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-- Posted Thursday, 5 February 2004 | Digg This Article
February 5, 2004 - Gold $398 down $2.80 - Silver $6.10 down 3 cents Cabal Stomps On Gold Despite Early Dollar Weakness/The Real Outrage! "The modern mind dislikes gold because it blurts out unpleasant truths."
Joseph Schumpeter
What more does anyone need to see to understand the market manipulation in gold, silver and the shares is not only very real, it is very pervasive? For the third time in four weeks we witnessed blatant price orchestration. It began late yesterday in the shares when the HUI mysteriously dropped almost 6 points after gold closed nearly two dollars higher on the Comex session. It was very odd. Often, in the past, it has been a signal the crooks had been informed to sell the shares in advance because gold was to be taken down the next day in decisive fashion. A fellow Café member saw it coming last evening after I noted: "....longs can't wait to sell" BS, Bill. We are up against incredibly powerful market manipulators that are doing EVERYTHING they can to keep the lid on gold, silver and precious metal stocks. As I indicated previously, they are always pushing pm stocks--particularly once they have the gold market closed (and handled). When ever a HUI index stock threatens to push its head
up, bang, bang, bang. Don't blame it all on the dolts owning pm stocks who can't see what is going on. I find it hard to believe, that day after day, an hour before the close, with gold up a little, they suddenly all decide to sell the HUI stocks. –END- RW is correct. I thought of that too, however, hesitated to go overboard on it since I am so predisposed to account for the peculiar downside price action to the price-rigging crowd. When I awoke this morning, it was all too clear. The dollar was down 30, the euro up 50 and gold down $2. This, after gold has already been severely beaten up by the cabal for a month. The fix was in and it has nothing to do with the London Fix. So much for the gold price having anything to do with what the dollar is doing. Morgan Stanley was a major seller during the Comex session. Thus far I am wrong about the price going back up and dead right on the reason why. The only reason the latter gives me any degree of comfort is that it might finally wake up the brain dead about what is going on in the gold market. It is an outrage and disgraceful. This particular gold market manipulation is a distortion of what is really going on behind the financial market scenes. All is not as well as the Bush Administration is painting it to be. Gold, the barometer of financial market health, is being artificially suppressed to the advantage of a bunch of crooked bullion bankers and deceitful government types. These corrupt machinations are only delaying the inevitable. The US financial markets will eventually go into convulsions. The average American will be stunned and want to know how it all could have happened? This is why all of us must write Eliot Spitzer and the CFTC, not that the CFTC will do anything, but we must put each commissioner on notice that we are holding them personally responsible for their gross negligence to properly supervise the silver market. I would love to cite their unbelievable unwillingness to investigate the silver market as criminal in nature if we can go that far. It ought to be. These commissioners are in total violation of the public trust. Why I am continually surprised what The Gold Cartel will do is beyond me? There is a very controversial G-7 meeting this weekend, the results of which must be known already to the players involved. Whatever those results are, the US, and maybe others, wants gold down ahead of any announcements. Market fundamentals mean nothing when the cabal is intent on going into action. The pundits always cite dollar weakness as the reason for gold strength. Yet, the dollar is less than 2 points from making a new low, while gold is $32 off its high. The silence of the pundits who constantly pointed to a weak dollar as the essence of the gold price rise is deafening. Then we have President Bush, who is all of a sudden hurting in the polls, making his first talk show appearance in three years on Sunday with Tim Russert on Meet the Press. Bush is not going out to the public because he is a happy camper. He is feeling the heat. As we all know, the public associates a rising gold price with financial market/economic negatives. Thus, the gold price must be taken down. Certainly, gold’s retreat has been ordered by those at the highest levels of the US Government and carried out by the PPT/GoldCartel/Working Group On Financial Markets. Ironically, the dollar rallied back well after gold closed after Fed Governor Bernanke spoke about a bunch of nothings. The yen jumped to 105.80. The dollar closed at 87.12, up .14 after trading closer to 86.46 most of the session. The euro ended only up 10 at 125.30, after making a high at 126.25. The gold open