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Another All-Time Gold High Amidst Little Fanfare/Silver: $22 And Headed North

By: Bill Murphy,

-- Posted Thursday, 30 September 2010 | Digg This ArticleDigg It! | | Source:

September 29 – Gold $1308.50 up $2.50 - Silver $21.93 up 24 cents

A little bit of retro and a stroll down memory lane. Nearly a year ago…

October 6, 2009 - Gold $1038.60 up $22.20 - Silver $17.27 up 74 cents

All-Time High Gold … Just Jacks For Openers!

In place of the usual quote on this historic gold day:

GATA’s battle plan to defeat The Gold Cartel way back when was based on "The Enveloping Horn" strategy of Africa’s greatest general, the Zulu Chieftain warrior Shaka. This is for Peter Grandich, who is disappointed whenever I make a presentation and don’t include it as I did once in Vancouver…

zulu.mp3 (345kb)

Well, that Jacks For Openers call was right on … more retro re Shaka and GATA below.

Looking at gold and silver for the day…

*Think The Gold Cartel is running for the hills? Nope, it was a vintage PLAN A attack this morning when their London traders reported for work at 3 AM NY time. Gold was dropped $6.

*More of the pundits and investing crowd are looking for a significant correction than an upside surge … actually MOST of them. How nice to have so little company in the bull camp….

What rally?

It's hard to say anything negative about the recent price action. And yet:

(Kitco News) -- Tuesday's rally ... "Normally, these are all the ingredients that would/should make one very bullish," says Ken Morrison, editor and founder of the online newsletter, Morrison on the Markets. Yet he signals caution for bulls and says there might a sell-off ...

(Kitco News) -- Newsletter editor Dennis Gartman says he urges caution on investing in gold right now, given the big rise in price. "It is not just over-extended to the upside; it is hyper-extended."

Hyper-extended? Maybe the FRN is hyper-extended. I guess where you stand depends on where you sit.

*While yesterday’s comeback created a good deal of commotion, the market and bullish sentiment is as quiet as I can recall, relative to the price action, which has been stupendous for a couple of months, and especially of late.

*While the senior gold/silver shares are lagging the precious metals, a number of the juniors and exploration companies remain comatose. Some of the shares in these firms did not even trade yesterday. It is bizarre beyond belief. There is almost NO understanding in the investment world of what these moves in gold and silver are all about … and almost NO understanding of where their prices are going and why.

*The AM and PM Fixes came in at a very steady $1307.50 … all-time highs. The silver Fix was even better at $21.87.

*Silver continues to act remarkably. It crept up last night over $21.80+ and stayed positive this morning, even when gold came into slight liquidation pressure. Ever since silver rebounded from $17.50, and began to trade so differently, it has been my contention that silver was "in play.’ The price action ever since then suggests this is the case.

*Silver has rallied $3 an ounce since our STALKER’s brilliant London trader announced his big clients wanted to be long physical silver and were. They are not alone, which is why silver keeps moving up. JP Morgan could be in BIG trouble.

*Both gold and silver made new highs on the Comex hours after the opening. Those were rare events in the past. Gold made it to $1312, following silver as it briefly printed $22 per ounce.

*Gold, and especially silver, crept up SOOO quietly as the Comex session proceeded … dink rallies. It tells me the silver shorts are looking at each other again with that UH-OH look. This quiet action is not a sign of a short term top … more of a prelude to an explosion.

*The further gold moves away from $1300, the more likely a sharp burst, which will have the pundits talking of $1400 gold.


*While the dollar was weaker this morning, gold and silver trading down, and then up, regardless of that dollar weakness.

*The gold open interest continues to mount. It went up 3778 contracts to 619,408, another all-time high. This means yesterday’s stunning comeback was not due to the bums trying to cover, but to new buyers who want in below $1300, and then wanted more when it cleared that level comfortably.

Dave from Denver late yesterday…

Gold open interest

Bill, tomorrow is actually first notice day for Oct gold/silver. Anyone who is not funded in their account to receive delivery or trades in an account that does not permit delivery (all online discount bucket shops) has to be out by end of the early access session today - Tuesday (5 p.m. NY time) or they get liquidated. That actually happened to me once with Tradestation lol.

Anyway, I just noticed yesterday's gold o/i comment in Midas. If forgot to look at o/i today or I would have had something to say about that 3270 increase in Oct gold. That's pretty remarkable because a pure speculator would just buy December gold. There's no real cost-advantage to trading Oct over Dec and Dec is actually a bit more liquid. In fact, for 2 trading days before 1st notice, that 24,598 o/i for Oct is quite massive. I'm surprised no one has mentioned this - shows you how apathetic the market is right now.

And now that I think about it a bit more, the early smashing of gold, which started when the LME this morning (Tuesday) was a clear attempt by the cartel to "shake" out a big part of those 24.5k longs. They failed judging by the move gold made after the initial Comex opening b.s.

