Beiträge von Schwabenpfeil

Predictably, the euro (which already had rallied .30 after gold closed on Friday) took off and soon was up .80 to .90 on the day. This alone should have sent gold a good deal higher. Combined with the super bullish German gold news, the price should have popped $10 to $15 per ounce. However, as we know, that is NEVER allowed, certainly not on such obviously bullish news.

Interestingly enough, the Mexico silver news had more effect than the Bundesbank gold news. Silver opened firm and kept going, until dragged back in sympathy with the bullion mugging. Later, silver succumbed to the crummy gold action and went back to fill its gap left on the opening. Locals were forced to cover late and the price recovered, albeit 10 cents off its high.

The March silver chart is a funny one:

http://futures.tradingcharts.com/chart/SV/35

Look at that monster gap to be filled above the market. With the Germans basically declining to sell their gold and the Mexicans trying to bring silver into their monetary system, I would think both the gold and silver shorts would be very nervous at the moment.

The silver open interest fell 763 contracts to 99,952.

At least gold filled another one of those pesky gaps left below the market. Had today’s not been filled, it would have left three. As in silver, gold has a monster one to fill on the upside.

The gold open interest rose 2321 contracts to 320,905, which is around 55,000 off its recent high.

FT.com

Germany loses shine on lower sales of gold
By Kevin Morrison
Published: December 20 2004 20:31 | Last updated: December 20 2004 20:31

The Bundesbank said on Monday it would sell 8 tonnes of gold next year, providing the German finance ministry with smaller than expected proceeds from gold sales given the size of the country's budget deficit.

The bullion market had expected the German central bank to sell about 120 tonnes in the first year of a five-year agreement among European central banks, as the Bundesbank has an option to sell up to 600 tonnes before September 2009.

Axel Weber, the Bundesbank president, denied media reports over the weekend that he had favoured selling gold but been blocked by some board members.

"At the present time, the board sees no need to exercise its sales option," Mr Weber said. "Furthermore, gold sales cannot be a substitute for a sustainable budget consolidation strategy. "There will be no further sales within the framework of the first year of the gold agreement." Germany is expected to exceed the European Union budget deficit limit of 3 per cent of gross domestic product for a third year in a row next year. The German finance ministry had budgeted for a €2bn dividend from the Bundesbank next year, including proceeds from the gold sales.

The sale of 8 tonnes at the current price of about $443 a troy ounce would only yield $114m (€143m).

The German finance ministry has been keen to sell down the country's gold holdings of 3,440 tonnes, making it the world's second largest holder after the United States, while the Bundesbank has appeared as a more reluctant seller.

"It is a very small amount, and well below expectations," said Wolfgang Wrzesnick-Rossbach, product manager, precious metals and commodities, at Dresdner Kleinwort Wasserstein.

Mr Wrzesnick-Rossbach said while the Bundesbank announcement had little affect on gold prices, it could have a greater impact if the central bank was to make a similar sized sale next year. "If we see a repeat next year, it would be very bullish to the price," he said.

Under the Central Bank Gold Agreement renewed in September, the 15 signatories said they would sell up to 500 tonnes a year. The proposed sales by Germany and France would account for about half of the total, while about another 300 tonnes has been pledged by other publicly committed sellers including Switzerland and the Netherlands.

This still leaves a sizeable gap between the proposed total and the amounts committed for sale to date. Italy, which is the third largest gold holder among the signatories, has so far not committed to any gold sales.

The proposed 8-tonne sale will be used for minting coins. Germany has issued a series of commemorative gold coins in recent years including events such as the launch of the euro.

Under the original five-year central bank gold sales pact, Germany sold about 11 tonnes of gold, which was entirely used for minting coins.