interest only dropped 910 contracts to 235,602, which further suggests the spec long liquidation phase is ending. The spec open interest has dropped over 65,000 contracts. The question now is whether The Gold Cartel is attempting to induce spec shorting? Silver held its own and might have rallied nicely if not for the attack on gold. At one point, it was 6 cents higher. The low was $6.05, leaving the recent gap at $6.01 still unfilled. The silver open interest rose yesterday 1155 contracts to 108,587. This suggests buyers want in above $6 and gives us further proof there are willing purchasers out there looking for much higher silver prices. Gold closed on it its low for the move down. The US authorities clearly want gold to stay off the financial radar screen and are doing their best to bury it. Since gold and the dollar have completely diverged as of late, it will probably take a surging physical market and/or outside market events to send gold back up. The John Brimelow Report End of the Euro? Thursday, February 05, 2004 Indian ex-duty premiums: AM $7.02, PB $7.17, with world gold at $400.25 and $399.25. Ample for legal imports. The rupee edged to an import-facilitating 17 week high today. TOCOM was barely awake today. Volume dropped 45% to equal only 13,762 Comex lots; the active contract and world gold hardly moved (up 3 yen and down 25c from the NY close). Open interest slipped the equivalent of 830 Comex contracts. (NY yesterday was estimated to have traded 40,000 lots.) On Wednesday, an effort to push gold down in NY was unsuccessful. In ScotiaMocatta’s words: "Gold started the day trading 399.60/400.10 but soon came under pressure… forcing gold to the session low of 398.60/399.10. The metal did not spend much time at the low as physical buying forced the price back up". This morning more pressure has been seen, staring about 4AM NY time, and curiously correlated with phases of weakness in the dollar index. How much progress the sellers can make against the physical market is problematic. Refco Research has been sufficiently impressed by the underpinning to attempt another foray on the long side: "Buy 2 April gold at market. Risk close under 397 or 394 (intraday). Expect 414." With the comment: "Overall, April gold has experienced a significant amount of long liquidation already. Its RSI is below 40 (becoming oversold). Physical interest, especially Asian source (d), appears on the mend" What could ultimately be the most important gold development of the day, however, is the appearance on the Op-Ed page of the European Wall Street Journal of an article by a Morgan Stanley executive raising the possibility of a break up of the Euro zone. "It's about time that long-term investors start considering what might happen if the euro-zone fell apart…the technical and practical hurdles for reintroducing a national currency are much lower than generally presumed. First, the national central banks still exist and are fully operational." See http://online.wsj.com/article/0,,SB107593455742220968,00.html The appearance of this piece probably has more to do with the resentment by the control clique at the Journal of the EU’s lack of enthusiasm for the Iraq venture than any economic issue. But the idea that the era of evaporating national boundaries and globalist euphoria might be ending is a poisonous one for gold’s enemies. JB CARTEL CAPITULATION WATCH Was the Working Group on Financial Markets at work today, or what??!! While the dollar was tagged this morning and foreign stock markets were correcting, the DOW and DOG futures markets were due much higher after yesterday’s sell-off. It is the same pattern we have seen this entire past year. There is never any downside follow through. The weekly jobs number was disappointing as was the lower than expected fourth quarter productivity number. No matter, The DOW gained 25 to 10,496 and DOG whined its way to 2020, up 5. Productivity Cools, Jobless Claims Rise
Thursday February 5, 1:27 pm ET
WASHINGTON (Reuters) - Worker productivity rose at the slowest pace in a year during the fourth quarter, the government reported on Thursday, in a sign that business are finally starting to hire new employees.
However, another government report said the number of Americans seeking first-time jobless benefits rose unexpectedly last week, in part because of bad weather.
Non-farm business productivity, or worker output per hour, increased at a 2.7 percent annual rate in the final three months of the year after an upwardly revised 9.5 percent pace in the previous quarter, the Labor Department said.
The advance was the slowest since a 1.5 percent gain in the final quarter of 2002 and was lower than the 3.0 percent clip expected by analysts. The second disappointing bit of job news in two days: Feb. 5 (Bloomberg) -- The number of Americans filing first- time applications for unemployment benefits unexpectedly rose to 356,000 last week after reaching a three-year low, a government report showed.
