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A New 8-Year High Close For Gold



By: Bill Murphy, Le Metropole Cafe, Inc., LemetropoleCafe.com


-- Posted Sunday, 14 December 2003 | Digg This ArticleDigg It!

December 12 – Gold $409.20 up $5.10 - Silver $5.59 up 4 cents

Great works are performed not by strength, but by perseverance. He (or she) that walks, with vigor, three hours a day will pass, in seven years, a space equal to the circumference of the globe. ..Samuel Johnson

GO GATA!!!!

Right after gold closed yesterday, it popped in the Access Market trading and stayed firm all evening long. We came in $3 higher in The States when cabal forces did what they could to take gold lower, as always. The best they could do was to bring it down to $1 higher on the session. The STALKER and friends were waiting for them and it was up hill from there on in. For the first time in recent memory, gold has left a small gap. In another rarity, spot gold closed on its HIGH TICK.

Nonetheless, The Gold Cartel invoked its $6 rule for the umpteenth time. Gold was firm all day long when Secretary Snow muttered nothings about the dollar. Taking it as a signal the US would not intervene to stop an orderly dollar drop, currency traders sold the dollar:

NEW YORK, Dec 12 (Reuters) - The euro rose to new record highs at $1.2300 against the dollar on Friday after U.S. Treasury Secretary John Snow was reported to have said the dollar's decline had been orderly.

–END-

An already stout gold then took off for a few more dollars on the upside. The dollar closed at 88.46, down .43 and the euro rose .75 to 122.90, an all-time high.

I am continued to be struck by the lack of interest and understanding of the gold market. It is truly mind-boggling. Most everyone in the gold/investment world is working on the premise the central banks can unload gold any time they want to bury the gold price. In reality, they are running out of bullion because they secretly used up 1/3 of their reserves to artificially suppress the price for 7 years or more. They don’t have enough available gold to continue their scam, which is why the price is rising.

MIDAS and GATA have been pounding the table for years and have the evidence to back us up. Yet, most of the mainstream refuses to pay attention, or purposely evades the truth. Consequently, our camp is knocking 'em dead and making the right calls, while most other gold market participants are flailing away without knowledge of the big picture and the pivotal gold issue. How many times over the years have you heard me rant that if you don’t know what GATA knows about the gold manipulation, you really don’t have a handle on the real gold story? The most important factor in the gold market is to comprehend a bunch of criminals artificially rigged the price for many years and used up 1/3 of the central bank gold reserves to get the job done. The gold is GONE! This is what makes gold so EXPLOSIVE!

This email this afternoon captures what GATA has been conveying to any one who would listen for the last 5 years:

rock, paper, scissors

Bill,
The last few days movement in gold reminds me of a kids game called rock, paper, scissors (you probably know it. It is a guessing game where two people make hand signals representing the three objects). You win by outguessing the other person. Rock breaks scissors, paper covers rock and scissors cut paper. Anyway, it seems that for years every time the Cabal unleashed a flood of paper the market responded with a rock and dropped like a stone. Now, instead of a rock, the Cabal's paper is cut to pieces with scissors.

You have been the only source I have found that understands how and WHY the market has changed. I could see the gold market had turned back when it was $275, but it wasn't until I began reading Cafe Metropole that I understood why. In the last couple of weeks, those who don't yet understand have loudly given convincing and misleading explanations about why the gold bull market is about to take a "breather." As always, knowledge is everything.

Thanks again and have a golden holiday season.

Sincerely,
Peter Rhalter

Spot gold is less than $8 from making a 14-year high. If gold closes even at this level at the end of the month, it will be the third highest monthly close in 14 years. The charts look spectacular.

Gold daily
http://futures.tradingcharts.com/chart/GD/24Gold Weekly
http://futures.tradingcharts.com/chart/GD/WThis is the second or third highest weekly gold close in 14 years.

Gold has traded above $400 for ten days in a row. All attempts to take it below $400 during the last two weeks have failed. $400 has now become a base, a floor for the gold price.

The gold derivatives neutron bomb has not gone off yet, but the fuse is lit. At some point those with the massive short derivatives positions are going to be forced to run for the hills. The gold price will skyrocket in near panic market conditions.

