GO GATA!
The gold fundamentals are a "10" … as good as they get. Points of the day:
*Gold was battered again last evening in Tokyo. That was nothing more than margin call, panicked spec long dumping, as a carry over from the Comex drubbing.
*Gold and silver were very oversold technically and due for a healthy bounce anyway.
*Yesterday’s pronouncement by one of the top European bullion bankers that we will not see gold prices in the $620’s again for many years is likely to prove to be spot on.
*"The CEF premium jumped up to a whopping 13%, highest I've seen it all year. It had plummeted to about 3% a few weeks ago, so I sense that the smart money knows this (as in the shares) that we have roughly bottomed for the year. " Andy.
*The sentiment numbers are astonishingly bullish:
Bill,
Mark Hulbert’s HGNSI index has plunged to an astonishing 1.8%. The bottom is in.
Cheers
Adrian
http://www.marketwatch.com/News/Story
*The low open interest numbers for both gold and silver are VERY friendly and are further indications of sold out markets. Yesterday the gold OI fell another 5420 contracts to 287,061, which is around 86,000 contracts off its high. The market is washed out from a big picture sense.
The silver open interest dropped 508 contracts to 109,730. Both gold and silver have dropped about the same percentage-wise off their highs. Silver should be washed out too.
*Silver appears to have put in a serious double bottom technically:
Bill,
On April 3, silver bottomed at $11.59. Today it touched $11.60 and turned up. Interesting, isn't it?
Best wishes,
Peter R.
*The outside market action was very gold positive:
*Crude oil has put in a classic rounded bottom and looks ready to take out $75 per barrel. It surged today, up a healthy $1.99 to $72.30 per barrel.
July crude oil
http://futures.tradingcharts.com/chart/CO/76
*The dollar fell .71 to 84.04. The spot euro was up 1 to 129.20, which puts its price at the HIGH for the move, while gold is more than $100 off its high.
*July copper closed at $3.59, up 12 cents per pound. I cling to my notion that the Chinese have tied up metal supply of all kinds. Therefore, the move up in the metals is nowhere near the bubble most think it has been.
*The other base metals such as aluminum, nickel and zinc were all higher. While all have corrected, there is no sign of market collapses.
*The CRB, by much higher energy prices and weather inspired grain/soybean price increases, took off, gaining 6.93 to 350.05. If US weather goes into crop reduction mode and stays there, the CRB should take out its high of 365.40. July beans were up 22 cents to $6.09.
*The geopolitical news was very supportive too:
09:05 Iran will press on with nuclear enrichment -- Reuters
Citing a senior Iranian nuclear official. July WTI $71.21 in overnight session.
* * * * *
What a farce this Condo Rice/US approach to Iran has been. The US knows the one thing the Iranians will not tolerate is an unconditional nuclear enrichment cessation, so that is what they propose and Planet Wall Street jumps up and down. The Iranians’ response today was the same as yesterday’s. They were provoked and they let that be known.
Yet, yesterday the DOW took off. Today this news was blamed for the US stock market going down. More banana head stuff. This was already old news. The real story is the US economy is in trouble and disappointing economic news day after day is not good, no matter how it will affect the Fed’s interest rate decision later this month (more below).
*The yield on the pivotal 10-year T note tanked, dropping to 5%, as did other US interest rates on the lousy US economic news. Lower rates are gold supportive.
*Today’s early run-up and early sharp pullback is typical for markets which are so demoralized due to prior brutalizing downside price action. The good news for gold is it filled its opening gap and turned around. The reason: GOLDMAN SACHS was the featured buyer, along with HSBC.
Later in the day the emotional, or forced, selling dried up and there was little for sale as the day wore on. Funds that came in to buy, were forced to pay up … a good sign.
*The Gold Cartel and other major shorts remain that way. This dip allowed them to do some covering and average down losses with their futures trading, but they have a long way to go in order to extricate them out of their massive positions. That is ahead of us.