Initial jobless claims increased by 17,000 for the week that ended Saturday from a revised 339,000 the previous week, the Labor Department said in Washington. Snowstorms in parts of the country may have caused temporary layoffs at construction and other companies, leading to the rise in filings, a Labor spokesman said. The prior week's level matched the lowest since January 2001. –END- My guess is the widely-anticipated jobs number will be OK tomorrow, or even a good deal better than the downplayed expectations. However, much of the increase will be due to a one-time technicality/seasonal factor. It will be a number to sell into. I haven’t seen any talk the last few days of this adjustment. Wall Street wants expectations to be subdued. What kind of trouble is lurking at the coming G-7 meeting? From www.independent.co.uk: Euroland wants G7 to address the weak dollar. The US won't play ball Chances that finance ministers' meeting will resolve currency misalignment look remoteBy Philip Thornton, Economics Correspondent04 February 2004 The dollar and the euro have embarked on a roller-coaster ride. Against this volatile background finance ministers and central bankers from the world's seven richest countries gather this weekend to hammer out a form of words to restore calm. Or at least that's what financial markets think. One US economist, however, summed up the likely course of events in a typically no-nonsense American manner: "Eurolanders will tell Snow and Greenspan [the US Treasury Secretary John Snow and the Federal Reserve chairman Alan Greenspan] to fix what's wrong with the dollar," said Carl Weinberg, head of High Frequency Economics in New York. "Greenspan and Snow will tell eurolanders to go fish!" European finance ministers are certainly angling for a deal at the G7 summit in Boca Raton, Florida, to relieve the pressure they say the rise on the euro is inflicting on their economies. The head of the European Central Bank described the euro's vertiginous rise as "brutal", France's finance minister condemned it as "dangerous" and a junior German economy minister said it was "difficult". Along with Italy, the eurozone fills three of the seven seats at the G7 table. But arrayed against them will be the powerful voices of the US - Mr Snow and Mr Greenspan…. -END- One need only look at the falling price of gold to know this is so, right?????????? Fed's Bernanke - Weak dollar not an inflation risk
Reuters, 02.05.04, 1:18 PM ET
WASHINGTON, Feb 5 (Reuters) - Federal Reserve Board Governor Ben Bernanke said on Thursday that the drop in the dollar's value on foreign exchange markets would help cut the U.S. trade deficit, and was not sparking higher prices.
"The dollar has come down and I think that will pass through over time to a strengthening of our export markets and will help us recover some of this trade deficit that we have been facing," he told the South Carolina Association of Investment Professionals Economic Forecasting luncheon in Columbia, South Carolina.
"So it is important in that respect... Again, I think that its direct impact on inflation is going to be modest," he said. –END-
A constant theme of this commentary has been the healthy economic activity these past months was due to the aggressive stimulation by the Fed and Government (tax cuts, etc), and it is going to gradually subside. Meanwhile the big economic picture has continued to deteriorate. Not get better, or stay the same, deteriorate. We see it all over when it comes to state budget deficits, US Government deficits, personal debt, corporate pension under-fundings, a jobless US economic recovery and so on. There is no shortage of growing problems in the US. For example, from the erudite Bill King in his King Report: The Asian Time’s Macabe Keliher notes few people have heeded Taiwan Semiconductor CEO Morris Chang’s warning that the industry faces a global recession in 2005 due to coming Chinese supply. That contradicts the rosy views from many US tech analysts, but after all, Taiwan Semiconductor is only the world’s largest made-to-order integrated circuit and computer-chip manufacturer and they work on Wall Street. The unsavory facts are China is providing low cost loans and tax incentives for companies to increase their chip-making capacity. China’s largest chip manufacturer, Semiconductor Manufacturing International, will increase capacity 70% this year. Nomura semi analyst Tick Hsu laments, "The overcapacity will be massive. And taken with a modest fall in global chip sales, there will be a rough landing for the industry." Now check those semi PEs. You really think more Fed largesse or refis or tax rebates or larger deficits will matter? Soon, supply-siders will understand what happens when supply and capacity surge after a record consumption and debt orgy. http://www.atimes.com/atimes/China/FB03Ad01.html -END Then, this commentary yesterday from the savvy Doug Noland: The resulting surge in Credit inflation – both domestically and internationally – has been especially seductive, pleasing and provocative. I would argue strongly that it is without historical parallel. And there is today no managing the degree of excess or its inflationary manifestations. Increasingly, we sense an important "breaking of the ranks" for global central bankers. A few are responding to heightened risk and instability by cutting rates. Others have moved in the opposite direction, commencing the process of returning to less accommodative yields. Some central banks are buying dollars (in at least one case in stunning quantities); others are supporting their own currencies as global speculative flows turn erratic. No longer must global central bankers feel like they are all winners - all part of a cohesive and content group. Perhaps there has been a concerted behind-the-scenes call for the Fed to act, providing the impetus for this week’s Ruse.