Recently, I have brought to your attention several times how the Café Sentiment Indicator was so low – a 3 or 4. This past week was one of the quietest Café weeks in four years, with gold OVER $400. Compare that to early February when gold ran up to $388. The Café was going bonkers then. The low sentiment numbers have startled me, but given me more confidence than ever the gold price is going to go nuts in the near future. NEVER have I seen a market move like gold has and attract so little excitement!

It’s not just the Café either:

A golden wall of worry

By Mark Hulbert, CBS.MarketWatch.com
Last Update: 12:18 AM ET Dec. 12, 2003

ANNANDALE, Va. (CBS.MW) -- The gold timers I track at the Hulbert Financial Digest are not behaving the way they normally do.

And that's bullish for gold.

Normally, of course, we would be witnessing irrational exuberance right now on the part of gold newsletter editors. Gold bullion (38099902: news, chart, profile) convincingly rose above the $400 level at the beginning of December, and has been there ever since.

The last time the yellow metal was trading this high was in February 1996, nearly eight years ago.

But, far from becoming more exuberant, the average gold timer I track has become significantly more bearish.

Consider recent readings from the Hulbert Gold Newsletter Sentiment Index (HGNSI), which represents the average percentage portfolio exposure to the gold market among a subset of gold timing newsletters. As recently as earlier this month, the HGNSI stood at 65.4 percent.

As of Thursday night, in contrast, it stood at 34.6 percent, or barely more than half its level from earlier this month.

That precipitous a drop would be noteworthy in any market environment. But, given that it has taken place while gold has been close to an 8-year high, the drop is truly extraordinary.

Also extraordinary is the fact that the HGNSI is no higher today than where it stood in mid-March of 2002, when gold bullion was trading just above $290 per ounce. In other words, even though gold bullion has risen by nearly 40 percent over the past 20 months, the average gold timing newsletter I track is no more bullish today than then.

If the same thing were to happen in the stock market, the Dow Jones Industrials Average ($INDU: news, chart, profile) would have to rise to near the 14,000 level without any net increase in bullishness among stock timing newsletters.

What are the odds of that happening?

Contrarians no doubt will interpret the recent drop in gold sentiment to be very bullish. The current situation in the gold arena would appear to be precisely the wall of worry that they believe bull markets like to climb.

Of course, contrarians would not deny the possibility that a correction could occur at any time. But, given the quickness with which some gold timers appear to be running to the exits, they would argue that any such correction would likely amount to little more than a pause within a longer-term up-trend.

Editor's note: In addition to calculating the HGNSI, the HFD computes sentiment indices for the stock and bond markets as well. For more information on how to subscribe to daily or weekly e-mail updates of any or all of these sentiment indices, contact jkimble@marketwatch.com.

Mark Hulbert is the founder of Hulbert Financial Digest in Annandale, Va. He has been tracking the advice of more than 160 financial newsletters since 1980.

-END-

Amazing! Gold is making one of the great bull moves of all time and gold market participants can’t wait to sell and get out. The party is just getting started. The move so far is only "jacks for openers." Investors who have folded their hands are going to be very sorry.

It has been uncanny. Three times MIDAS has brought to your attention THE STALKER was in the market and three times gold has SHOT UP!

Platinum closed in new 23-year high ground at $817. That is where the gold price is headed.

The CRB, after a brief correction, is on a tear again. Besides gold and silver, crude oil is leading the way. JAN crude closed at $33.04 per barrel, up $1.19, up 3.55, another multi-year high. As mentioned in this column before, the rising oil price is attracting more and more Arab physical gold buyers.

CRB daily
http://futures.tradingcharts.com/chart/RB/14No gap in silver. It was rather subdued, but closed in new high ground for the move. No reason we shouldn’t see $6 silver fairly soon.

The John Brimelow Report

Friday, December 12, 2003

Indian ex-duty premiums: AM $4.87, PM $4.52, with world gold at $405.30 and $406.60. A little narrow for legal imports. Of course, that the question is even open underlines the key fact: India is becoming accustomed to +$400 gold.

