GO GATA!!!

No question the past couple of weeks have been the most exciting time for gold since the surprise Washington Agreement was announced on September 26, 1999. Day after day we in the US come in to breakaway gaps as the surging physical market in London keeps taking the market higher and higher. This is exactly the sort of gapping action MIDAS has been waiting to see for some time. The London AM Fix came in at $493, up $4.30 over the prior Comex close. At one point last evening gold was up $6.50.

It doesn’t take Einstein, James Turk, or Bill Murphy to notice something has changed drastically as far as the gold market trading is concerned. You only have to open your eyes.

So, what is going on out there? Gold is not rallying for any of the reasons so often ascribed by the mainstream gold world and Planet Wall Street. Anybody notice the GOLD EXPERTS like Goldman Sachs and JP Morgan Chase coming out with bullish market commentary of late? Compare what we heard during the oil bull market from the oil analysts about the reasons crude was making its run to the $70 per barrel level to the explanations why gold is on the move. There is no comparison because The Gold Cartel and other bullion dealers are silent. The oil move was about supply and demand. So is the gold move. Yet this major factor is barely discussed by Planet Wall Street. Instead, you have the mainstream gold world spokesmen like Jessica Cross of Virtual Metals calling for gold to average $430 in 2006. This is who Planet Wall Street trots out as an expert, extolling the fact she is excited because gold might even approach $500 this year before collapsing. It is mind boggling how infantile the gold world is and how barren(disingenuous is more like it) their analysis is regarding what this market is really all about.

Since gold is making its move towards $500, then to $1,000, with little outside market influence, something else has to be at play. Not that complicated really. Physical market demand is gradually overwhelming the ability of The Gold Cartel to keep the price from rising. The nefarious price-rigging scheme of a bunch of white-collar thugs is going down. I suggest, with back up provided below, that GATA’s efforts have been instrumental in this process.

What MIDAS is laying out here is not so much about chest-thumping (though I don’t mind that necessarily since few others outside of Peter Grandich will even mention the word GATA in public). It is to give Café readers more confidence GATA knows what we are talking about and that a certain portion of the biggest money in the world now knows we do too. It is about laying out a further foundation for an appreciation that the price of gold is headed for $2,000 per ounce and beyond … and what that means investment-wise in the years ahead.

Coincidence or not, the price of gold has soared since GATA held its historic gold conference in the Yukon Territory’s Dawson City on August 8^th and 9^th of this year. In a little more than three months the price of gold has risen from the low $430’s to a high today of $494. Remarkably, it has made this move with the dollar taking off. Since early August the dollar has risen to 92 from 87. The euro dropped from 125 to 117. Few outside the GATA camp thought gold could make a move like this with such dollar strength. The GATA camp not only thought it could happen, we went on record saying it most likely would happen.

You would think this gold move, accompanied by dollar strength, might have a few in the mainstream gold world saying maybe GATA is on to something. Then again, if you know these folks, they would rather be wrong the next decade than admit GATA was right all along. Oh well, we’re smiling.

Now for the backup on this … something has happened since Gold Rush 21 to change the trading character of the gold market. There are number of factors which are attributed for the gold price rise. A number of them are valid, however, they are only secondary factors. If they were primary factors, it is only reasonable to see their visible effects in other financial markets. This is just not the case. In addition to the stock market moving up along with the dollar steadily rising, intermediate/long-term US interest rates have held steady. Gold is making its move NOW due to inherent factors specifically related to gold itself ….

Demand for gold is surging around the world and slowly overwhelming available supply. The price of gold is rising to ration that supply. MIDAS has LONG stated that to know what GATA knows about what The Gold Cartel has done is the key ingredient to realizing what has to happen to the price of gold in the years ahead. The irony is so simple to understand once you are exposed to the evidence GATA has collected over the years. I pose to you what GATA laid out at Gold Rush 21 is quietly spreading all over the world and that major investing players are acting on that information to accumulate gold … that GATA is having a significant impact on increasing gold demand all over the world.

Judge that for yourself based on the following sequence of events:

*** In a stunning development, Oleg V. Mozhaiskov, Deputy Chairman of the Central Bank of Russia, bluntly brought GATA to the attention of the mainstream gold world. Mozhaiskov delivered the keynote address at the London Bullion Dealers Conference in Moscow on June 4th 2004. His speech was delivered in Russian. The only words he mentioned in English were Gold Anti-Trust Action Committee (or GATA).