Clearly, things have evolved a long way toward the Fed losing complete control of the inflationary process. It will be fascinating to measure the half-life of Greenspan’s recent Ruse. Especially in merciless currency markets, traders tend to be keen to expose weak hands. And while I don’t at this point view Fed rate hikes as imminent, I would expect continued dollar weakness to force the Fed’s hand. The Ruse would be over and things would turn decidedly interesting.
http://www.prudentbear.com/creditbubblebulletin.asp-END- GATA’s Mike Bolser: Hi Bill:
The Fed issued a "coupon pass" today for $910 Million coupled with a $14.75 Billion repo issuance. This action caused the repo pool to rise a bit to $25.55 Billion again still well below its 30-day moving average. Recall that permanent open market operations are funds that never need be repaid. A coupon pass is a normally scheduled interest payment that need not be paid by the primary dealers in possession of the named securities.
The repo pool 30-day ma continues to steeply fall, now in a ballistic pattern and shows the seriousness of the Fed in its desire to have the DOW reacquire its appropriate linear trend line. The DOW's 30-day ma has responded by ever-so-slightly rolling over towards level and the DOW has intercepted it. The remaining question is whether the DOW will simply fall through its moving average or just move sideways. So far it is moving sideways but the Fed keeps removing repo pool support (as evidenced by the long dwell time below its moving average).
G-7 Fun in the Sun
Things seem to be in a holding pattern ahead of the G-7 meeting in Florida today. The master regulators have fewer and fewer interventional options remaining to them as macro economic stress builds mainly from the horrendous US budget and trade deficits.
The Japanese seem to have exhausted their currency interventional efforts while Secretary Snow has been silent of late on his "strong dollar" mantra with China stoically refusing to raise the value of the Yuan in spite of persistent Fed jawboning. The Chinese are in an enviable position while the ever subtle Vladimir counts his recent petroleum gains with a smile.
It will be interesting to see which interventional option the G-7 chooses...or perhaps they have some new tricks?
Mike
05 February 2004 11:09
Russia`s gold, foreign exchange reserves up by $1.4 bln (+1.69%) to $84.1 bln on Jan. 23-30.
Russia's gold, foreign exchange reserves widened by $1.4 bln (+1.69%) to $84.1 bln Jan. 23-30, the Bank of Russia said. – END- A good gold read from Keith Rabin of the KWR International Advisor: http://kwrintl.com/library/2004/Advisor_24/gold.html -END-
Seems just about everyone has their opinion of the Janet Jackson breast bearing fiasco at the Super Bowl, even the First Lady. I like these two – the first from Richard Russell last evening: Every morning I get up at around 3:50 AM, and the first thing I do is take my vitamins. The second thing I do is eat some breakfast. The third thing I do is turn on the radio to our 24 hour news station. I listen to hear what they say about the market and gold. If they mention gold, I know gold is down. If gold is up, they don't mention it..... After the Super Bowl the whole establishment was up in arms when one of Janet Jackson's breasts was seen for a few seconds on TV, So how about this -- we keep the nation obsessed with the filth and horror of women's breasts, and maybe they'll forget about the less important items like the loss of their savings and the loss of the purchasing power of their money. -END- Then this one from David Lewis of Chaos-onomics: Sometimes a breast is just a breast and sometimes it can be a wonderful ink blot test. I've written before about the inability to suppress the truth in perpetuity, citing the example of Diocletian's edicts. Today, I'd like to try to explain some of the effects of suppressing opinion, namely transference.
As I search through the internet I see pages and pages of "analysis" aimed at uncovering the truth in the issue of Ms. Jackson's breast. A google news search for the words, Janet, Jackson, and breast finds 1860 articles. "Researchers" have examined the lyrics to the song, the flow of funds surrounding the appearance, and the history of Ms. Jackson and Mr. Timberlake, to name a few avenues of inquiry, in order to arrive at the truth. The FCC has even jumped into the fray.
