The following is from my 10/11 MIDAS: "Still a Red Sox fan. Love my old park. Unless you are a Yankee fan, hard not to root for the Bosox? Only question for me is who wins the day first? The Red Sox finally win the World Series again, or GATA defeats The Gold Cartel."

Only few days ago the situation for both the Red Sox and GATA was bleak. The Bosox were down 3 games to zip and The Gold Cartel had stopped gold in its tracks at $420 with the specs mega-long and almost everyone predicting a "Commercials" victory – because they always win (like the rich and powerful Yankees).

What a difference a few days make, days which are so supportive of the old adage, "that’s why they play the game!" The Red Sox, down 3 zip, have a chance to pull off the unimaginable if they beat the Yankees in tonight’s 7^th game final of the American League playoff. The GATA ARMY has a chance to win the day versus the heinous Gold Cartel if gold takes out $430, surely thought unimaginable by cabal forces only last week.

That said, the orchestrated gold close today engineered by the cabal forces was dreadful.

Close, But No Cigar. In recent days I have mentioned what we needed was a $3 to sharply higher opening and then go from there to really get going. Got the $3 opening today to the penny, followed by almost perfect cooperation from outside market forces. Result: the aggravating Gold Groundhog showed up again with more of the same blatant Gold Cartel manipulation to cap the price of gold. Only the BRAIN DEAD could fail to spot this coordinated intervention.

Gold closed near its lows of the trading session and $2.60 off its highs even though:

*The dollar closed at 86.43, down .50, while the euro gained .68 to 125.84
*Crude oil soared to $54.93 per barrel, up a mere $1.64.
*The CRB advanced closer to making 23-year highs at 227.62, up 2.21
*World stock markets were much lower, as was a sharply lower US stock market before the PPT showed up.

From Houston’s Dan Norcini:

Hey bill:
See attached. Shows how the "gig" is played attempting to use the technicals to run the specs.
Best,
Dan

THAT, is THE CABAL in action.

The Gold Cartel is waiting for the dollar to rally a nano-tick to take gold back down below $420 and away from $430 danger. Bottom line: same stinking analysis. Until The Gold Cartel is blown up, gold goes nowhere. $423 gold IS nowhere after all these years, some $300 per ounce lower than where it should be.

The Working Group on Financial Markets and Gold Cartel were able to stave off disaster today by stopping the gold advance and propping up a sinking stock market. They have been messing around in US financial markets far too long and set up the most extraordinary imbalances. While one could say they prevented defeat today, their fate is sealed. The outcome of this Orwellian misdaventure is going to end VERY badly. They will not be able to control gold too much longer and the US stock market is going to fall apart as their financial resources are exhausted.

The gold open interest rose 2979 contracts to 305,2225.

A wild day in the silver pits. Silver popped early to the tune of about 15 cents after the opening, mega-short Morgan Stanley then bombed it, taking silver down on the session. Big mistake. Instead of attracting other sellers, the floor and other buyers ganged up on him. In a blink, silver was up almost 25 cents. Did I see it occur? No. Both Kitco and TheBullionDesk were too overloaded to obtain quotes.

The silver open interest gained 1479 contracts to 111,307. While the gold open interest is back to its highs of earlier this year, silver is more than 10% off its old highs. Plenty of room for the specs to pile in at these levels.

From the MIDAS last night:

An eerie message my friend Mahendra sent to his subscribers well before Comex opened:

Here’s what happened. No more than 5 seconds after I had written down what Mahendra had sent out, he called me out of the blue. I almost fell off my chair. When I told him his ears must have been burning, he chuckled, saying this coincidence confirmed what he had sent out. It was the same sort of comment he made when we walked across the street in Dallas after our meeting/cocktail party for him in Dallas last May and the heavens opened up with rain. He said then that the deluge of rain confirmed what he came to Dallas to talk to us about.

Why did I save this? Because, like many ex-pro athletes, I am a bit superstitious and did not want to jinx things for today.

