bloomberg) -- The dollar fell by a cent against the euro and dropped versus the yen on a report that South Korea's central bank will diversify its currency reserves.

The central bank, which has $200 billion in reserves, will ``diversify the currencies in which it invests,'' Reuters said yesterday, citing a Bank of Korea spokesman in a parliamentary report. Byun Jai Yung, head of the bank's planning department, told Bloomberg in a telephone interview that he can't comment.

``Support for the dollar is quickly disappearing,'' said Kenichiro Ikezawa, who manages $1 billion in overseas debt at Daiwa SB Investments in Tokyo. ``This Korean story is having quite an impact because it feeds into suspicion that others are also seeking to cut their exposure to the dollar.'' ..

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CARTEL CAPITULATION WATCH

The US stock market could be in big trouble and should be. Iraq is still a mess and the Bush Administration has done nothing to correct US fiscal problems. It goes on from there.

Fannie Mae continues to dive-bomb, falling another $1.10 to $57.80.

Enrico Orlandini of the Lasco Report:

The Transport Index in now down +/- 69.00 and close to the February low of 3,542.00. If we can work our way down through this in the next couple of days, we should set up nicely for a test of the December lows in the DJIA as well as in the Transport Index.

Right now we have an unusual situation: the DJIA, the US$, and the bond all down. The first two are down hard. Remember a long time ago I told you that when the crash comes, it will come across the board, i.e., in bonds, stocks, and the dollar all at the same time. No prisoners will be taken. Today is a coming attraction.

Buy gold!
EBO

The John Brimelow Report

Happy New Year, at last?

Monday, February 22 2005

Indian ex-duty premiums: AM $7.86, PM $ 6.08, with world gold at $427.55 and $430.65. Ample, and adequate for legal imports. Yesterday Bombay was closed: premiums from Ahmedabad, sometimes said to be Bombay’s major competitor, were adequate for legal imports.

This was despite reportedly significant rupee-suppressing intervention by the Reserve Bank. Today the dollar slump permitted the India authorities to tolerate a small rally, while effectively obtaining a further devaluation against most other currencies. They have a serious problem: foreign portfolio investments inflows this month already stand 500% above January at $1.4 Billion (2004’s total was only $8.5 Billion).

A Reuters story with the egregiously misleading headline

"Higher prices may curb strong Mideast gold demand" sheds valuable light on the failure of the sellers to break gold down this year. Emanating from the Dubai Gold Conference, it reads:

"DUBAI, Feb 22 (Reuters) - Middle East gold demand has been strong in the first seven weeks of 2005…Philip Olden, managing director for marketing and jewellery at the World Gold Council (WGC), said the month-long Dubai Shopping Festival, which ended in mid-February, had witnessed "huge sales increases" for Dubai's jewellery traders."

"B.P. Sharma, managing director of Jumooh Jewellers, a Dubai-based gold jewellery manufacturer and distributor, said retail demand had surged this year after gold prices came off the 16-1/2-year peak of $456.75 per troy ounce hit last December. "There is so much demand, I cannot make enough (jewellery). Three months ago it was nothing, but when the price went down to around $420 business increased four times," he said"

"Paul Walker, chief executive of London-based precious metals consultancy GFMS Ltd, said dealers in the Middle East and Indian physical gold market "can't get enough gold". Walker said premiums above the London-quoted price for a one kilogram bar, the typical unit in Asia, averaged between 15-30 cents per ounce in the past three years. In some Middle East markets last week, he said, the premium per ounce was about $1.20, reflecting strong demand." (JB emphasis)

These almost unprecedented remarks suggest the Bears who went into action starting in Christmas week have seriously over-reached themselves.

Japan remains indifferent. TOCOM ended a 9-day gaining streak today, with the active contract slipping 7 yen. World gold was actually up $2 from the London close, but open interest was static (at 103,948 Comex equivalent), as it was the day before. Volume was equal to 16,115 Comex lots. (NY on Friday traded 31,926 contracts, pretty heavy for the short session. Open interest slipped 32 lots to 263,509.

Two ECB captive Central Banks sold E 93 Mm of gold last week, about 8.9 tonnes, somewhat more than the recent average.

After a boring couple of days, gold exploded into life this morning in the aftermath of stories from Korea and Bahrein - cheered on by George Soros - suggesting that Central Bank diversification away from the dollar is actually underway. Highly significantly, it also gained against the Euro (the Euro gold chart is worth a glance). On this basis it is almost back to the January high.