Although world gold firmed up during TOCOM hours, going out $2.50 above the NY close, Japan had little to do with this. Volume was only the equivalent of 17,449 Comex lots (+2% on Thursday) and open interest slipped the equivalent of 732 Comex contracts. The active contract was up 6 yen. (NY yesterday traded 43,682 lots; open interest rose 661.)

Gold clearly withstood quite a serious challenge yesterday, especially in the early morning via Access. ScotiaMocatta says:

"Gold has remained steady despite significant selling in the past 24 hours. Comex access traded about 5,000 lots overnight compared to an average of about 2,000 lots. The metal started 404.30/404.70 in New York and soon drifted lower, reacting to a weaker EURO. Physical buyers and other bargain hunters appeared as soon as the metal broke below 403.00 causing a quick bounce back..."

This resilience seems to have surprised and impressed the Bullion bank commentators. Besides the presence in the gold equities of abnormally large numbers of year-end sensitive operators such as hedge funds, some of the cause of this week’s fragility in gold share prices is offered today by Mark Hulbert on CBSMarketWatch today. Hulbert points out that his measure of bulls amongst the Newsletters following gold halved this month to 34.6% and in fact stands no higher than it did in March of last year when gold was $290. These Newsletters are mostly equity players, so the readings fit neatly with the gold equity panic this week, and the fact that most of the bullion-focused surveys are on the high side.

JB

CARTEL CAPITULATION WATCH

The DOW continues to meander higher, closing at 10,042, up 34. The DOG was dragged along, finishing at 1949, up 7. In reviewing the stock market yesterday, I commented, "Still believe it is one big illusion." Still do. One day in the not too distant future, the market is going to come crashing down like a house of cards – probably when the temporary US Government/Fed stimulus runs its course. Incredibly, the dramatically sinking dollar has had no effect on the market. One day it will. Besides, based on what I have learned with GATA after 5 years, I don’t trust the numbers the US Government puts out on almost anything. Neither does Bill King:

From The King Report:

Worse than expected joblessness was offset by gov-reported good retail sales that contradicts industry figures. Operators still control the markets, so fundamentals are still subordinate to daily machinations and events. Stocks rallied early on a dollar rally and the retail sales. However, the major event was the FOMC Oct minutes that read the Fed sees "large margins of unemployed labor until 2005" and the expansion is "atypical." Translation: The economy is not as jiggy as some pundits proclaim. So the Fed can keep rates low for eternity. Eurodollars staged a big rally. They had already expunged the expected spring hike, so yesterday they started to expunge the summer and hereafter hike.

A meager 0.1% better than expected retail sales (ex-autos) [though we don’t know how much discounting occurred] was an excuse for operators to ignore a worse than expected jobless reports (378k vs. expected 358k). But inquiring minds what to know why the government numbers contradict industry numbers. Remember all those disappointing retail sales reported by the industry? Well, unadjusted retail sales fell 1.5% in November. Again, government legerdemain is at odds with industry reality. Now catch this from the report, "The margin of sampling error, as included on page 1, gives a range about the estimate which is a 90% confidence interval. If, for example, the trend estimate is +1.2% and the standard error is 0.9%, then the margin of sampling error is ±1.65 x 0.9% or ±1.5%, and the 90% confidence interval is -0.3% to +2.7%." And the gov does NOT adjust for prices. http://www.census.gov/svsd/www/fullpub.htmlDirect from the jobless report: "In the week ending Dec. 6, the advance figure for seasonally adjusted initial claims was 378,000, an increase of 13,000 from the previous week's unrevised figure of 365,000… UNADJUSTED DATA The advance number of actual initial claims under state programs, unadjusted, totaled 490,406 in the week ending Dec. 6, an increase of 133,566 from the previous week." Somehow CA jobless claims fell 19,629 due to a short work week. http://www.workforcesecurity.doleta.gov/press/2003/121103.html

-END-

Speaking of not believing numbers. The PPI for November was down .3%. Huh? Commodity prices were climbing sharply.

The US trade deficit failed to shrink again, with the October number registering a $41.77 billion dollar deficit. The dollar has been falling for two years and it hasn’t reversed the deficit yet. Not good. How low will the dollar need to go before it is substantially reduced? Foreigners buying US debt can’t be too happy. That has been a losing play, especially this past year.