Spoke with Mahendra after the close again. I was ticked at today’s price management. He was laughing. Says the shorts have, and are, trapping themselves this time (taking the bait like animals do in the jungle). By the way, Mahendra’s calls on the markets continue to astound. Love to get him some media attention. If anyone out there can help, would be a great story for journalists of all kinds. They can go to:

Some key charts for your review:

Indian ex-duty premiums: AM $6.96, PM $5.27, with world gold at $419.55 and $423.45. Ample, and adequate for legal imports. Impressively resilient, considering the sharp increase in world gold. The rupee strengthened further to a 3-month high today.

TOCOM activity slumped, the firmer yen probably suppressing any interest in gold futures. Volume fell 44% to only equal 11,480 Comex lots; world gold was essentially static (up 10c from the NY close); the active contract closed up 5 yen. (NY yesterday traded 45,130 contracts; open interest rose another 2,979 lots to 305,225, getting close again to the all time high.)

Refco Research guessed last night that open interest would fall in the wake of the palpable defeat of the bear raid early yesterday: instead it rose. Quite possibly tomorrow will see a record: estimated volume was 50,000, with a tell-tale acceleration at the close.

Institutional Analyst/groupie Dennis Gartman, finally becoming concerned about the dollar, asks the key question about gold (written very early today):

"Turning then to gold, we note that once again the $420-422/oz. level is material resistance, and it has been for the past several sessions…One might reasonably ask who the sellers are that are keeping prices from rising…What is important is that the price of gold is clearly trending upward; the sellers find their offers rather readily taken; support seems to come in at progressively higher prices and resistance is steadily chipped at."

Since Gartman has a fine sense about what his clients are willing to hear, gold’s friends should be grateful that he raises the (unanswered) question: any interest in the sector from this quarter is significant.

JB

CARTEL CAPITULATION WATCH

The December 30-year bond closed at 114 1/32 up 21/32. This is at its highest levels for the move, hardly a ringing endorsement of the US economy. I’ll hang with my analysis of the past many months, one that seems so obvious. The maneuvers by the Fed and Bush Administration to prop up the economy have run their course. What lies ahead for our economy and stock markets appears ominous.

The PPT is like the football teams of yesteryear that would run off tackle over and over again until it did not work any more. Only, in this case, it is their patented "Hail Mary" play used to rescue the DOW which they use over and over. The DOW was down over 90 in the early going. No matter, by the close it came back to 9986, down 11. The DOG gained 11 to 1933.

The oil inventory news was super bullish:

10:31 DOE reports crude oil inventories +1.2M barrels vs. expectations +1.8M barrels
Gasoline inventories reported (700K) barrels vs. consensus +400K barrels. Distillate inventories reported (1.9M) barrels vs. consensus (1.0M) barrels. November crude is trading higher to $53.80/barrel in reaction to the data.
* * * * *

10:33 API reports crude oil inventories (972K) barrels
Distillate inventories reported (1.2M) barrels, while gasoline inventories (2.4M) barrels. Nov. WTI crude continues to trade higher, post-data, quoted last at $53.90/barrel.
* * * * *

Gold Cartel crowd rats beginning to leave a sinking ship?

10/20
The bulls jumped almost 5%, all the way up to 58.9%, while the bears fell to 22.1%, a drop of 1.4%. Historically, these levels have proved very negative for equities. It is hard pinpoint a single reason for this increased enthusiasm, with averages flat, or within 4%, of where they started the year, but virtually all newsletters do look for a break in the high crude prices.

There were just 19.0% in the correction camp. They are short term bearish but longer term bullish, viewing an expected pullback to be a buying opportunity.

We consider "normal" readings to be 45% for the bulls and 35% for the bears. The bulls had been well below that level mid-August, and markets rallied. The sentiment readings are used on a contrary basis.