-END-

FRANKFURT (AFX) - Bundesbank president Axel Weber dismissed reports he tried to push for the sale of part of the central bank's gold reserves but was rejected by six of the eight Bundesbank board members. "It is wrong of the media to create the impression I wanted to sell gold and was rejected by the board," he tells the newspaper Die Welt in an interview to be published tomorrow." The gold reserves of the Bundesbank are part of our national wealth and have a great symbolic value to the population," Weber said. The Bundesbank announced today it will sell eight tonnes of gold to Germany's finance ministry but it has no plans to sell a further 112 tonnes it is allowed to offload in the first year of a five-year agreement on coordinated gold sales renewed in September. In the interview, Weber says the Bundesbank currently sees "no need to make use of the right to sell" a total of 120 tonnes of gold in the first year of the agreement. maria.sheahan@afxnews.comms/cw

***

LONDON -- Germany's Bundesbank, the world's second-biggest gold holder, will sell less than 7 percent of the amount allowed under a European accord, resisting calls to use bullion to help plug the government's budget deficit.

Eight metric tons of coins will be sold, the Bundesbank said in a statement. It was permitted to sell 120 tons of gold under an agreement that took effect in September, which caps annual sales by 15 participating banks at a total of 500 tons through
2009. The other banks will be able to use the Bundesbank's quota.

"We haven't taken a decision about 2005," Hans-Helmut Kotz, a Bundesbank board member, said today in an interview in Frankfurt. "That will happen some time next year."

German Finance Minister Hans Eichel said last week the Bundesbank should sell some gold reserves and use interest from the sale to fill the budget gap, Bild am Sonntag newspaper reported. Germany's deficit has exceeded European Union limits of 3 percent of gross domestic product for three years.

"We don't feel that we've been put under pressure by Eichel," Kotz said. Eichel expects this year's deficit in Germany, Europe's largest economy, to reach 3.75
percent of GDP.

Germany had 3,433 tons of bullion as of October, second only to the U.S. Federal Reserve's holding of 8,136 tons, according to the London-based World Gold Council. The International Monetary Fund has the third-largest hoard, followed by France and Italy.

The Bundesbank's board had been split over a sale, with President Axel Weber and Kotz in favor and the other six members opposed, the Financial Times Deutschland reported today, without citing anyone. The European Central Bank, the 12 euro-region central banks, the Swiss National Bank, and Sweden's Riksbank participate in the accord.

-END-

December 20 – Gold $442.10 up 70 cents – Silver $6.81 up 6 cents

Bundesbank Gold News Has Enormous Implications

Cautious, careful people, always casting about to preserve their reputation and social standing, never can bring about a reform. Those who are really in earnest must be willing to be anything or nothing in the world's estimation, and publicly and privately, in season and out, avow their sympathy with despised and persecuted ideas and their advocates, and bear the consequences...Susan B. Anthony

GO GATA!!!

Some things never seem to change. One of the rules of The Gold Cartel is to cap the price of gold on days when it should be the strongest and exuding the most excitement. Over the weekend and following Friday’s close, the news could not have been more bullish:

The COT numbers revealed the big specs short the euro and reducing their gold longs by 45,000+ contracts. The news about Mexico attempting to remonetize silver was circulated all over and then this morning this bombshell hits:

Bundesbank to Limit Gold Sales to 8 Tons in 1st Year of Agreement

By Laura Humble
Bloomberg News Service
Monday, December 20, 2004

http://www.bloomberg.com/news/markets/commodities.html

Reseach beinhaltet nichts Neues ....

Zaruma Resources sitzt auf beachtlichen Reserven in Südamerika!

20.12.2004 Redaktion - Commodity Stock Investor - Nr. 13/2004


Die Gesellschaft schloss erst Ende November eine Kapitalerhöhung in Höhe von 975 000 kan.-Dollar ab – der Grund warum der Kurs seit Ende August in einer Seitwärtsrange notierte. Wie wir vor kurzem in Zürich auf einer Investorenkonferenz von Chairman und CEO Thomas Utter erfahren haben, ist damit der Startschuss für die Arbeiten im El-Foco-Projekt in Venezuela gefallen.