The disappearing dollar is having some effect already:

NEW YORK, Dec 11 (Reuters) - Treasuries prices were knocked lower on Thursday after an auction of new U.S. government debt attracted disappointing demand, including from foreign central banks.
Indirect bidders, which include foreign central banks, picked up just 24 percent of the issue, way below last month's 38 percent and off the 29 percent average of the last four sales. Traders had been hoping for stronger demand given some offshore central banks were thought to be buying dollars to fight an export-damaging rise in their currencies. –END-

Says Cafe member Rich from Toronto:

"The Michigan current conditions index dropped heavily, to 93.6 from 102.5, a shock given recent upbeat data on job creation and the rallying stock market that are often thought to influence consumers' moods."

It was expected to RISE!

GATA’s Mike Bolser:

Hi Bill:
The Fed added $3 Billion in repurchase agreements today 12/12/2003. This action returned the repo pool to is still upward 30-day moving average so we must continue to expect DOW strength which will also continue to confuse those who cling to standard technical analysis in an government interventional investment world. The pool total is now $34.39 Billion and the daily Fed web resource links are as follows:

Fed Permanent market operations:
http://www.newyorkfed.org/markets/permanent.html

Fed Temporary market operations:
http://www.newyorkfed.org/markets/omo/dmm/temp.cfm

These links will serve those readers who wish to follow the day-to-day actual releases, they are usually posted by 10:30AM each day.

Technical Analysis

I have written before that the central premise of technical price analysis is based upon an assumption, according to Prechter, that there exists in free markets a changing balance between greed and fear and strictly interpreted, this is true. The record of successful examples is a long one but fails when governments sense a national interest is at stake. Precious metals and other strategic commodities are such items that government fear and have moved to control.

Long-term TA of the gold price fails to account for the many years in the early history of the US when the gold price was officially set by the government. Were these periods "over bought", "over sold"? Which "wave" were they under?

When applying a thesis to a data set an investigator does not have the luxury of deleting data that doesn't fit the hypothesis in order to make one's ideas seem true. Accepted scientific practice demands that all data be presented and subjected to the thesis for validation. Elliot wave analysis fails to do this in the all-important gold and silver commodities.

The above does not diminish the trading floor, sixth-sense skill sets of many savvy operators such as Kenny Adams and Jim Sinclair and especially our own Bill Murphy. Skill sets that serve them well.

Today's false rally in the DOW is fueled by the Fed's primary dealers use of repo funding and not by any "fundamentals". The economy itself is being over represented by glowing growth reports of productivity gains unfortunately due mainly to employments cut-backs. One can see the proof of this in the Administration's clamoring for the Chinese the revalue upward their currency­an unlikely event, although any deal is possible these days.

The trade imbalance can no longer be ignored as the dollar responds downward.
Mike

Houston’s Dan Norcini:

Samex! All I can say is "WOW"! The stock closed up 27% for the day at $1.09. Great googly-moogly... Today's move in gold has to have left the cartel reeling. This is the worst possible development for them especially after the Barron's article, the Aden sisters, Leonard Kaplan, and the re-emergence of the Prechterites to crow like roosters once again. In spite of all the negative press gold had going for it with the hatchet job these ninnies were attempting, it shrugged it off and blew up in their face. When gold closes over $500, Prechter might possibly turn bullish. Won't that be farsighted!

Next week could prove to be very exciting. There still remains plenty of room for the specs to pile into this thing if they so desire and with the second weekly close over $400 in as many weeks, the technicals could not be any better. This will only serve to further embolden the funds and the small specs.