The spread between the bulls and bears expanded to 36.8%, moving into the 35-40% range most often seen at the levels of index tops.

-END-

The real CPI story:

The King Report
M. Ramsey King Securities, Inc.
Wednesday Oct. 20, 2004 – Issue 3020 "Independent View of the News"

From the BLS on CPI: "Energy costs declined for the third consecutive month--

There is more hilarity in other categories of the CPI release and tables, but we don’t feel the need to delve further to prove the obvious.

How come in BLS substitution policy, there is never upward substitution if prices fall? If steak prices soar, the BLS assumes people will ‘substitute’ ground beef; and then there is no CPI increase. But what if beef prices fall? Does the BLS assume people will substitute ground sirloin for hamburger? It’s just like hedonics – there never is an adjustment for worse service or anything that might raise the CPI.

Yesterday’s WSJ had some analyst downplaying hedonic adjustments. We love analysts and reporters that suddenly have to address issues like hedonic adjustments and the Biz B/D Rate when they have ignored or were not aware of it for years. Most Wall Street analysts loathe ‘doing the work’, so they ignore troubling details. If economists and analysts acknowledge the problems, they must ‘do some work’ instead of just plugging dubious data into their ‘models’ and/or making specious forecasts on spurious data…As we annually note, Q3 (July to August) CPI is one of the most massaged numbers because it is the basis of COLAs. And we are pleased that others now report that fact…We’d love to hear the WSJ’s reporter and his featured analyst’s explanation for energy in the CPI.

The Social Security Administration announced a 2.7% COLA for its more than 47m recipients yesterday. This is about $25/month for the average recipient. Higher Medicare premiums will cost $11.60/month. Ergo, the US government on the paying hand (BLS) says healthcare costs are up only 4.4% y/y, but on the taking hand it exacts a higher toll…Congress is complicit in swindling the elderly - by deed or ignorance

-END-

With the false/gimmickry reporting we are getting from the establishment and the present administration in Washington, along with the blatant rigging of the price of gold to calm down inflation talk, one can’t help but reflect on two of my favorite movies: The Matrix and The Stepford Wives.

The latest from Dennis Gartman. While, he still doesn’t get IT, DG deserves credit for at least acknowledging our camp, unlike the gold industry, whose disdain for us and negligent silence towards our evidence of price manipulation is inexcusable.

Ill advised? Nothing in market history has ever been this obvious! Especially today. Gold opens $3 higher. From there on in the dollar fails to rally, oil goes berserk, silver closes not far off its highs, world stock markets have closed lower and the US market tanks early on. You call that normal market action with massive floor short-covering early as the DEC contract took out fierce $423 resistance on the opening? They have you on CNBC all the time to talk about gold. You would serve them better by expounding on Tiddlywinks.

This is more like it:

Those clients being The Gold Cartel and allies, of course.

Some thoughts from Down Under:

G’Day Bill,
There appears to have beena "fundamental" change in the Markets last night/yesterday, "Times are a changing"??!!

Strong move in commodities last night, with the US$ Index , Dow etc showing extreme weakness.

Web links:

The critical support level for the US$ Index is 84.8, and the Dow at 9840 and 9600.

The critical resistance for Gold is US$ 434.
If and when either of these indices breaks, then "it" might be "on" for one and all. (Pigs can also fly??!!)
The other commodities are in a stage of consolidation, and therefore Gold should take priority in terms of project identification and pegging documentation.
Och baye,
Haggis

At least the gold shares closed on an upbeat note, finishing on their highs. The XAU closed at 101.82, up 2.87, while the HUI jumped 8 to 229.46. A move above 230 should send this index off to the races.

This is the third time gold has traded up towards $430 over the past year. The other two times, the price was pounded lower as The Gold Cartel held the fort by capping those rallies and then mounted a vicious counter-attack. Until they are sent to the cleaners with $430 taken out decisively, we will not be out of harm’s way. They must be buried. Let’s hear it for Murphy’s Law.