Naturally when we heard of this, GATA asked the LBMA and attendees for the Russian speech. We had a translator ready to convert it into English. NO ONE in the West would send it to us. No less than 5 other well connected people associated with the gold industry tried to get a copy for us. All failed. GATA, sensing the importance of the presentation, turned to the Russians themselves. This is the Fax they sent to my colleague Chris Powell:

It read:

Dear Sir,

Re: Your fax message of June 20, 2004

I thank you for your interest to my speech at the Moscow LBMA Forum in early June. Since it was made in Russian it can hardly be of use to you unless translated in English. My friends in Moscow Narodny Bank, London, promised to do the translation within a reasonable time. As soon as it is completed you will received the text by E-mail. After you get it you will let me know whether you wish to carry on the dialogue.

With best regards
Oleg V. Mozhaiskov

Getting that sort of cooperation is like having Greenspan's number two at the Fed and the Chairman of JP Morgan Chase going to bat for you.

Here is a quote from this remarkable speech in which this Russian banking bureaucrat lashes out against the US for its economic policies:

"This dualism in gold price formation distinguishes it from other commodities and makes the movements in the price sometimes so enigmatic that market analysts need to invent fantastic intrigues to explain price dynamics. Many have heard of the group of economists who came together in the society known as the Gold Anti-Trust Action Committee and started a number of lawsuits against the U.S. government, accusing it of organising an anti-gold conspiracy. They believe that with the assistance of a number of major financial institutions (they mention in particular the Bank for International Settlements, J.P. Morgan Chase, Citigroup, Deutsche Bank, and others), some senior officials have been manipulating the market since 1994. As a result, the price dropped below US$300 an ounce at a time when it should, if it had kept pace with inflation, reached US$740-760."

*** One of Russian President Vladimir Putin’s economic advisors, Andrey Bykov, contacts GATA and attends Gold Rush 21 in Dawson City, passing up the well established mainstream gold conference in Perth, Australia. Andrey told us at the end of the GATA conference that it was the finest conference he ever attended.

(Cannot resist repeating this cute story. On the way to Gold Rush 21 Andrey sat next to a Nun. He introduced himself and told her where he was from. The Nun asked if he was a spy. Andrey responded, "Yes, but I am on holiday.")

To learn more about Andrey Bykov and his credentials:

http://cns.miis.edu/pubs/week/030421.htmhttp://www.dpi-zug.org/dpi/ndf.html*** In what may be the most important statement on gold by a head of state since French President de Gaulle once said gold "has no nationality and is eternally and universally accepted as the unalterable fiduciary value par excellence":

Nov 22 2005 3:47PM
CB should increase gold weighting in reserves - Putin

MAGADAN. Nov 22 (Interfax) - The Central Bank should review its gold and forex reserves policy in favor of increasing the weighting of gold, Russian President Vladimir Putin said in Magadan.

"I think that the CB should pay more attention to precious metals on Russian territory when forming its gold and foreign-exchange reserves," Putin said at a gold industry conference in the city.

"The reserves are after all gold and forex reserves. Let's not be too restrained here," Putin said

-END-

President Vladimir Putin holds a
gold bar at a mineral resources exhibition in
Madagan in the Russian Far East, Nov. 22, 2005.
Itar-Tass photo.

Wonder what Goldman Sachs and JP Morgan have to say regarding Putin’s definitive comment … one which backs up the orchestrated comments by the Russian who attended the LBMA gold conference in JoBerg last week? If it is the usual, it will be nothing. Perhaps a gulp from these Gold Cartel shorts instead!

The comment by Putin is both stunning and very meaningful. The reasons for the Russians to bolster the price of gold are voluminous and were brought to your attention months ago in this column. The ever-vigilant Adrian has hit one of those nails on the head:

Is the chronology of the evolving Russia (GATA) gold story a one-off fluke? I don’t think so. We need only refer to the very visible and highly regarded Bridgewater Associates to confirm that the GATA message is spreading all over the world. A Bloomberg replay of commentary by Martin Hennecke, a senior manager at independent investment adviser Bridgewater Ltd. in Hong Kong:

Bridgewater's Hennecke Comments on Gold, Silver Markets Outlook
2005-11-21 22:27 (New York)

By Meggan Richard
Nov. 22 (Bloomberg) -- Martin Hennecke, a senior manager at independent investment adviser Bridgewater Ltd. in Hong Kong, comments on the outlook for the gold and silver markets….