Zudem kann man nun auch die Machbarkeitsstudie für die Gold- und Silbermine im mexikanischen San Antonio finanzieren. Läuft alles wie geplant, geht El Foco im kommenden Jahr in Betrieb. Und der daraus erzielbare Kapitalzufluss sollte allemal reichen, um das Herzstück von Zaruma in Mexiko in Produktion zu bringen – ein Gebiet, das es in sich hat: Eine Vorstudie weist abbaubare Ressourcen von 300 000 Unzen Gold aus. ZARUMA-Boss Utter ist noch optimistischer und geht sogar von einem Goldschatz von 500 000 Unzen aus. Und der Mann weiß, wovon er spricht, bringt er doch über 30 Jahre Erfahrung im Bergbau mit. Dieser Titel bietet erhebliches Aufholpotenzial. Holen Sie sich eine Erstposition ins Depot (WKN 886597, aktueller Kurs 0,095 Euro).

A note from an Illinois GATA supporter:

Gold Stock Fire Sale or Sell Google Buy Gold

Year end tax selling has killed many of the gold stocks. These specialists on the listed shares started shorting them when the selling began. The Canadian junior market has looked like a battlefield for the new investor the past 3 years. This is a new happening and many can’t handle it. You can either be stupid (unfortunately, like many) and sell or start buying. Listen class," Buy on bad, sell on good; Buy on weakness, Sell on strength." I’ve taught the only "Gold 101 Class" to brokers in America. The year end tax selling is about over, and I expect a great recovery in ’05.

Those stocks that got beat up the most should be the ones to buy, but not in every case. Look at undervalued companies that are increasing reserves or production with good management teams. $400+ Gold and Asia are the best two things that ever happened to the mining business. We are in the middle of merger mania in the industry. Financing is readily available. World wide production and exploration is going down and demand is increasing. Friday’s PPI, talked down by CNBC, was double the expected rate. For the record the PPI is up 5% the past year, the biggest increase since 1990. Inflation, deflation, stagflation—Who cares! Gold is the only real store of value in the world today.

So here’s a few to look at: KRY $3.55, the only 18 million oz. deposit I know of that is up for grabs. If you know another one, call me. GG $13.75, pays a monthly dividend, is the lowest cost mine in the world, has positions in over a dozen juniors, a great management. DROOY $1.61, almost 1 million oz. production per year, 1/3 of production outside Africa, and the most heavily traded gold stock in the world. Apollo Gold AGT $.86, operating mines in Montana and Nevada, and Black Fox (300K oz. production/year) on line in 26 months. Savoy SVYR $.30, has all mineral rights to an entire province in Northeastern China, a first that I am aware of. Queenstake QEE $.36, first day on AMEX on Monday, December 13th, 260,000 oz./year of current production in Nevada, making Queenstake the fifth largest gold producer within the U.S. What a deal!

I follow about 200 other Companies, Trusts, and Funds. Go GATA! Rich Radez (800) 285-1700 rradez@danoyes.com

None of us can know what effect the German gold news will have in the very short-term. However, The Gold Cartel must be sweating it BIG TIME! As oft-reported in this column of late, these bums are in DEEP trouble. The tide is turning against them. They are running out of gold to prevent the price from exploding. The crooks are running out of readily available supply just at the time demand for gold is taking off around the world. Murphy’s Law is kicking in. Couldn’t happen to a nicer bunch of self-serving devious lying rats.

On behalf of Chris Powell, the GATA Board of Directors and me, I would like to extend thanks to all those in the GATA ARMY who have worked diligently over the years to expose the gold fraud – so that the truth may come to light. You are making a difference. Time to pour it on these gold fraudster folks. We have them on the run. Let’s keep the heat on the bullies and expose them as the cowards they really are.

GATA also thanks so many GATA supporters for your financial contributions. It allows GATA to get the job done and win the day for all of us. On that score, the GATA prints are going out the door like hotcakes. We only have around 30 left and soon you won’t be able to have one of these 300 limited edition prints. We will be sold out. As pre-determined, the price will be going up to $1,000 from $750 after Christmas. More on this later.

GATA BE IN IT TO WIN IT!