The question the pops into my head is this. Why does Ms. Jackson's denial of intent inspire such angst while the administration's denial of intent in misleading the nation to war inspire so little? To me it smacks of transference. Just as there are taboo subjects in any dysfunctional family, imposed by senior members of the family on those less so, so too, it seems to me, are there taboo subjects in any culture. Equally, just as these family taboos often give rise, among family members, to transference of feelings from the taboos to other related issues, so too do the cultural taboos give rise to transference.
People. it seems, are upset about being deceived. However, the avenues of inquiry into certain possible deceptions are not part of the culturally accepted dogma. Just as children are "shushed" when they ask, for example, "are Mommy and Daddy getting a divorce?," people are "shushed" when they ask other questions. I'm intrigued to see how the blocked avenues of inquiry manifest in our culture. Perhaps this will become an accepted contentious issue for the upcoming election and we will debate the writing of new laws outlawing bared breasts at all times complete with mandatory minimum sentences for exposure. -END- People get outraged because Janet Jackson exposes/bares a breast. Big deal! GATA exposes five years worth of gold price manipulation, which will eventually affect all Americans, and the gold world/US financial press continues to fail to bare the findings. Findings which could not be any more stark than what Janet Jackson did, yet the mainstream gold establishment and the US financial press remain silent. The regulatory authorities also do absolutely nothing. The outrage is all the attention put on a stupid provocation versus some serious issues which are slowly causing the Romanesque-like America to burn. Be outraged at the silly young woman if you wish. The way I see it, this is what America should really be outraged over: U.S. Military
Two US Soldiers ask: "When will we stop dying so senselessly?", Jay Shaft, January 31, 2004
By Jay Shaft - Interviews 2 U.S. Soldiers For the entire interview: http://www.axisoflogic.com/artman/publish/article_4893.shtml -END- These soldiers are America’s real Patriots and heroes. They are dying because of the nefarious doings of a number of misguided old men in Washington. Pile on top of that the shenanigans of a bunch of pillaging establishment bullion dealer male crooks raking in illegally made dough in New York. Americans should be outraged at these bums a zillion times more than at a sad case like Janet Jackson. From Ted Butler on the silver manipulation with more on what we can do about it: One of the hallmarks of the silver manipulation has been the lack of public acknowledgment, in establishment circles, that even the possibility of a manipulation existed. I ask myself continually, "where are the watch dogs in the media and regulatory professions?" (I know GATA has these same feelings about gold.) This in spite of these people being told, on no uncertain terms, just how the manipulation is conducted, through leasing and COMEX naked short sales. This in spite of an Internet petition with almost 2400 names from regular people who know something is wrong in COMEX silver. This in spite of them being unable to address the question, how can silver even be considered to be in a free market, seeing how it has been in a structural deficit, confirmed by declining inventories, with flat prices? And why is the COMEX short position, alone among all commodities, greater than world production and many times greater than visible world inventories. Since the regulators, media and establishment analytical community can't possibly answer these questions, they ignore them.
While their collective silence is infuriating, it requires the questions to be asked again, until they do answer. Fortunately, we are blessed with the ability to continue to ask these questions, thanks to the Internet. Even more important, we are blessed to live in a developing regulatory environment that will eliminate the possibility of those who should have done something about the silver manipulation, from ever declaring, "we didn't know." Nowadays, if corporate officers can be shown to have been notified of a serious problem, and they don't address that problem, they can be held personally and criminally liable.
If you want to make sure that those responsible for dealing with the silver manipulation can't claim ignorance as an excuse, you might want to do what I have done, and make sure they know. Send a short e-mail, keep it professional and to the point, asking the top people at the NYMEX/COMEX to end the silver manipulation and uneconomic short selling. The more they are notified, whether they act now or not, the more they will be on the hook later. I think the more contacts the better, and there's no reason to be rude. Your e-mail could be used as evidence for the prosecution at a later date. Feel free to use anything I've written. Here are the addresses -
Vincent Viola
Chairman
Vviola@nymex.com
Michael Steinhause
Vice-Chairman
Msteinhause@nymex.com
Christopher Bowen
General Counsel
Cbowen@nymex.com
Thomas Lasala
VP - Chief Regulatory Officer
tlasalla@nymex.com -END- More signs the big hedgers remain under big pressure: Investors cut Lihir adrift By: Peter Gonnella
Posted: 2004/02/03 Tue 17:00 ZE8 | © Mineweb 1997-2004 P ERTH (www.minewebaustralia.com) – Continuing operational and financial disappointments and an outlook pointing to further underperformance look to have finally taken the wind out of the sails of Lihir Gold’s gold price-induced bull run.>Ashanti's golden crutch By: Ken Gooding
Posted: 2004/02/04 Wed 19:03 | © Mineweb 1997-2004 L ONDON (Mineweb.com) – AngloGold is providing another US$49m in cash and loans to keep Ashanti Goldfields afloat until the two groups complete their proposed merger, probably in April. This was revealed as the Ghanaian group announced far-from-sparkling financial results for 2003, almost certainly its last year as an independent entity. Profit before exceptional charges was down by nearly one third from the 2002 level and gold production marginally lower. But Ashanti still achieved its targeted 1.6m ounces.