Isn't it amazing what gold can do when the community refuses to be stampeded and stands their ground? It is the shorts that have to run. If we could just get this down and learn to ignore the perma gold bears and dismiss them for what they are (stubbornly wrong-headed, fear-mongers), the fireworks would begin in earnest as buyers would begin tripping over themselves to buy instead of the normal pattern of panic selling.
Dan

More from Dan on the gold Commitments of Traders data released this afternoon:

Bill:
It looks like we are beginning to see the first chink in the armor of the cartel judging from the Commitments Data as well as the daily release of the open interest figures. Total O.I. stood at 276,302 as of this Tuesday compared to 278,759 for Tuesday of last week or a reduction of 2,457 contracts. As of yesterday (Thursday, Dec 11) the open interest stood at 275,596 for a further reduction of 706 contracts. What is significant about all this is the fact that the data reveals a substantial drop in the Commercial short category of nearly 11,000 contracts in the last two weeks. TRANSLATION - the cartel is beginning to cut their losses and run. Judging from the price action in gold today, I would venture to say that they are running even further and I would not be the least bit surprised to see a further reduction in that category next week. Why this is so significant in my opinion is that for the last few years, the gold cartel has been the only significant short in this market. It is their forced exit which you and I and many others have long been awaiting which will propel the gold price substantially higher in the near future. I see nothing in the way of this market and $450 and they exit. What we also need to keep in mind is no one really knows when Barrick is going to be buying back those hedges or theirs either. They might be in the process of so doing or they might not hoping they could get a swift setback in price and then cover. Typically as what happens in the commodities markets, when everyone is expecting something to happen, it never does. So much for the drivel from Kaplan and others that the funds are overextended. What a joke! It is not the funds that are running, it is the commercial shorts and the specs are handing their heads to them on a proverbial plate.

What is remarkable to see is the increase in the shorts attributed to the fund category. They have added more than 7,000 new short positions while adding a bit less than 6,000 next longs in the last two weeks. Looks like they were selling to some of the commercial shorts who were buying. The funds are still some 11,000 contracts shy of their recent peak in longs reached back in September this year when gold was trading near $380 and here we are with gold some $30 higher and plenty of room for them to pile on more longs and force out these new shorts by some other funds.

All in all, we have one of the most bullish setups I can personally remember in any market - our commercial signal failure appears to have begun. The release next Friday will help confirm one way or the other.
Dan

Richard Russell has as sound an approach to this gold market as anyone out there. From his last night’s commentary:December 11, 2003 -- I'm starting this report with an e-mail from a subscriber that I received this morning.

"You have been dead right on losing your position if you trade these golds. They are not tradeable and they should not be bought on margin. You have to buy them, pay cash for them on huge dips. The golden rule is you are either out or in -- never in between. We are either in a long term bull market in gold or not. There simply is no wishy-washy here. The people that bought stocks in 74 and 82 made huge money. The people that bought the bank stocks when there was blood in the streets made huge money. The people that bought the drugs when the Clintons put blood in the streets made huge money. The people that bought Texaco at 20 when it was paying 10% never saw it there again or Phillips at 9. We are not going to see CDE at 65 cents again or HL at 75. Most serious speculative bull markets go to 20 times the starting price. A twenty bear market is over. Everything is going up in price and in most cases it is 20=25%. So will the golds after this retracement. You are dead right. This will be a long-term gold bull that young people 55-60 can really retire on, and then convert back to income. It may be the only way a lot of people will be able to retire is to buy golds."

Russell Comment -- That's the bull's argument, which is "Don't trade 'em." The positive of that stance is that you keep your position. If you're gold position is say 25% of your assets, and your gold stocks decline by a fat one-third, your total assets drop 8%. If you can't stomach that, if it keeps you awake nights, then for the sake of your health -- well, you just have to cut back. Me, I'm sitting. I have my orders.

-END-

The savvy Nick Ferris sends his thoughts:

Bill,
The markets are very eerie. It is obvious, at least to me, that the Fed/Treasury is monetizing practically all the markets. One would logically think that the huge commercial loses in gold derivatives will simply be paid with a secret emergency delivery of "money". Heck, sell options, trade futures, play the emotions of the paper specs, and if you still lose, Big Daddy will come to the rescue with his wheelbarrow full of Dollars.

I continue to hear the theme that gold is "due for a correction" and "I'll be buying shares on the break when values become more realistic". The "experts" have issued their edicts and are telling their followers to lighten up or just get out. I read Hoye's analysis and it was an excellent presentation. He may well be correct that gold will retrace back into the $380 range before the big liftoff. However, one factor he relies upon in his analysis is the COT. Like most others, Hoye does not address the possibility of a commercial failure signal and the resulting melt-up.