MIDAS

While the battle rages on behind the scenes in Germany over their gold sales, the battle re the value of precious metals rages on elsewhere, like in Mexico, where valiant GATA supporter Hugo Salinas Price is leading an effort to make silver legal tender in that country.

Weeks ago I brought to your attention something significant was brewing regarding silver. The intrigue about what occurred has been extraordinary and is likely to remain that way for some time. The following email was recently sent to GATA’s Chris Powell by Hugo himself:

Dear Chris-

Thanks for your support! It is appreciated so much! There are NO national boundaries in this issue.

I cannot tell you what we are going to do, it would jeopardize our objective. As things are done, I'll be happy to let you know. When the Central Bank sends twelve honchos to a meeting, you know they have been losing sleep over this deal. Isn't that lovely?

By the way, they all looked very nervous. At least one of the men was on our side, we know that, but he kept very quiet wishing he wasn't there. What fun!

The Central Bank produced a long, long paper alleging falsities and contradicting itself. I could translate it, but it would be work. Just to show how they are at a loss to find arguments against silver monetization. Maybe I'll attempt it, along with a translation of our arguments in rebuttal of their position.

The Central Bank issued their remarks to the Ways and Means Committee in a paper without letterhead, signature, or date. Full of balderdash and ending with a study worthy of Harvard, complete with super-complicated equations to demonstrate - something which will not occur, implied by their own statements.

The paper was sent a few hours before the meeting of the Committee, when they had had years to give an opinion. Which means they were stumped and couldn't think of a cotton-pickin thing to say. But finally, they came out with their "Considerations", so now we know what they have to say, and it amounts to - nothing.

Great fun!

Have a wonderful Christmastime with your family and friends!
Hugo

JUST IN: The latest in a dispatch sent out by GATA’s Chris Powell this morning:

12:03p ET Sunday, December 19, 2004

Dear Friend of GATA and Gold:

Here's an English translation of the Reuters dispatch in German, sent to you last night, about the opposition within the Bundesbank to sales of gold reserves. Thanks so much to our friends who did the translating for us, especially since the story is much more favorable to gold than we were able to convey to you last night.

If the German newspaper on which the Reuters report is based, Welt am Sonntag, is correct, the Bundesbank's board is soundly opposed in principle to any reduction of Germany's gold reserves, the board has control over the decision, and the gold sales the market has been expecting will not be forthcoming.

I've not been able to locate the story on which the Reuters dispatch is based, but if any of our German-speaking friends feel ambitious, here is Welt am Sonntag's Internet site:

http://www.wams.de

A decision by the Bundesbank against selling its gold reserves will be, in effect, a decision to stop propping up the U.S. dollar, and thus it also may be a decision against continuing to subsidize America's domestic profligacy and its unnecessary warmaking. Will this decision encourage other nations to do the same?

Since this is Christmas, maybe we can hope.

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

* * *

An den Herausgeber der FAZ
Herr Jürgen Jeske
Hellerhofstraße 2 - 4
60327 Frankfurt am Main

Dear Herr Jeske,

According to the Frankfurter Allgemeine's September 7 article, the World Gold Council and its market analyst, Jessica Cross, dispute the Gold Anti-Trust Action Committee's findings about the dangerous size of the international gold loans, and they believe that there is no evidence of collusion to suppress the gold price.

As chairman of GATA, I would like to reply.

The article asserted that GATA has been unable to find a prominent law firm that takes our allegations seriously. This is incorrect. GATA has retained the firm of Berger & Montague of Philadelphia, one of the top anti-trust law firms in the United States…..

***

Instead of responding to debate with GATA, the World Gold Council chose to attack us in the media with falsehoods. Classy outfit this WGC.

This might help give newer Café members some understanding where the animosity to the World Gold Council comes from by many in the GATA camp, of which I am one. Instead of engaging the evidence GATA collected that something was very wrong with the gold market, they have fought us from day one. We realized early on they had no interest in exploring to get at the truth, only in protecting the interests of the establishment and their biggest contributors, the large hedgers like Barrick Gold and AngloGold. Independently, Frank Veneroso found the same. They refused to even meet with him to discuss his gold loan findings.