On central banks increasing gold stocks:

-END-

Now where do you think Hennecke received his input on the estimation that half the central bank gold is gone? No one in the world speaks of this sort of thing except the GATA camp. For that matter the mainstream gold world does not assign ANY gold out on lease except to the hedgers. NONE. NADA!!!

For Hennecke to even bring the staggering gold short position up is a BIG DEAL. The reason is that it will have more “big player” investors investigating what the heck he is talking about. It is only a matter of time before these players stumble across GATA (ironically, banned to be even mentioned by 99% of the US financial market media). When these investors do their homework, like we have, it has to be a "GOOD GRIEF!!!" Once an investor knows what The Gold Cartel has done, and the precarious position they are in, he or she has to start drooling over owning gold.

Hennecke operates out of Hong Kong. He has been aware of what GATA has to say for some time and stated as such (without mentioning our name) in the past. In that regard, we have another significant development as far as central bank gold is concerned (sent to us by eagle eye John Brimelow):

DJ MARKET TALK: China Should Raise Gold Reserves-Economist

0232 GMT (Dow Jones) China should raise its gold reserves to around 2500 ton in short-medium term, to over 3000 ton long-term to diversify FX risks, Teng Tai, chief economist at China Galaxy Securities, says in article published on state-run China Securities Journal…---END-

The China Securities Journal is run by the Chinese Government. Veteran Café members have read about the activities of the STAKLER(s) for a long time now in this column. We are positive the main STALKER is buying for the Chinese Government and have repeatedly said so. This is why I keep pounding the table that The Gold Cartel is in BIG TROUBLE! They have been found out. Governments and mega hedge funds are going after them. They now know how vulnerable The Gold Cartel is.

Why not go after them! We only have to review how profitable it can be to go after vulnerable shorts. It surely has been profitable for those taking on the copper shorts. The gold shorts are in far worse deeper doo doo than the copper shorts. Even if The Gold Cartel is allowed to escape a substantial portion of their 12,000 to 16,000 tonne short position via cash settlement, you have a nightmare situation for The Gold Cartel if only 10% of the shorts are forced to cover. How do you cover 1200 to 1600 tonnes of gold in a market which has a monthly supply/demand deficit of more than 140 tonnes per month? What about the billions of dollar worth of derivatives tied to many of these positions … the ones on the books of the BIS?

Do we have a gold buying panic coming? Perhaps …

Hi Bill,
I'm just back from Europe and wanted to mention an interesting chat I had with a big hitter investment banker in London. According to this fellow, the City of London is in a real panic over the Chinese copper default. Many London banks and dealers in the City are holding a big stinking bag right now and there are serious rumours that this default threatens the viability of the LME. This is not a trifling matter and would explain all the media chatter of copper going lower because of the default. Obviously, a delivery default of this magnitude is hugely bullish for copper. It certainly makes one wonder if this was a deliberate act by the Chinese to bring ruin to the Anglo-American hegemony in the world commodity and financial markets?

As the GATA camp knows, the gold market is poised for the mother of all delivery defaults. I also wonder if the COMEX will suddenly go to cash settlement for gold and silver? This may be the big telltale that there are more large stinky bags in the gold market.

Nick Ferris
J-Pacific Gold Inc.
www.jpgold.com

Good stuff Nick.

Like any market, gold can do anything on a day to day basis. However, the developments and market action over the past few months are highly significant. What was brought to your attention above is almost breathtaking in its scope and meaning. The demand to own gold is going to increase dramatically in the months ahead just as The Gold Cartel’s ammo is coming up lame … just as the gold supply coming out of the mines around the world shrinks further. The bad guys in the cabal have been found out. All they can do now is manage their retreat as best they can and keep the move up as orderly as possible in an attempt to prevent a gold derivatives neutron bomb from going off.