The dollar’s slump electrified The Gartman Letter, which has abandoned all optimism about the currency:

"Sell stops in the dollar are being hit everywhere and against all of its major and minor currencies, and we fear this is the start of what might well be a rout on the downside…the market's psychology … we fear shall become worse, rather than better, over

the course of the next several weeks." Gartman has reacted:

"…we have no choice but to begin this discussion with the very strong recommendation that gold positions be added to upon receipt of this commentary, or if they cannot be added to by our clients immediately, that as soon as the markets they are able to deal in are open for business they add to their positions then. We trust we are clear on this issue."

The danger of the Bear’s position was highlighted by the UBS assessment on the CFTC data yesterday:

"Contrary to our expectations, the COTR for gold showed that the recent recovery in gold was not driven by short covering but by a modest increase in new longs…gross short positions increased to 8.48Moz, up 90k while 1.6Moz of new longs lifted the gross long position to 16.77Moz, leaving the net long position up 1.52 million ounces at a still-modest 8.3Moz. Since Last Tuesday, open interest has increased modestly and we believe that net long position is probably between 9 and 9.5Moz." (JB emphasis)

Apparently an astute trader, Gartman successfully bought the late Fall breakout, sold basically at the top in December – and although sorely tempted, did not go short. One suspects that his intimate relationship with certain Hedge Funds helps. ACCESS volume last night was a very heavy 8,302 lots.

A similar message come from a different perspective from Bridgewater Associates this morning:

"Risk Premiums at 40 year lows"

"…the decline in risk spreads appear to have taken on a life of their own.

The unprecedented push of money into "arbitrage" style hedge funds is likely a contributing factor. Roughly $70 billion has flowed into these hedge fund strategies in the last 12 months…It appears the Long Term Capital Management experience has faded out of the market’s memory…We are certainly nervous about all the calm that is expected…Risk spreads, in aggregate, are at their tightest in forty years."

The obvious reason why gold should rise so much on a fairly modest rise in overall spec exposure, of course, is OTC buying of physical from the consuming countries.

Perhaps now gold’s friends can begin to enjoy 2005.

JB

Items:

*Tomorrow is option expiry for March copper and silver.
*The euro gold price ended the day at 328.59, up 0.67, a new high, yet way way off what it should be.
*A change of pace … gold is up $1.30 in the Access Market as I go to print. Wonder how long that will last? (!!! It is now 6:08 CST and gold is down 20 cents - right on cue - the up move after the close lasted only until Australia opened)

As mentioned of late by MIDAS, the perfect storm is brewing out there which is likely to wreak havoc with the financial markets. Rising commodity prices and a falling dollar is very inflationary and can’t help but put a crimp in corporate profits. If interest rates rise sharply, forget about it. Short rates have been rising. Long rates took off last week. Should both continue to move and do so with vigor, the US stock and real estate markets will be in deep trouble. March bonds closed down ¼ to 113 22/32 to extend their losing streak.

Our STALKER source called today with input from this London bullion dealer. Like most everyone all of a sudden, they are gold friendly and dollar bearish, looking for $450 gold, sub 80 on the dollar, and $9 to $10 on silver. Word also is the baby STALKERS have been buying gold fairly aggressively the last two days. This means the Chinese are on a gold scamper.

The gold open interest fell 32 contracts to 263,509, while the silver open interest rose 1907 contracts to 98,205.

Thanks to The Gold Cartel, there was powerful gold resistance, first at $427, then more so at $430. In one surging day, gold blew right through both of them after we got the gap opening and then run day I have been looking for. From a technical standpoint gold now has formidable support at $430. Any dips from today's close will be bought for the time being.
When gold took out $330 the price ran, when gold took out $430 last fall, the price ran; no reason for it not to do so once again.

By the way, for Café newcomers, the $6 Rule is the general level where The Gold Cartel instructs its members to cap the gold price. On a day like today when gold has EVERYTHING going for it, that level can extend up to $7.40, which is the upper band for the rule.

While totally disgusted with today’s price capping, the big picture looks fantastic. The bad guys are in deep trouble and are running out of options on how to contain the price of gold. Their plea for the IMF to sell gold is a thinly veiled disguised call for help. The nonsense about helping the poor is nothing more than that, nonsense. The Gold Cartel is scraping the bottom of their barrel.

After a cool spell in December and January, the kid has been on a roll as far as the MIDAS commentary is concerned. Never thought gold would correct as much as it did in January. The markets are finally coming around the way they should, at least from my perspective. The most exciting development is the surge in commodity prices which made 23-year highs with the aide of a sagging dollar.