The straw that broke the camel’s back was when they came out attacking us after the German FAZ articles. Their dissing us was both offensive and unprovoked as the World Gold Council was not mentioned in the articles.

The efforts by the World Gold Council to discredit GATA were egregious and contained a number of blatant falsehoods. They laid down the gauntlet to us and it became crystal clear they could not be trusted. If some of you wonder why we have so many misgivings about their GLD, this review of how they went after GATA more than four years ago ought to clear some of that up.

We will probably never know to what extent and role GATA has had in preventing Germany from foolishly dumping their gold at incredibly low prices in order to foster a fraud by The Gold Cartel. However, one thing is for sure. GATA has had a far greater pro-gold impact in Germany than the World Gold Council has.

Another thing for certain….We know via the FAZ articles and the presentation on June 4, 2004 at the LBMA conference in Moscow by the deputy chairman of the Russian central bank, Oleg V. Mozhaiskov, GATA’s findings are taken seriously by influential individuals in the banking world. How ironic those very same findings are suppressed in the supposed capital of the world of free speech, the United States – where the name GATA is not even allowed in print by most of the major financial market publications, or to be mentioned by the television media. From my six years as chairman of GATA, my conclusion is America has evolved into one of the most hypocritical counties in the world. What a shame!

9/7 FAZ - "Die Verschwörungstheorie am Goldmarkt ist abwegig und falsch" / ENGLISH TRANSLATION

Finanzmärkte und Geldanlage

Donnerstag, 7. September 2000, Nr. 208 / Seite 33

"Die Verschwörungstheorie am Goldmarkt ist abwegig und falsch"

World Gold Council und GFMS: Die Argumente sind nicht stichhaltig / Kritik an Fehlinformationen der Gata (3. Teil)

bes. LONDON, 6. September. Die vom Gold Anti-Trust Action Committee (Gata) verbreitete Verschwörungstheorie über den Goldmarkt ist von dem World Gold Council (WGC) und Gold Fields Mineral Services (GFMS) zurückgewiesen worden. Bei einer Marktanalyse, die die Goldexpertin Jessica Cross für das World Gold Council vorgenommen hat, konnten nach Angaben des WGC keinerlei Hinweise auf eine Verschwörung von Marktteilnehmern oder dunkle Machenschaften entdeckt werden. Der WGC ist ein Interessenverband der goldproduzierenden Unternehmen, die

Der erste Teil ist am 25. August, der zweite Teil arn 30. August erschienen.
ENGLISH TRANSLATION:

"The Theory of a Conspiracy of the Gold Market is Misleading and Wrong."

World Gold Council and GFMS: Arguments are not valid/misleading information of GATA criticised.

Bes. London, September 6th

The Gold Anti-Trust Action (GATA) Committee's conspiracy theory of the Gold market is rebuffed by the World Gold Council and Gold Fields Mineral Services (GFMS). Market analysis by gold expert Jessica Cross for the World Gold Council (WGC) shows no hints of a conspiracy by market participants or market machinations, says WGC. The WGC is an association of interests of gold producing companies.....

* 9/10 Letter to FAZ in Response to Jessica Cross and The World Gold Council /GERMAN TRANSLATION

http://www.lemetropolecafe.com/pfv.cfm?pfvID=1150

Excerpt of GATA’s response:

9/10 - Letter to FAZ in Response to Jessica Cross and The World Gold Council /GERMAN TRANSLATION

Ms. Haruko Fukuda has developed an outstanding stewardishp executive role with the gold producer executives. However, it is a well known fact of those in the know that there is a big faction and split on the World Gold Council on what is really going on in the gold market. She knows that and we know that.

The Gold Anti-Trust Action Committee asks her to consider the following:

Dear Ms. Fukuda,

Your commissioned study, Gold Derivatives: The market view, by Dr Jessica Cross and Virtual Metals Research and Consulting Ltd is lengthy and detailed, but I believe it does a disservice to the gold industry and gold market participants.