It won’t be too long before GATA’s DVD of Gold Rush 21 will be put up on the internet for the world to view. GATA intends to promote it heavily to attract as much view attention as possible around the globe. Bashful is not our way. If The Gold Cartel Mafia is choking now, wait until that DVD circulates all over the place.

What fun!

The PM Fix came in only slightly weaker than the AM one at $492.60.

The gold open interest only rose 378 contracts to 349,637, still leaving it more than 22,000 contracts below its high made when the price of gold was $40 lower. This is more evidence that a certain amount of long time shorts are parting company with The Gold Cartel. The lagging gold open interest, especially considering the extent of the gold move, confirms the surprising drop in gold derivatives on the books of the BIS the first half of the year. The fact that these derivatives were still as high on July 1, 2005 as at the peak of the gold producer hedges in 2001 is another matter.

A gapping up gold has only begun to break out from, and accelerate out of, the formidable base it formed between $458 and $478:

http://futures.tradingcharts.com/chart/GD/C5What is striking is the lack of bullishness out there. Most of the talk has been of $500 gold, some speaking of $525. There is a rare mention of $600. Little beyond that in the public domain. SO SO BULLISH!The trading in silver remains peculiar and I still think potentially explosive. There is no upside momentum yet as we have in gold. However, the big buyers (we believe Saudis among them) are lurking around on all dips. Silver was knocked down 5 cents mid-day and quietly came right back. The buyers are there, but will not pay up and are in no rush for the price to soar yet.

The silver open interest fell for a change … to 155,073, off 3079 contracts. Most likely this represents some liquidation ahead of the Comex option expiry today and to some further selling by former spec long Morgan Stanley.

Silver is breaking out of its base also and should accelerate from today’s close in the weeks ahead:

DEC silver
http://futures.tradingcharts.com/chart/SV/C5On another GATA related gold leasing note and a VERY possible reason gold is trading the way it is, let us not forget what Deep Throat brought our way over a month ago:October 15 - Gold $469.20 - Silver $7.80 *Deep Throat showed up. What was sent to GATA today was CONFIDENTIAL. I can only get into the basic subject matter, not delve into too many specifics, and not reveal our source. The essence of what was sent to us was the ILLEGAL gold/silver leasing scams are coming to an end. That the authorities are apprised that gold and silver have been leased out in an ILLEGAL manner and that those bullion banks doing the leasing do not have the gold and silver to back it up.

!!!!!!!! Confirmation from a totally different source of what Deep Throat previously sent our way about the illegal gold leases. This new, other source stated "we are more correct about the gold shorts being in trouble than we will ever know." While I cannot get into details at this point in time, both sources are very specific about what bank it is (one of the culprits) and they are the same in each case.

October 25 – Gold $472.30 up $7.60 - Silver $7.78 up 13 cents

Think it is very important to emphasize the information about the staggering amount of illegal gold leases brought to you by "Deep Throat" and our other GATA ARMY source. One confirmed the other. We are talking about MANY hundreds of tonnes of gold. Some of those who own the gold want it back, however, some of the banks don’t have it. It is gone. If they are forced to go into the marketplace, which is already in a supply/demand deficit to the tune of more than 120 tonnes per month, the price will go bonkers and could do so quickly. Should the large hedge fund sharks come to know more of what GATA knows, they could themselves create a panic. Those who want their gold back do not want a panic. They only want to be treated fairly and have access to their own gold.

***

Indian ex-duty premiums: AM $2.36, PM $3.39, with world gold at $493.15 and $492.55. Thinly, and comfortably, adequate for legal imports. India looks likely to buy on any downswing.

TOCOM was a buyer again this morning. Open interest rose the equivalent of 3,361 Comex lots (10.45 tonnes), volume jumped 121% to the equivalent of 89,962 Comex lots, the active contract closed up 12 yen and world gold went out $3.80 above the NY close. Mitsubishi, which explicitly reports buying by the public, implies that they raised their long by 12.6 tonnes, to 207.2 tonnes. This is a lot. Japan is closed tomorrow, which may give the bears a rest, although the heavy ACCESS volume suggests that not only the Japanese are active in their trading day.