So with all of this, actively traded April gold was only allowed to rise $6.90 and pretty much flat-lined after its early surge. Spot traded $434 at 9 AM EST; from there on it gained another 20 cents over the next 4 1/2 hours with the dollar sinking badly and oil going nuts to the upside. All efforts by bullion to put in a really exciting day like other commodity markets were CRUSHED by the pathetic Gold Cartel. Silver was held in check too and sold off after its early sharp move up. The silver price managing did not go unnoticed for a change:

1815 GMT [Dow Jones] Comex March silver is below $7.50 an ounce on bullion bank selling designed to curb the metal's appeal to technical or chart-following funds, dealers said. A close above the psychologically significant $7.50 level would likely attract more chart-based buying overnight, they say, while a close below there will likely limit the metal's near term appeal. (GJM)

GATA could’ve written the DOW JONES silver comment today. It’s getting so obvious even Dow Jones can’t ignore the truth any more.

The $6 Rule is alive and well. DJ ought to write about that too. When will this obvious price management ever end? Answer: Only when the crooks are defeated and lose control of their scam. We are not there yet.

Only two weeks ago, I suggested the odds of the grains/oilseed complex coming to life had a fairly high probability and, in that case, the CRB would have a 300 handle on it in short order. Should get it some time this week. That ought to set off a bunch of bells and whistles inflation commentary, especially after last week’s stunning PPI number. Now if tomorrow’s CPI number is a doozie!

*Then, you have a weak stock market. The DOW fell 173 to 10,611; the DOG dropped 28 to 2030; and the S&P gave up 17 to 1184. This is most significant DOW down day in some time and the largest S&P drop in 7 months.

*On top of all of that, gold blows right through powerful resistance, leaving a substantial base to support a MUCH higher price move.

Putting all of that together, you have a recipe for gold to go up $10 to $20. That is if it were a free market. But, we don’t have one. It is rigged/managed by anti-trust operatives sanctioned by our government. We have a bunch of Orwellians running the US financial markets. As I have been ranting for weeks, these bums are going to take America down and are in the process of doing so. They, with our Fed, have facilitated one financial/economic bubble after another which will bust. When they do, as mentioned yesterday, the average American won’t know what hit them. The collapse of the Nasdaq a few years ago was only jacks for openers.

"People are taking the Bank of Korea story a bit more seriously and there's some talk other central banks are backing away as well," said David Mozina, a currency strategist at ABN Amro Holding NV in Sydney. The dollar's decline triggered some automatic orders to sell the currency, he said." – Reuters

This one significant development changed the tone of the dollar market, as well as its technical picture. By the close it fell to 82.41, down 1.11. The euro sailed 1.91 higher to 132.62. After trading at 105.66 early on, the yen rose to 104.04, a substantial move.

*If that wasn’t dramatic enough, the CRB went bananas, blowing through 23-year highs:

April CRB

http://futures.tradingcharts.com/chart/CR/X

The spot CRB closed at 297.49, up a whopping 6.83, and was led by:

Mach crude oil - up a dramatic $2.80 to $51.15 per barrel, and

March wheat
http://futures.tradingcharts.com/chart/CW/35

and

March soybeans, up 24 ½ cents
http://futures.tradingcharts.com/chart/SB/35

February 22 – Gold $434.20 up $7.20 – Silver $7.49 up 10 cents

It Doesn’t Get Any Better, Yet $6 Rule Still Reigns / CRB Explodes

To change your life;

-Start immediately
-Do it flamboyantly
-No exceptions...William James

GO GATA!!!

GO GOLD RUSH 21!!!

If someone were to ask me to draw up a scenario in which gold should rise $10 to $20 during the Comex trading hours, it would be a day which looks like this one. It doesn’t get any better:

*For starters the dollar was clobbered on this news:

"The central bank, which has $200 billion in reserves, will "diversify the currencies in which it invests," Reuters said yesterday, citing a Bank of Korea spokesman in a parliamentary report. Byun Jai Yung, head of the bank's planning department, told Bloomberg in a telephone interview that he can't comment.

Ich fahre persönlich ebenfalls ein Anlageverhältnis von 2/3 Silber zu 1/3 Gold.

Gruß
Schwabenpfeil

Spent a good amount of time this weekend on Gold Rush 21. What is most encouraging is to receive this sort of feedback – from a fellow Café member in Australia:

"I have spoken to two CEOs, each of small to mid range precious metal miners…..Both men expressed interest, I sent them a Midas commentary. Bob had already been told by another shareholder when I spoke. I will be trying a few others."