The Gold Anti-Trust Action Committee (GATA) presented its own lengthy "Gold Derivative Banking Crisis" document to the Speaker of the House of the United States, Denny Hastert, Spencer Bachus, Chairman of the House Sub-Committee on Domestic and International Monetary Policy, Dr. John Silvia, Chief Economist of Senate Banking Committee and to every House and Senate banking committee member.

Last week, Frankfurter Allgemeine Zeitung, Germany's most highly regarded newspaper, wrote two articles about our document and that the content of what GATA has presented should be taken seriously. I have attached a summary in English of the first article and an English translation of the second one for your perusal…….

* 9/7 "Die Verschwörungstheorie am Goldmarkt ist abwegig und falsch"

http://www.lemetropolecafe.com/pfv.cfm?pfvID=1145

The FAZ articles on GATA created a firestorm in the gold world and were a prelude to the splash we would make during the GATA African Gold Summit in Durban, South Africa on May 10, 2001. A month after the FAZ articles appeared, GATA’s Reg Howe announced his stunning lawsuit against The Gold Cartel. The FAZ buzz can be fully reviewed by delving into The Matisse Table Library in 2000:

* 8/31 Frankfurter Allgemeine Articles (photo copy of full article in German)

http://www.lemetropolecafe.com/pfv.cfm?pfvID=1129

See summary above

* 9/4 GATA Challenges The World Gold Council And Jessica Cross To A Debate

http://www.lemetropolecafe.com/pfv.cfm?pfvID=1139

Summary:

FRANKFURTER ALLGEMEINE ZEITUNG
August 25, 2000

FRANKFURT, Aug. 24 -- At first glance it is indeed difficult to understand how a market, such as the gold market, which shows a chronic production deficit, is decaying during decades and how this results in prices that force an ever- increasing number of gold producers to abandon their business.

In the free market, which in the case of gold is being "made" by the leading business and investment banks, they have to take a good look at the solvency of their own clients as well their counterparties, when trading with derivatives.

It is GATA's opinion that there are indications pointing to a conspiracy among financial institutions to control the price of gold. The committee is intent to show that such institutions and bullion banks have accumulated enormous short positions in the precious metals markets. For reasons of speculation they are apparently short at least 10,000 tonnes of gold, compared to an annual gold production of only 2,529 tonnes in 1998.

Based on the assumed manipulation of the gold market, GATA concludes that this can pose a threat to the international financial system. For this reason GATA has distributed to the U.S. Congress a 118-page document entitled "Gold Derivative Banking Crisis" and requested a public investigation of the situation. The document can be retrieved from GATA's website under option "GDBC Report."

At the center of the committee's suspicions is the assumption that, under adverse circumstances, the short positions in gold derivatives of at least 10,000 tonnes could lead to panic-driven coverings -- that is, purchases that lead to more purchases. The committee sees the explosive increase of $84 per ounce in the gold price in the autumn last year as a prelude of what the market would have to face, should panic-driven short coverings occur. That price explosion got under way after 15 European central banks declared on Sept. 26 1999, that they would limit their gold sales and other precious metals operations for initially five years.

***

If this story is correct, and I am sure it is, the pro-selling gold camp in the Bundesbank is losing ground:

Jan. 17, 2004 (Bloomberg) -- The board of Germany's Bundesbank opposes a plan by its President Ernst Welteke to sell some of the central bank's gold reserves to fund research in Europe's largest economy, Der Spiegel said.

``Welteke won't get a majority for his proposal,'' the magazine cited an unidentified board member as saying. Only three of the board's eight members are in favor of the proposal, Spiegel said, citing the board member. –END-

Planted stories such as these do not appear by accident and are not superfluous. Three board members were in favor last January, only two now.