The ECB has announced three "Eurosystem central banks" sold E226 Mm of gold last week, which at the current book value equates to 17.88 tonnes. While less than the 31.49 tonnes sold in late October when gold was moving back into the $470s, it is still double the amount needed to keep pace with the WAG2 quota, and the second largest since the massive sale by the ECB itself sometime in March. Gold rose $17 in the face of this opposition, which is impressive.

On the other hand, it is clear the ECB is boosting sales to meet price strength, rather than selling regular amounts, weekly as the Swiss did. One wonders why.

Not only do we have Putin suggesting the Russian Central Bank should increase its gold reserves today – see:

http://www.interfax.ru/e/B/politics/28.html?menu=1&id_issue=11424471 ,

but there is a similar story from China.

02:32 22Nov2005 DJ MARKET TALK: China Should Raise Gold Reserves-Economist

DJ MARKET TALK: China Should Raise Gold Reserves-Economist

0232 GMT (Dow Jones) China should raise its gold reserves to around 2500 ton in short-medium term, to over 3000 ton long-term to diversify FX risks, Teng Tai, chief economist at China Galaxy Securities, says in article published on state-run China Securities Journal.

(This was shared with me by a Lynx-eyed observer in London, who points out that the China Securities Journal is a State organ.)

On Monday, Comex apparently traded an enormous 187,020 lots, about 100,000 net of the switch effect. Open interest hardly moved: up 378 lots. Trading in a narrow $2 range, NY gave in retrospect the impression of a major stanoff, resolved as it happens to the upside.

Although the absence of TOCOM tomorrow may give the bears a chance to reverse direction, the condition of India suggests they will not make much progress. Facing two days without the Comex to temper the activity of the main buying markets cannot be soothing. Especially if position building on the new Dubai Exchange come into play to any significant degree.

JB

CARTEL CAPITULATION WATCH

Crude oil is on the move again ... back up to $58.84 per barrel, up $1.14 on the day.

US economic news:

14:02 FOMC minutes from 11/1 meeting reveal that policy will become "increasingly sensitive" to data
The remark concerning the increasing sensitivity to data suggests that policy makers believe the funds rate is becoming less accommodative and that future hikes are less a matter of certainty, and more reliant on incoming data. Supporting that view, the FOMC also indicated that a change in the language of the policy statement would likely be needed before long.
* * * * *

4:13 Treasuries, homebuilders rally following FOMC minutes
The suggestion in the minutes that future rate hikes might be more dependent on incoming data has prompted a sharp rally in Treasuries, particularly at the front of the curve. The 2-year spiked almost 7/32 and is now +4/32. The 10-year has also rallied and is +7/32, though the yield move was more pronounced at the short-end. Stocks are rallying as well, led by interest rate sensitive sectors such as mortgage lenders and homebuilders: the HGX housing index is at 517.69, (0.63), but up over 4 pts since the minutes were released.
* * * * *

The dollar dropped a fair amount following the release of the Fed minutes. It sank to 91.40, down .54. The euro rose to 118.22 after making a 117 low. Odds are this is the end of the dollar move up. A move down in the dollar will put a wind at gold’s back.

It is amazing that all the financial/economic ills plaguing the US are still accelerating, yet the Fed is hinting at stopping rate hikes, enough so to move the market. The reasons for the price of gold to skyrocket get better and better by the week.

This could be a surprise:

11:17 PDG NEM signs secrecy pact with PDG - Dow Jones
Cites a source.
* * * * *

Week after week reports keep coming in of declining gold mine supply. Here is another one:

ECONOMY
Gold output dives 15%

Mon, 21 Nov 2005

South African gold production in the September quarter declined by 15.4 percent year-on-year to 72.4 tons, the Chamber of Mines said on Monday.

On a quarter-on-quarter basis, the September quarter's gold production was down 1.3 percent after a 3.9 percent decline in the June quarter, as the extent of restructuring by South African gold mining companies slowed.

In August, Harmony Gold completed the restructuring at its South African gold mines after having started the process in April 2004.

The restructuring was a result of the fall in the rand gold price and rising cost pressures in 2003 and 2004, the chamber said.