Investors should be aware that riding a bull market is like riding a live bull. It will snort, growl, pace, run, stop suddenly and do every contortion to buck you off into the dirt. To make the big money, you have to hold and be very patient. It is easy to get too close to the markets or to a certain group of companies and tune out the bigger picture. Once they sell their position, most retail investors do not have the mental ability to admit they were worng and replace the position at a higher price. This bull market has just begun and do not let the bull buck you into the dirt.

Nick Ferris
J-Pacific Gold Inc.
nferris@jpgold.com
www.jpgold.com
TSXV Symbol: JPN
OTC BB Symbol: JPNJF

This will get the gold bugs chattering - from www.urbansurvival.com:

Gold: Confiscation Move Begins?

A number of banks, Washington Mutual, Sterling Savings Bank, and Venture Bank among them, reportedly have sent out "Changes in Terms" notices to all of their customers. As of January 1st say the reports, you won't be able to store cash, or gold or silver in your safe deposit boxes! I've written to Washington Mutual for a comment, but haven't heard back from them yet. Most people don't even read the "change in Terms" because it's not a negotiated thing. You accept the terms or find another bank. So these "notices" usually get "round filed" without reading. Except by our sharp-eyed readers.Confiscation set up? The fine print and a few scattered calls seem to indicate that this is being done under the disguise of "National Security", but it's a far stretch for us to figure how our small pile of coins in a safe deposit box constitutes a threat to the country. Unless the buck is in bigger trouble than we ever thought - and judging by overnight currency moves, that could very well be the case!

Please call your bank today, and ask them if it's true that no bullion/coins/currency will be allowed in their safe deposit boxes starting January 1st. and then file a report by clicking here. If it turns out to be true, one could infer without being written off as a Looney (a crazy person, not the Canadian coin) that the events of post 9/11 are being used to set up gold confiscation. Especially when you couple this development with reports that Homeland Security has sneaked through authority to force all gold sales books - including coin shops - be opened for federal inspectors. How would you set up confiscation? Like I need a safe deposit box for storing my car titles and such? That's why cars are registered and we have things like lost title reports and the like.

We might be at that place I warned of couple of years ago, when I advised readers that as we buy gold (at $260) it should be in U.S. Eagles or Canadian Maples because the Eagle is coin of the realm - and harder to confiscate, and with NAFTA, if there is a shiny side to that beast, it may be that having a little Canadian money around the house is excusable. The no brainer investment of a lifetime? Investing in a home safe mounted in lots of concrete and rebar that you don't talk about.

-END-

Have Mike Norman of www.street.com, Jim Cramer of CNBC and Robert Prechter covered their gold shorts yet? Jesse alerts us to one of the "Prechterites" who seems to have reversed course:

Pardon me while I pass out...

Steve Hochberg of EWI is debating Bob Froehlich on Bloomberg's Bull vs. Bear.

Froehlich is trotting out his old tired CNBCisms like 'big money on the sidelines in money markets.'

In response to this, among other things, Steve Hochberg said and I quote "People had minds. They do not need to put their money into stocks. They can put it into real estate. They can put it into gold."

GOLD! From the mouths of babes and Prechterites. Do I sense some dissenting opinions in the waving ranks?

-END-

China to issue silver export permits on Dec 15
Friday December 12, 5:19 am ET

HONG KONG, Dec 12 (Reuters) - The Chinese government is expected to issue 2004 export permits for silver to selected Chinese firms on December 15, industry sources said on Friday. In early November, the Ministry of Commerce said it would allot export quotas for 3,050 tonnes of silver for 2004, up 39 percent from 2,200 tonnes allotted this year.

–END-

Gold may be the worst analyzed market in history. Again, it is because those in the gold industry refuse to deal with the gold manipulation issue. Most of the gold analysts, etc, have been bearish to neutral all the way up from $255. Some of the latest inanities:

Bill,
Just pulled this off of thebulliondesk.com. These "analysts" must be on drugs...