I'm more interested in seeing tomorrow's o/i number, because then we'll have a better idea of just how many traders may ultimately stand for delivery. However, there is no question in my mind that most of that 3270 was put on yesterday with the intention to take delivery. October will be an interesting month for many reasons, and the Oct Comex gold o/i makes it that much moreso.


*The silver open interest continues to grind higher also. It rose 2331 contracts to 154,219. JP Morgan is either licking their chops as they organize one of their usual raids, or is freaking out behind the scenes. The game is all about the physical market. If it is seizing up, JPM will make like General Custer in the Battle of the Little Bighorn.

Behavioral Finance Report

*The rising Dow is needed to counter falling consumer sentiment.

*The yield on the 10 yr T note remains in the cellar at 2.5%.

*Gold continues to rise. Yet few in the mainstream gold world and on Planet Wall Street are calling for gold to soar. The Muppets on CNBC seem to be bewildered. They are bewildered. The last time I was seen in Muppet Land was February of 1999 … been banned ever since. Nothing like being put in the penalty box for being so right.

The dollar was last down .16 to 78.78. The euro rose .0054 to 1.3621. The pound was off .0016 to 1.5788. The yen rose .27 to 83.66 ... so much for the yen intervention.

Crude oil gained $1.68 per barrel to $77.86. Of note: the less speculative Brent crude is still around a $2.50 cent premium to WTI, which is bullish.

Copper gained 3 cents to $3.67, as the copper bears continue to get buried.

The CRB went up 1.58 to 285.93.

More gold goodies:

Tuesday, September 28, 2010

Bear Curry: A Kursk Offensive disaster for gold's opponents

Evidently giving the Bulls "F for effort" yesterday was unjust. The CME Final for Monday reports that volume was actually 102,522 lots, a startling 34.38% above estimate, and open interest jumped an even more startling 10,565 lots, 32.86 tonnes or 1.74% to 616,130 lots, decisively an all-time record high. Gold it will be remembered declined throughout the floor session. Evidently some pretty determined selling was going on - by the looks of today’s action much of it was short. Gold’s recent "Phony War" ended yesterday.

Indian ex-duty premiums: AM $4.36, PM $5.03, with world gold at $1,292.72 and $1,288.20. Ample, and lavish for legal imports. This was despite the rupee slipping 0.3% to close at $1= R45.15 (R45.01). The stock market closed flat: down 0.06%.

Local Vietnam gold jumped to a premium of $9.90 to world gold of $1,293.30 early Tuesday morning (Monday 15c/$1,295.40).

Shanghai gold closed at a $5.72 premium to world gold of $1,285.68 on volume equal to 6,417 NY lots (Monday $4.01/$1,298.36). This may overstate the Shanghai premium by a dollar or two as $US gold started sliding towards the end of the Shanghai session.

One of the painful puzzles for gold’s friends in the mid and late 90s was the failure of China to maintain the strong gold consumption growth trajectory seen earlier in the decade. A World Gold Council official has now stated that this was the result of deliberate hindering of the gold trade by the Chinese authorities for macroeconomic policy reasons, a policy now ended. See

This situation was suspected, but if memory serves the WGC never gave it public credence.

Japan remains on the sidelines. On day session volume equivalent to 5,180 NY lots (less than Shanghai for an unusual second day) open interest slipped 0.393 tonnes (126 NY) and the public cut 0.133 tonnes from its long. The active contract closed down 21 yen and world gold, while barely changed during the session went out $4.30 below the NY 4PM level.

The ECB weekly statement of condition indicates no change in "gold and gold receivables". Last week one CB sold E22Mm (0.67 tonnes).

Today it appears the Bears followed through on yesterday’s assault, with a massive selling raid at the European open. Dec gold at its low was down $22.40 at $1276.20 and the AM fix at $1,289 was $8 below the Monday PM level. As the Indian premiums indicate, this effort produced huge buying. After a final effort to regain momentum on the NY open, the Bears broke on somewhat gold-friendly economic data and an enormous rout ensued. Dec gold closed up $9.70 at $1,308.30; aggregate volume was an enormous 208,540 lots.

While most commentaries focus of $US weakness during the NY day, Euro gold in fact followed $US gold quite closely. Today’s dynamic was that a Bear raid of great size was destroyed by Eastern physical demand, notably Indian.

A Kursk Offensive disaster for the Bears? Today’s historic action must leave them in chaos.


Tuesday, September 28, 2010

Bears need Plan B

Dec gold on Tuesday traded across a more than $35 range and settled up $9.70 at $1,308.30. Estimated aggregate volume was a very heavy 208,540 lots. By 4PM gold had gained another $1.50 to stand $11.80 (0.89%) higher than Monday’s stock market closing level.