Ashanti says the money provided by Anglo will enable it to move ahead with the carbon-in-pulp (CIP) project at the Siguiri mine in north eastern Guinea that it had considered either postponing or cancelling because of its cash shortage….
But also Ashanti’s poorer operating performance in 2003 reduced its inflow of cash – from $95.2m in 2002 to $86.3m last year.-END- Nowhere in the Mineweb story is there any mention of hedging losses from Mega-hedger Ashanti and how these losses have affected their pro-forma. Yet, how could they have less cash flow in 2003 than 2002 when gold prices were so MUCH lower? San Antonio’s Derek VanArtsdalen: Hi Bill,
Quick HUI update. Closed today at 216.75, up 4 points and nearly 2% on the day. Very strong considering that yesterday the ever-jittery goldbug community lost its nerve and bailed out, causing the HUI to close on its exact low. That was too bad, because the HUI actually made a good run yesterday (and again today; see blue arrow) at almost busting through the upside line of resistance. Notice that both of the oscillators are heading up. That's very good news.
So our falling wedge pattern is still perfectly intact. It may take as many as four or five more trading sessions to resolve, and unless something drastic happens on or before tomorrow, I'm assuming it'll be next week before we have our answer. I'm still betting on the upside breakout myself. If that's what happens, that MACD indicator (which finally turned up today!) has a helluva long way to run before it'll flash its next overbought signal. Even then, I won't be overly eager to jump off the wagon. Too many systemic stresses in the world's financial system for things to end with just a whimper. The dollar is looking like a 98-pound weakling, and the only "soft landing," I'm afraid, will be the one Uncle Sam experiences when he lands flat on his ass...
Another point of interest. The London PM fix today was $399.55 U.S. per ounce of gold. Yesterday's fix was also below $400. As you know, this is gold's second venture below $400.00. You may recall that I noted a couple of days ago that it took the great gold bull market of the late 70s three complete cycles above and below $400 before it finally blasted off. Not that our current market will be an instant replay of that one, but the point is that we may still have to endure another couple of gyrations above and below the $400 mark before we get the next earnest leg up in the gold market. I noticed that the Grand Manipulators were able to close the dollar barely above the 87 bar (again) and just above even for the session so that they could proudly proclaim a small moral victory. I don't think they'll be celebrating for long.
No matter. Very soon, reality will assert itself once again, and I think we all know where the dollar is headed. It's not a scenario any sane American would wish for, of course, but facts are facts: the U.S. dollar is quickly losing its status as the world's number one reserve currency. The desperate Cabal is now fighting the proverbial fencing match with the proverbial stick. It's a game they can't win now, and they darned well know it.
Lastly, here's a chart of the ratio between the price of Durban Deep (DROOY) and the South African Rand. Notice the huge upside breakout (circled) and now the temporary retracement. This happens frequently, of course. The data breaks upwards out of the pattern, experiences a temporary pullback toward the former resistance line (which now acts a support) and then usually does one more U-turn and heads on up to new highs. 
By the way, the measured move on this chart would take the ratio to about 58 or so, well above its current two resistance points at +/- 52 back in the summer of '02. That would make owners of DROOY at anything under $4.00 very happy, I'm sure. Other South African miners would probably do similarly well if the Rand continues to show extended weakness.