Total production declined by 12.5 percent on a year-on-year basis for chamber member gold mining companies, and by 0.9 percent on a quarter-on-quarter basis, to 62.6 tons in the September quarter.

http://business.iafrica.com/economy/592804.htm-END-

A heads-up from JD:

Bill: Just received a phone call from a good friend who is in Bangkok. All over their financial press is the Thai government calling in all the Gold dealers and telling them to stop accepting orders to buy gold. They are claiming that it is negatively affecting their trade balance. Got to love it.

***

Adrian on gold and Google:

Bill,
http://www.latimes.com/business/investing/la-fi-gold22nov22,1,4158904.story?coll=la-headlines-business-invest
The opening theme of this article is somewhat silly as clearly there is no race between Google and Gold for the $500 mark. But there is a remark worth noting

QUOTE: "The gold genie has been let out of the bottle, and we are looking at $500 an ounce by the end of 2005 and $600 by the end of 2006 on momentum alone," said Thomas Au, an analyst at R.W. Wentworth in New York.- END

It sure is out of the bottle…..which means his price predictions are about as silly as the article’s race between Google and gold for $500!
Cheers
Adrian

Rhody on the lease rates:

Hi Bill:
Gold lease rates slipped into backwardation this morning with at .03% surge in the one month lease term, while the one year remained unchanged. That puts the one month to one year spread at a NEGATIVE .03%. I think this signals desparation on the part of the CABAL and a frantic need to get the price of gold down for options expiry today. I sure we will have an all out effort to stampede the paper trade into liquidation. There remains only the question of how many new buyers actually want the metal or the cash.

Silver lease rates were mixed, as were platinum's, but palladium surged across all terms, up a constant .10%. The magnitude of the palladium lease rate surge is notable.

Meanwhile, over on COMEX, another 500,000 ounces of silver were delivered yesterday, with the total so far this month reaching 1, 750,000. This is not a normal delivery month for silver.
Regards, Rhody.
http://www.kitco.com/market/lfrate.html

More on the lease rates from another savvy Café member:

http://www.kitco.com/market/LFrate.html

Since the leasing of gold is primarily done by bullion banks as agents of central banks, I interpret this to mean the banks are suddenly less willing to part with their gold ... They want to hold onto it? Buyers are paying more for it and making the leasing-out proposition less attractive? Greater demand for short-term gold by potential gold lessors who need it to cover their gold shorts driving lease rates up? One can put a variety of specific interpretations upon the data -- people often say it's a sign of backwardation or a short squeeze -- but no matter the specific interpretation, it's a pretty clear signal that our nacent 2nd-phase gold bull market is up, up and away.
Cheers,
Marcia

The rest of the Hennecke/Bridgewater comments on gold and silver:

On interest rates and gold:

-END-

Chuck checks in with some input which causes some grins:

Bill:
Looking at the Hui as well as the total lack of participation of the exploration companies and the continuing move in GG, I am more and more certain that this move will take us up to at least 500 on the HUI. This opinion is based upon this long-term HUI chart

I think that the next 2 or 3 months will be monstrous for the gold shares. Chuck

The following will appeal to us investors in smaller gold companies who have watched the price of gold soar $70 only to watch many of the shares of these companies do nothing, or worse, fall. It has been aggravating to say the least. Eric Hommelberg is sharp as they come. I suggest everyone visit his web site.

Hi Bill,
Hereby a note re the lack of performance among the smaller explorers..

Many investors are wondering how even a $500 gold price can’t even lift the smaller juniors.. In fact I’m receiving lots of such inquiries these days..

My answer is: It’s all in the HUI and there’s nothing to worry about.

Sure, those juniors in a discovery stage or sitting on a huge resource base are doing quite well these days (eg Seabridge, Virginia Gold Mines).

That’s logical since juniors making discoveries are doing well anyhow with or without higher gold prices. We follow these type of companies extensively in our news letter ‘The Gold Discovery Letter’ and some results are really stunning. So when the gold price starts to rise they will be among the first to appreciate further followed by companies sitting on huge proven resource bases.

And what about the smaller explorers? Well, they will be the last to participate and if history is any guide of what lies ahead of us they will do so after the HUI breaking its long term resistance at 250 and making new highs (>258).