*The COT gold report was bullish once again in that it revealed how the specs are running from this market. The large specs reduced longs by 10,772 contracts and reduced shorts by 1,161 contracts. The commercials increased longs by 17,883 contracts, while increasing shorts by 8,189 contracts. It is important to keep in mind this number was of last Tuesday, or before the following shrinking of the OI by 30,000 contracts.
Gold corrected more than $120 off its highs, a correction of that magnitude I did not see coming. No surprise. I have missed the last 6 out of 7 corrections. 
Having traded commodities for so long, it continues to amaze me how gold is the only market I have ever heard of when the mob (I mean almost everyone) calls for a correction, and it happens. Other markets just do not accommodate herd thinking such as this. Of course, we know why. Other markets don’t have an existing cartel, backed by the US Government, BIS, Bank of England, and IMF working in concert to take the price down.
While always trying to be as helpful to Café members in every way possible, the short-term trading aspect is not what I bring to the gold/silver table. My role is very simple and has been for more than 7 years:
*Exposing the corrupt Gold Cartel.
*Understanding and explaining what their price suppression scheme has meant and what it means for gold prices specifically.
*Highlighting the fact that, as a result of what these bums have done, we are in the midst of a historic market move to the upside … with $3,000 to $5,000 per ounce as a reasonable objective for the price of gold.
*To urge Café members to do their homework (the GATA DVD at http://www.Goldrush21.com) is an absolute must to view and stay the course.
*To be a one trick pony as for as pounding the gold investing table … to assist Café members make a great deal of money and fortunes in some cases.
*So far so good. Since the early days, gold has risen from the $250/$300 level to a high recent of $740 and change. Silver from $3.60 to nearly $15. Gold/silver shares bought for pennies from the get-go are now selling for dollars in many cases.
*The percentage move up in many of the smaller gold and silver shares in the years ahead will be similar to what we have seen over the last five years.
*The dollar gains will be far greater. For those who have found the right smaller gold and silver stocks, you have a bonanza coming of epic proportions.
Bottom line:
*It won’t be long before those following the above program will find their equity in this sector moving into new high ground.
More gold goodies:
Indian ex-duty premiums: AM $10.13, PM $2.34, with world gold at $619 and $630.30. Lavishly excessive, and a little narrow for legal imports. The morning value happened to coincide with a the spikedown low for the day’s gold range, but to varying degrees all the importing cities were well able to act, the first time this has been seen for over a month.
The Bombay Stock Exchange managed to rally 3.77% today and the rupee also firmed further, closing 1% above the week’s low.
A return to normal conditions in India could be decisive for the tone of world gold. UBS today supplies an interesting chart (attached plotting Indian gold imports against the 1 year rate of change in world gold (a concept which needs thought).
The outstanding conclusion is the amazing vitality of consumption on even a modest slowdown of the rate of price appreciation. Unless world gold rises rapidly, that is what the dealers will be facing as the summer wears on.
Japan continued to liquidate. On volume equal to a very heavy 71,478 Comex lots (+38.9%) open interest dropped a further 14.8 tonnes (4,769 Comex lot equivalent) – Mitsubishi’s data implies a 10.7 tonne cut in the public’s long. The active contract closed down 14 yen – a recovery from the day’s low 55 yen lower – but world gold went out virtually unchanged from the NY close at $628.40, up $5.80 from the open.
For Japan to exert explicit influence on world gold, as it clearly has done this week, is not common. Usually it is quite brief.
In NY yesterday, gold in fact spent most of the day trying to rally from the initial follow through from the European morning’s slide. On volume of 67,281 lots open interest dropped yet again, by 5,420 lots (16.9 tonnes). Other than August 31 last year it has not been here (287,061) or lower since gold bottomed in the $420s in July- early August. Late July 2005 is also the last time MarketVane’s Bullish Consensus was at last night’s reading of 65%.
The GLD ETF continued to demonstrate independence by reporting a another increase in gold holdings -4.32 tonnes.
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