Keep all cylinders firing, buddy –
Derek
Chuck checks in on the shares too: Mr, Bill:
I have felt that history instructs us that the gold shares should be the focus not the metal. For whatever reasons, they anticipate the top and the bottom no matter what the metal does. So it is very positive, in my opinion, to see the relative strength over the past week or so. We could still see some weakness in gold and silver, but the shares could move up even as the metals come down a little. That is why it is dangerous to wait until the bottom in gold is in and it has moved over a predetermined price, say $415. By then it is feasible that the shares which is the primary concern of most gold investors could be much higher. That is my guess at this time, also. I am not trying to toot my own horn, but I mentioned IMA and its negative reaction a few weeks ago on excellent news as the sign that we are not only in the infancy of this move, but barely out of the womb. Yesterday's news that the property continues to indicate a historic find confirms what has been believed by many people, and the stock has now doubled since that day. And yet, it remains incredibly cheap because of the massive scope and quality of its silver. Most of the exploration companies that I have focused on continue as though there isn't a person in the world interested in them in spite of their tremendous properties and potential. When the stock market pops which I think is very close, we will see things "that we wouldn't have believed even if someone told you." Habakkuk Let' see what next week will bring after the useless gathering of the G7 tomorrow. There are too many people waiting for the bottom to be in place to allow them to position themselves for the next leg. Markets are very cruel and unaccommodating for that to happen.
Chuck ikiecohen@msn.com What a strange day! The gold shares were firm right out of the box. Yesterday’s sellers had to be looking to cover on the gold bashing today. Even better, the HUI closed not far from its high today of 217.42. It finished at 216.75, up 4 with a 211.55 low. The HUI was all over the place. The XAU ended the day at 96.23, up 1.31. For only the second time in a month, the gold shares closed strongly. If there ever was a day for them to break down, this was it. That is a big plus. When the HUI takes out 220, the gold shares should run. At some point, I expect the gold/silver shares to move up in violent fashion, which ought to make it difficult for those 93% of the gold share market timers who want to re-enter, much less others in the investment world who still remain clueless about the gold market and what is ahead. GATA BE IN IT TO WIN IT! MIDAS Special Appendix To beat the bad guys, GATA needs its ARMY and Café members to take out a little bit of time and contact Spitzer, the CFTC, any of the other suggestions Ted Butler has given us, or all of them. This can work for the good of all, however, we need the help of many to make it happen! The letters continue to pour out: Hi Bill-
FYI, I mailed and filed a formal complaint with Spitzer's office and also sent the following e-mail to the CFTC
Regards,
J H Subj: Complaint filed against CFTC with NYS Attorney General Gentlemen:
Please be advised that I have filed a formal complaint against the CFTC with the NYS Attorney General for its dereliction of duty and complicity in allowing the continual illegal manipulation of the silver market on COMEX, and have asked that Mr. Elliot Spitzer, NYS Attorney General intercede in the enforcement of anti-collusive statutes with respect to the interference with a free silver market by a concentrated number of holders of an aggregate untenable naked short position in paper silver.
I am hopeful that Mr. Spitzer will continue and further enhance his reputation in interceding in law enforcement in instances where regulatory bodies charged with doing so are negligent in exposing scandal.
J H
Dear Senator Schumer, Please review the following excerpt from a report by Ted Butler concerning the price fixing of silver that exists within the COMEX. As a private investor I continue to lose tens of thousands of dollars because both silver and gold bullion commodities are manipulated by commercial interests, who act together to impact the price. This collusion is a violation of anti trust law as well as countless state laws having to do with fraud, misrepresentation, misappropriation, and larceny. Why is it tolerated by the States Attorney General? For the past year I have researched this issue and find overwhelming evidence that price fixing through illegal shorting is a regular practice. Moreover, it is being done in the equity market as well. An organized sell off of precious metal shares occurred on 1/28/04 which caused regular investors huge losses, and that incident is just an example of the pattern of these types of events that can be easily discovered through even a cursory investigation. Seemingly, government condones this price fixing as it serves their purpose concerning the US Dollar value; however, the collusion by insiders selling off shares in the equity markets is destroying average investors like me, and it is patently illegal! As a retired thirty year veteran law enforcement official, I implore you to see that this matter is investigated and prosecuted. WEEKLY COMMENTARY February 2, 2004 Business As Usual?