In looking up the addresses of these precious metals firms to send invitation, I came across a very useful web site in Australia:

http://www.reflections.com.au/…n/Companies/Profiles.html

This is no time to hold back on contacting your favorite gold and silver companies. While August may seem a long way away, arrangements need to be made way in advance due to the location of our international conference in The Yukon. In addition, there are other concerns. For South African firms, for example, many SA citizens book winter holidays that time of year and many of the flights are already filling up. Received that input today after calling my friend Peter George in Cape Town.

Just as important to appreciate at this point in time is the conference will be sold out in the months to come. There are only so many rooms in Dawson City (we have booked a little over 100). Can’t have our guests sleeping outside with the bears.

Technically, please note how important 210/212 HUI and $430 gold is.

April Gold
http://futures.tradingcharts.com/chart/GD/45

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

There is powerful resistance for both at those levels. Once they are taken out, which I expect to occur this week, both gold and the HUI should take off.

GATA BE IN IT TO WIN IT!

MIDAS

All of this is just theory, of course, but the chart action sure isn't theory. It's historical fact. You can see instantly that each piece of Phase II is about a 50% magnification of the corresponding piece of Phase I. Not only that, but the MACD patterns of the beginnings of both big moves up were the same in both phases and it's now in exactly the same position as it was at the beginning of the first two. We just need the blue MACD line to cross up and through the red MACD line on the 4-year HUI weekly chart. The MACD seems poised to do so within the next four to eight weeks (unless, of course, the bad guys can find a way to prevent it).

The main thing is this: for my pattern to hold we absolutely CANNOT see the HUI move below its recent low for the move. Otherwise, back to the drawing board...
Derek

From Derek VanArtsdalen in San Antonio on the HUI:

Howdy, Bill:
I just completed a study of the HUI since the beginning of the bull market starting in 2001. I happened across a six-step price pattern that seems to have repeated itself almost move-for-move in the first two phases of the HUI's advance. Here's what I found...

Assuming the pattern holds (and that's the crucial phrase!!), we have indeed seen the bottom for the HUI. The big climb for the first phase lasted six months and took the HUI up six bars on the graph (each bar equals 15 points, so 90 points total). The pattern seems to have repeated itself exactly in Phase II, which took the HUI up nine bars on the graph and lasted about nine months.

So the second "wave" up was approximately 50% bigger than wave one in almost every respect, including sideways chops, retracements and gains. Perhaps this pattern reflects the scientific formula for "pi" or even a fibonnaci relationship. Of that I'm not really sure.

Anyway, if what I've identified has merit, the HUI should begin a steady climb up without much retracement for the next 9 months (minimum) to something like 12 or 13 months at the outside (if the 50% thing holds). In other words, it's this next major leg up (Phase III) that should be the doozy! Nature has a way of clustering things in groups of three, it seems, and if this pattern does repeat, the third time will definitely be charming for precious metals investors.

By my calculations, the HUI should reach no less than 375 to 390 and could go even higher. The time frame for that peak should be anywhere from December this year to perhaps as late as April or so of 2006. The point is, if I'm right about this pattern then the big move up has ALREADY BEGUN and we shouldn't see any major retracements in the HUI for a good, long while.

Barrick Gold continues to confound and appears to be what it is, a stooge for The Gold Cartel:

Bill,
According to Mining Weekly, "Dehedging in the fourth quarter of 2004 (Q4) maintained its elevated levels, touching 3,64-million oz." I find it odd that with all this de-hedging activity going on, Barrick did not report any de-hedging activity at all for the fourth quarter. There's something strange going on there - as usual.
Best wishes,
Peter R.

Michel de Chabert-Ostland wonders if any Café member has any further insight into the Swiss and their gold:

Hi Bill,
An article on the SNB's gold holdings appeared in the last page of the first section of the FT's Dec. 7th issue. It states the following:

1. " By May, the programme ( of selling 1/2 of its total of 2600 tonnes ) will have raised about $21 bn ...".

2. Apparently the SNB has a lot of money to disperse and there is a big dispute in Switzerland as to where it goes. But my interest in emailing this to you is the following from the FT article:

" The sums involved are prodigious. This year, the central bank will pass about SFr2.9bn ( $2.5bn ) to the state. Its profits comprise operating earnings, COMPLEX BACKPAYMENTS, AND SFr 400m IN GOLD -RELATED REVENUES " ( MY CAPS ).