The mystery over the warring factions in Germany regarding their gold has been going on for some time. It all began, oddly enough, when back-to-back articles on GATA and gold appeared unexpectedly in Germany’s number one financial newspaper, Frankfurter Allgemeine Zeitung. This was in late summer 2000 with gold around $270, and GATA was pounding the table exclaiming the reason for the low price was due to a price suppression scheme. The stories surfaced out of nowhere and it was very apparent to all in our camp that some faction in Germany wanted others to know about GATA and what was really going on in the gold market. This clandestine faction wanted the GATA story to be disseminated more widely and to be understood.

We will probably never know what affect GATA has had on certain members in the Bundesbank. However, as a result of these articles and others written about GATA in various German magazines over the years, we know they are aware of what we have uncovered. It is reasonable to assume a number of these influential and concerned Germans are also aware of what the price is going to do in the future – what it would have meant to their country to dump gold at $270 per ounce back then and at $440 per ounce in the present.

No country is more concerned about runaway inflation than Germany, having experienced hyper-inflation trauma many decades ago. With the dollar tanking and the US doing nothing to change the trend, the implications could be ominous for financial markets in the months and years to come. This cannot be lost on those who grasp the fact that the gold price has been unnaturally suppressed for a decade.

A little review of all this, and of the ensuing flap with the World Gold Council, might help to put the latest intrigue into perspective:

This English translation summary of the first FAZ article was sent our way following its publication in German and with gold in the low $270’s:

December 19 – Gold $441.40 – Silver $6.75

Germany's Gold, GATA, Inside Scoop on Mexico/Silver

"Conscience is the knowledge someone is watching"
Larry Summers

Go GATA!

Yep, just what I least expected to do this weekend. Write a MIDAS. However, there is so much of serious interest going on, I felt it important to cover some of the landscape for you.

The mystery of what is going on behind the scenes as far as Germany and its gold is concerned continues to make waves. The Gold Cartel is counting on Germany to help it fill out the 500 tonne per year allocation Europeans are allowed to sell under the new Washington Agreement. Yet, this report surfaced over the weekend which put German gold sales in grave doubt (English translation by a Swiss Café member):

According to a report in the newspaper "World on Sunday" the President of the Bundesbank Alex Weber has failed in his plans to sell gold from the gold reserves of the Bundesbank before the end of his year.

Six of the eight members of the Bundesbank's Board of Directors turned down the plan, reported the newspaper without giving any details regarding the source of their information. Further this majority had fundamental objections to sales of gold reserves, which also puts into question any future reduction of the gold reserves. A spokesman for the Bundesbank declined to comment on the newspaper report.

Weber had previously announced that the Board of Directors would decide before the end of this year to what extent the already secured option on gold reserve sales of up to 600 Tonnes over the next 5 years would be exercised. The Bundesbank had secured this option under the agreement of the 15 European Central Banks, who want to gradually reduce their (partly) high gold reserves in a manner designed not to disturb the market. The Bundesbank has 3440 Tonnes of gold at its disposal, only the USA issuing Bank has more.

Gold declined on Friday in a thin and volatile market. The market was now tensely awaiting the details, expected in the next few days, of the planned gold sales by the Bundesbank, according to dealers. It was expected that 120 Tonnes per year would be sold each year over the next five years.

The Federal Minister of Finance, Hans Eichel (SPD), among others, encouraged the sale of the gold reserves. The Bundesbank is allowed to sell 120 tonnes per year, that bring approximately 1 Billion Euro, said the Minister to the Sunday newspaper "Bild am Sonntag", according to an advance report. However he did not want to force the Bundesbank into a sales decision. "That is the sole decision of the Bundesbank". Gold does not bear any interest, in contrast to the money resulting from a sale, which does earn interest. "I am eager to learn what the Bundesbank will do", said the Minister.

The profit of the Bundesbank flows into the Federal Budget. Eichel has budgeted for a 2 billion Euro contribution from the profits of the Bundesbank for the 2005 annual budget, which should help Germany for the first time after 3 years to restrain their budget deficit within the $ harbours risks for the Bundesbank's profits.

–END-

Stay tuned!