By Theodore Butler "The just-released Commitments of Traders Report (COT), for positions held as of Tuesday, January 27, 2004, was a shocker for silver. It showed that the commercials increased their net short position in COMEX silver futures and call options to 470 million.... *** 04 February 2004 The Honorable Eliot Spitzer
New York State Attorney General
120 Broadway
New York, NY 10271
U.S.A. Subject: The Silver Market Dear Sir: I am writing to you on an issue which, by now, you are more than familiar…the suppression of the silver price on the NYMEX/COMEX by the ‘eight or less’ traders. It is more than obvious, even to the casual observer, that the price of silver is controlled, and has been for more than a decade. Some people say that the price of silver has never been free, particularly since the appearance of the Silver Users Association in 1947. I know that your office…plus the authorities at the CFTC and the NYMEX/COMEX…are all more than aware of that as well. The 8 largest COMEX traders are net (naked) short more than 7 times the annual silver mine production of the US, the world's 4th largest producer (source - Silver Institute). You can be sure that the Chairman of the CFTC, James Newsome…an ex-cattleman… would never allow 8 traders to be short anything approaching total US cattle production, to say nothing of 7 times US cattle production. That the CFTC protects these silver shorts is deplorable. The CFTC has been informed of this issue many times over the last fifteen years, and have done nothing to stop it. Up until now, I have refused to believe that the CFTC is complicit in this matter, but I have now changed my mind to the belief that they are. In a related Dow Jones story today, I see that the SEC and NASD have both taken drastic action to tighten one of its rules governing illegal naked short selling. Let me quote this article... "Known as affirmative determination, the NASD rule stipulates that brokers and dealers engaged in a short sale transaction must make sure that shares can be delivered by settlement time, three days later."
"We closed a loophole," said Steve Luparello, executive vice president of Market Regulation at NASD. Until now, non-NASD members, like specialists, option markets and foreign brokers, weren't covered under the affirmative determination rule." "New Rule 3370 goes into effect on February 20th 2004. This new rule could become the Holy Grail for bulletin board traded companies. The Rule requires NASD member firms to treat non-member broker dealers as if they were regular customers as regards delivery of any shares that have been sold through a US registered broker/dealer."
"A short seller typically borrows stock from a broker to sell it into the market, betting that the share price will fall so that he can buy the stock back at a lower price and pocket
the difference." End. Mr. Sptizer, you and I and James Newsome all know that the ‘eight or less traders’ that are suppressing the silver price have little or no silver backing their obvious naked short positions. They are allowed to sell naked short any amount they wish, in order to control the price…without a word from the CFTC. This is not only illegal…it is outrageous as well…and entirely against regulations of the NYMEX/COMEX. It also makes a mockery of the belief that the U.S. markets are free and fair. This is obviously not the case with silver…plus a great many other things that are beyond the scope of this letter. If the SEC and the NASD have decided to put their foot down on naked short sales in this area, then it is long overdue that the CFTC take similar action in the silver market. Silver expert Ted Butler (www.butlerresearch.com/archive_free.html) has previously provided a fair solution (to the CFTC) that will fix any threat of a delivery default and eliminate the silver manipulation problem at the same time. In fact, it would work in all commodity markets. The CFTC must mandate that all longs in futures contracts must have the full cash value of their contracts deposited in their accounts by first delivery day. And likewise, all shorts must have COMEX warehouse receipts deposited by first delivery day. Mr. Spitzer, the CFTC is deathly afraid to even debate this, because they know it has great merit. You and I know it too. You and your department have done most excellent work in the past number of years bringing financial wrong-doings to light. I urge you to the honourable thing, and end this manipulation now. I know you have the power, and I also hope that you have the will to do what is necessary and right. In closing, I wish you well in your continued endeavors. I also enclose a copy of silver expert Ted Butler’s latest essay "Business as Usual?" taken from his web site mentioned above, or available directly from the URL (www.investmentrarities.com/02-02-04.html) If you have any further questions, or require more information, you can contact me directly, or speak with the expert on this issue…former commodities trader, Mr. Ted Butler. He is the real expert in these matters, and would gladly meet with you at your convenience, and at a time and location of your choosing. Best personal wishes, Ed Steer
Edmonton, Alberta
Canada T6K 2H4 Phone:
e-mail: edsteer48@shaw.ca cc James Newsome
Chairman, CFTC
jnewsome@cftc.gov Dr. Michael Gorham
Director of Market Oversight, CFTC
mgorham@cftc.gov file enclosures (1- Six pages) Essay by Ted Butler: Business as Usual?
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