"Gold is likely to trade in a range between 340 dollars an ounce and 420 dollars an ounce in 2004. Current gold prices are pricing in a US economy that is going to fold, but signals are that it will recover in 2004, especially in the second half," said Johannesburg-based Investec analyst Leon Esterhuizen.

"Gold is set to move higher first - maybe to 425 dollars an ounce - before declining to about 380 dollars an ounce in the second half of 2004. The momentum in the gold market is for the metal to move higher. The outlook for gold is higher, but not too much higher," a London analyst said.

In the second-half of 2004, the US economy is expected to recover.

Investment bank Merrill Lynch sees a lot of support for a higher gold price, with market sentiment and a weak US dollar suggesting that the bullion price could reach 450 dollars an ounce.

For 2004, Merrill Lynch sees an average gold price of 388 dollars an ounce, 365 dollars an ounce in 2005 and 350 dollars an ounce long-term.

The recent seven consecutive quarterly declines in the global delta -- adjusted hedge book came to an end in the September quarter when there was a moderate increase in the world position -- the first rise in the global book since September 2001, according to Gold Fields Mineral Services.

***

Derek

From ABC Online, a bullish forecast is pooh-poohed by another bullion dealer:

Posted: Fri, 12 Dec 2003 9:40am AWST

Doubt cast over gold price forecast

A new report predicts the gold price will hit $US500 an ounce by the end of next year, but Western Australian based analysts are not so optimistic.

Fat Prophets has forecast the precious metal will rise from its current price of $US404 an ounce to $US500 within a year on the back of limited new supply and growing global demand.

But Paterson Ord Minnet believes the gold price will retreat to under $US400 next year.

Resource analyst Alex Passmore says it is unlikely gold will go up by almost $US100.

"That's quite a large...increase isn't it and I just can't see central banks and large holders of gold not selling off at...the mid-$US400 level or lower than that," he said.

-END-

The gold shares were higher, but sold off late. The HUI ended only 2.44 higher at 237.82, while the XAU closed at 106.67, up .66. My guess is it was leftover selling from a few days ago – those who missed their chance to sell earlier in the week took their opportunity to do so today. Another sign of complete lack of conviction in this move.

It is no fun losing thousands, tens of thousands, or hundreds of thousands of dollars on the gold share setbacks. However, if you want to make a killing, this is exactly what we all must do until the public begins pouring into the gold shares. When this happens, these shares will become very overextended in the short-term, which will present a time to lighten up for awhile. We are not even close to this stage yet.

This is why it is so important to know what GATA knows, about where the gold price is going in the months and years to come and why. Not only know, but believe and invest accordingly. Without a solid foundation like this to base your investment decisions on, it is too easy to be shaken out of position. Very few of those who do so will be along for the home run ride.

Gold is knocking at the door of 14-year highs. The 410 to 420 price level has repulsed all rallies during that time. One of the reasons there has been so little gold hoopla and diminished bullishness by many market participants at these levels is because the US stock market has been steadily rolling along. The average investor associates a gold rise with a crisis, inflation, stock market debacles, etc. The average US investor is not paying attention to the tanking dollar. It doesn’t affect the average American on a daily basis. The American investor is constantly told there is no inflation to worry about. He sees our stock market going up on a monthly basis and is very mellow. He sees no reason to buy gold when there is no inflation, no crisis, and the stock market is rising. On top of that Wall Street steers everyone away from gold and the big name bullion dealers are perpetuating a fraud in which they are short. Thus gold can make 8-year highs, and almost 14-year highs, and it is a non-event to most Americans.

Except for the weakening dollar, gold has made it this far on its own. The way I see it, the odds of a financial crisis, inflation and a stock market debacle are quite high in the coming year. The structural financial problems in this country are worsening for the most part, not getting better, even after 14 Fed Funds rate cuts. When a financial crisis, inflation, or stock market debacle makes the scene, the American public will turn to gold. By then, gold might be $450 or $500 per ounce. They will be part of the buying force which will eventually send gold to $800/$1,000 per ounce, or higher.

GATA BE IN IT TO WIN IT!

MIDAS

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-- Posted Sunday, 14 December 2003 | Digg This Article




 



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