The gold share action remains dreadful. The XAU soared .07 to 98.33, while the HUI limped to a 1.01 gain to 214.89. Newmont fell 17 cents to $44.65 with gold up $5. This has reached the point of absurdity.

The better gold acts, the more the gold share light bulbs seem to go off. Gold remains one of the least understood and worst reported-on markets in history, most of all by the gold industry itself. We have a complete disconnect in the gold share market vis-à-vis what is going on in the gold physical market. As oft-stated here, the reason is very simple. Wall Street is mostly gold bearish. The gold market pundits with attending clients are mostly gold neutral to bearish. Who outside of a few in our bullish camp is out there telling anyone to buy the shares at the moment? How can the shares move up under these circumstances?

This is going to lead to a move up in gold, silver and the shares which is going to stun the investment community. The light bulbs are ALL going to go off at the same time. The coming advance in the gold/silver shares will be SPECTACULAR, and it will be swift. In retrospect months down the road, you will read much commentary on how obvious this all was.

This is a weekend for sweet dreams and one of preparation for Christmas and the holiday season.

GATA BE IN IT TO WIN IT!

MIDAS

This is the bombshell I referred to weeks ago. If it were not for allies of The Gold Cartel, the effort to remonitize silver in neighboring Mexico would have passed. Still might as some more time goes by on this significant issue. Anyway, GATA’s Chris Powell recaps it best:

5p ET Friday, December 17, 2004

Dear Friend of GATA and Gold:

Hugo Salinas Price -- businessman, philosopher, and Mexican patriot -- describes in the essay appended here the great progress being made in Mexico toward the remonetization of silver. He argues for what GATA has been arguing for -- giving people a choice of money and making money compete for people rather than the other way round. That will be, as Salinas Price suggests, the end of imperialism and the renewal of human liberty and dignity.

If only developing countries, particularly Mexico and South Africa, realized that their poverty is half self-inflicted, that they are actually sitting upon the most enormous and liberating wealth and need only to mobilize it against their exploiters. ...

***

Makes sense to me Nick:

Hi Bill,
It is quite amazing to witness so many of the "experts" becoming increasingly bearish on gold. Every passing day fewer and fewer of us bulls remain. So who knows? Perhaps the these "experts" will be right and we are set for a protracted correction. But then again, I've rarely witnessed a market that behaves according to the crowd's "certain" predictions. It is never that easy.

There is an old traders adage, "Markets resume their primary trends on dullness". This is one very dull market, indeed! As well, the bull will often resume its move with massive investor disinterest and disbelief. As you have been writing for some time, this gold bull is like a train that is rapidly being emptied of its passengers. Will the gold train leave the station with a just a handful of us partygoers on board? Perhaps its time I head to the observation car for a cocktail or two in anticipation of some great scenery along the way. All aboard?!

Cheers!

Nick Ferris
J-Pacific Gold Inc.
info@jpgold.com
http://www.jpgold.com
1-888-236-5200
TSXV Symbol: JPN
OTC BB Symbol: JPNJF

Input from London way:

Good afternoon Bill
I was interested to read Ed Steer's comments on gold and the HUI and the current position of the MACD and RSI. I have been watching from a slightly different perspective: the comparison between $HUI and $GOLD.

Here it is in chart form and, just as Ed says, both MACD and RSI are at low levels, and well below levels at which rallies in this index have taken place in the past. Each time the 50 day ma crossed above the 200 day ma there was a six month rally in the index and in the HUI.

[Blockierte Grafik: http://www.lemetropolecafe.com/img2004/SharpChart1217.gif]

If I were short gold shares and gold at this juncture I would be worried because the 50 day ma crossed the 200 day ma in mid-October (at around the same time gold broke above $433 and out of the handle of the teacup) and, although turning down slightly, the daily is now tacking back upwards toward the 200 day ma.

My guess is that this index will continue to strengthen and put in a run lasting around 6 months from when it breaks above the 200 day ma. When will that happen? Between now and yearend.
Best regards
Ian

PS
Forgot to mention that gold shares will outperform gold itself on this next move.
Ian