I was stunned by the term " complex backpayments " but even more so by " SFr 400m in gold-related revenues ". Even if they had the $21bn at the beginning of the year plus whatever else they had before, it would be an extraordinary return on capital. How could a central bank show such profits when they are by definition not a trading firm ? Could they have been partners with the bullion banks in their manipulation of the gold price and have profited very handsomely over many years from this arrangement and those profits are now showing up miraculously on their books? I smell a rat here and I would like very much one of your bright analysts to look into it, time providing.
Best Regards,
Michel de Chabert-Ostland

More on GLD from James Turk in his Freemarket Gold & Money Report over the weekend. Seems to me James has had this one nailed for some time. Proof/evidence of the correctness of his initial assertions continue to mount:

THE GOLD ETF
I have been very critical of GLD, the new exchange-traded fund for gold. My point has been that it is not an alternative to owning physical metal. Rather, it is just another paper alternative promising to deliver gold.

Consequently, I have been wondering how GLD would prepare its financial statements, given that the prospectus discloses that gold stored in its subcustodians and sub-subcustodians (which could be all of GLD's gold) is not audited, or even inspected. Its recently filed 10-Q answers this question.

The asset reported on GLD's balance sheet says: "Investment in Gold". It does not say just: "Gold". By declaring GLD's asset to be an "investment", it is an easier hurdle to meet for auditing purposes.

Investments in gold can be nearly anything gold related, and for example, include gold certificates and other promises to pay gold. All GLD has to do to satisfy the auditors therefore is to show them a bank statement of the Bank of England for example, or any other subcustodian (i.e., a piece of paper) that says gold is stored with them.

If GLD declared its asset to be "Gold", they would have to substantiate to their auditors that the gold really exists, which GLD of course cannot do because of the inability to audit or even inspect gold stored in subcustodians and sub-subcustodians.

Thus, this 10-Q just re-confirms what I and others have concluded all along GLD is just another paper scheme. It should not be considered as an alternative to physical gold ownership because it is not. But we only need logic, and not the 10-Q, to tell us that.

Since launching in November 2004, GLD has gathered some $2 billion of assets. Its sponsors would have us believe that this $2 billion is newly created gold demand, but this proposition is self-evidently preposterous given that the gold price has fallen $30 since GLD was launched.

How much of that $2 billion would have been used to purchase physical metal if GLD hadn't existed? How much higher would gold be today if GLD wasn't launched? So do not view GLD as an alternative to physical gold, because it's not.

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Copper prices at 16-year high amid strong Chinese demand

Charlotte Moore
Saturday February 19, 2005
The Guardian

World copper prices touched a 16-year high yesterday as strong Chinese demand for the metal showed no signs of easing up.

Traders said flows from investment funds pushed the three-month copper price on the London Metal Exchange to $3,230 (£1,706) a tonne during frantic trading.

Copper has risen sharply over the past year as the strongest growth of the global economy for 30 years boosted the prices of commodities across the board. China's industrialisation has been a key driver of commodity prices as the rapidly growing economy sucks in all kinds of metals. Copper is widely used by the construction and power-generation industries.

Adam Rowley, a commodities analyst at Macquarie, said: "There has been strong investment in the Chinese power sector to compensate for the severe power shortages seen over the past few years and a big chunk of Chinese demand for the metal is coming from this."

Figures showed that production of power-generation equipment in China doubled last year, he added.

Global inventory levels of the metal are at record lows but mining companies are beginning to increase the amount of copper they produce. It usually takes three years before the metal is on the market from the time the mining company decides to produce more, Mr Rowley said….

Good grief, will wonders ever cease - Dennis Gartman comentary today:
Turning to gold, where we have once again re-joined the bullish camp for the first time since early December when we exited all long positions when spot gold was trading just above $450, we note that confusion reigns regarding potential IMF sales of gold from its reserves... or the possibility of revalueing its reserves to current spot gold prices. The Chancellor of the Exchequer in the UK, Mr. Brown, has led the campaign for such sales and has opened the debate. Obviously, most of the gold mining industry is opposed to them, and so too are we the more we consider them. Far better to allow the IMF to revalue its gold hoard to present market levels and then use that upward revision to its balance sheet to sponsor debt forgiveness efforts for LDC's than to keep pressure upon gold prices through gold sales that we think do damage to the nations that mine it. We find it disconcerting then that we find ourselves agreeing with GATA on this issue, but we do. There are better ways to accommodate debt forgiveness and/or debt consolidation than through gold sales. Those other paths should be explored:

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