Now let’s take a peek at the HUI chart of 2003. The HUI had struggled for a long time to breach its long term resistance at 155. Finally in July 2003 the HUI managed to slash its 155 resistance and never looked back. And the smaller explorers? Well, they didn’t participate immediately in the HUI rise, many of them took off within a month after the HUI break out.

The situation today has a striking similarity with 2003, see charts below:

You see where we are today?

My point is that if 2003 could be any guide for what lies ahead of us then the window of buying opportunities for the smaller explorers could be closing down fast.

Again when the HUI broke its long-term resistance of 155 in 2003 it still took a few weeks before the smaller juniors took off, but when they took off they took off really fast and yes many of them appreciated by a multiple of 100% in just a couple of months (see example junior chart below, stock took off 4 weeks after the HUI broke its 150 long-term resistance.)

Summary:

· 2003: smaller juniors hardly participated in rising HUI from 92 to 155. The smaller juniors took off AFTER the HUI broke its long-term resistance of 155.

· 2003:Window of buying opportunity for smaller juniors after the HUI broke its long-term resistance of 150 was just about a few weeks.

· 2005: smaller juniors hardly participated in rising HUI from 165 to 250. If the HUI can manage to slash its long-term resistance at 250 and making new highs (>258) then the window of buy opportunities for the smaller explorers could be closing down fast.

Example of a small junior taking off AFTER the HUI broke its long-term resistance of 150 in 2003:

So to the worried shareholders of the smaller exploration firms I would say, just hold on to your shares and wait for the HUI to make new highs.

All the Best,

Eric Hommelberg
ehommelberg@golddrivers.com
The Gold Discovery LetterThe last chart Eric has up there is of Samex Mining (43 cents as of tonight's close), which tanked the past two years like a bunch of the other smaller golds. Both Eric and I have substantial positions in Samex.

The XAU rose 1.03 to 119.06 and the HUI gained 1.49 to 254.81. A mid-day raid on the gold shares with gold up $5 failed completely.

I am off to San Diego tomorrow morning to hook up with my Mom and brothers and sisters for Thanksgiving. Might have a MIDAS out tomorrow, might not. However, if not, will definitely get one out on Friday.

This is as important a MIDAS as I have ever written since The Café opened over 7 years ago. If there was one MIDAS for investors to read around the world (even the recalcitrant financial market press), this is the one. GATA would appreciate it if you could get this one around over the holidays. Time to pour it on The Gold Cartel and make them sweat as much as we can.

Gold has made its surging move without help from outside financial markets and other factors normally cited as reasons for gold to move higher. THAT IS ALL TO COME and will assert itself in the months ahead. After the Fed Minutes were released this afternoon, US bond and note yields fell and the dollar weakened. The probability for gold and silver to accelerate from this price level in the weeks ahead just INCREASED.

The price of gold is going to go far higher (more than $2,000 per ounce) than most anyone on Planet Wall Street and the mainstream gold world can conceive of.

Gold, silver and the shares remain THE historic investment opportunity of a lifetime.

GATA BE IN IT TO WIN IT!

Appendix

http://www.john-f-kennedy.net/thefederalreserve.htmBill,
I would like to suggest that you make a mention of the 42^nd anniversary of the Assassination of JFK. The assassination remains an unsolved crime after all this time even though the most important man in the world at the time was shot in full public view. Forensic investigations since that fateful day in 1963 have proven that Oswald could not have been the lone gunman (if a gunman at all). That means that this was without a doubt a conspiracy. This event has much relevance to GATA; while the assassination of JFK was a conspiracy to kill the most important man in the world, the conspiracy to manipulate the gold price is simply the most important conspiracy in the world.

I realize there is much controversy over Executive Order 11110 that President Kennedy signed which seemingly made an attempt to put the Federal Reserve out of business and replace the Federal Reserve Note with a silver backed United States Note. However, it can not be denied that JFK in many things he did had the courage to go up against some of the most rich and powerful men who were corrupting the system. It is probably what cost him his life. His assassination marks a turning point in US history because, while no political machine is ever altruistic or entirely honest and forthright, the fact that a President could be eliminated and a successful cover-up put in motion ushered in a new era which is still with us today where the moral and ethical limits of what is acceptable are restrained only by what anybody can get away with.

I think we should salute him on this auspicious day.

Regards
Adrian