At JSMineSet Dan Norcini remarked of today’s action:

"The surge off the session low into a new record high is as impressive as any chart I have ever seen. One can only imagine the mental state of the shorts…"

Since not everyone follows the CME data (or even the early day trading) many probably do not appreciate the magnitude of the Bear rout.

The gold shares showed some inkling of the stakes. Just after their 9-30AM NY open gold experienced what turned out to be only a minor ($5) correction of its first recovery, taking gold down to $6 loss on the day. The HUI and XAU collapsed, getting down to down 1.82% and down 1.79%. They recovered on gold’s surge and went on to close up 2.61% and up 1.94%. There is now a serious possibility that both will surpass their spring 2008 highs (made on gold’s first foray to slightly over $1,000).

The CEF bullion vehicle jumped to a 9.4% premium to NAV (Monday 7.4%) but PHYS, curiously, dipped to 2.5% (3.49%). The GLD ETF added 5.16637 tonnes to 1,305.68776 tonnes.

MarketVane’s Bullish Consensus for gold added a point to 80%. It was last in the 80s in January. The HGNSI was unchanged at 59.2%.

Early on Wednesday morning, local Vietnam gold stood at a $9.90 premium to world gold of $1,308.70 (Tuesday $9.90/$1,293.30).

With the classic tactic of climactic capping selling followed by a powerful raid having failed so badly, the Bears need help.


Wednesday, September 29, 2010

Gartman suggests Top

The CME Final for Tuesday reports that on volume of 243,155 lots (16.6% above estimate) open interest rose only 3,278 lots - 10.2 tonnes or 0.53% - to 619,408 lots. No doubt a considerable proportion of the 33 tonne open interest growth on Monday was shorting which had to be covered yesterday. Open interest is of course a record

Indian ex-duty premiums: AM (87c), PM ($1.37) with world gold at $1,311.54 and $1,310.62. Slightly below legal import point. A very respectable performance, given the shock of gold’s c. $20 rise after the end of the Indian business day. Much helped by a further 0.5% rise in the rupee, closing at $1= R44.95 (Tuesday R45.15). The stock market however slipped 0.74%.

As noted earlier, local Vietnam gold stood at a $9.90 premium to world gold of $1,308.70 (Tuesday $9.90/$1,293.30).

Shanghai gold closed at a 3c discount to world gold of $1,310.40 on volume equivalent to 7,471 NY lots (Tuesday $5.72/$1,285.68). The Yuan firmed again – it has now appreciated a whole 2.08% since the $US "depegging"!!! After tomorrow, China will be closed for over a week.

Japan was again non-committal. On day session volume equivalent to 7,863 NY lots open interest edged up 1.237 tonnes (398 NY) but the public shaved 0.226 tonnes (0.4%) from its long. At first glance the lack of public liquidation is surprising, but the reality is that while $US gold gained $40 in the past two weeks Yen gold has been moving sideways courtesy the strong yen. The active contract closed up 25 yen and world gold gained 1.50 during the session to go out $1.80 above the NY 4PM level.

Many, of course, are looking for a top. Amongst these is The Gartman Letter, which persuasively commented this morning:

"Usually the requests for interviews from various media outlets runs to two or three a day, and almost always the requests are for a different market for each interview. Lately, however, the interview requests have doubled and tripled and they are universally regarding gold. Even when we try to dissuade the interviewee from asking about gold, and even when we try vainly to direct the conversation to equities, or debt, or the forex market, or political developments, the demands are always to redirect to the gold market. Nothing else matters; it is gold 24/7 and that has always… ALWAYS… marked a top."

TGL goes on of gold:

"It is not just over-extended to the upside; it is hyper-extended. It is not just overbought; it is hyper-overbought. We cannot strongly enough urge everyone to avoid buying gold here and we shall go so far as to suggest that those who are long begin the process of quietly heading for the exits and to reduce their positions to the most minimal "insurance" positions possible."

However, The Gartman Letter does not touch its own gold holdings, 2 out of 13 "units" in its model portfolio. One wonders how many portfolios have 15% gold "insurance".

Vertigo is certainly understandable. But a top with the sentiment indicators (MarketVane and the HGNSI) comparatively low and gold shares yet to clear their 2008 highs is certainly not mandatory.

Today Dec gold edged to an up $6.50 high at the European open: pre session volume was heavy at some 41,000 lots. Subsequent volume has been moderate: 86,963 estimated at 11AM NY time with gold drifting down.

Further advance in the short term of course requires renewed heroism by NY elephants. However, on the evidence so far yesterday’s move has not taken gold decisively out of the range of the key physical buyers.


You have to be kidding me! Never in the history of the gold market has anyone traded gold so poorly as Dennis G. My guess is he has been on the wrong side of the market more than the gold price has gone up the past decade, which is over $1,000 an ounce. That would be hard to do even if you tried. And yet, he is the one besieged by the press.

Once again, as has been the case for a decade, DG refuses to deal with how The Gold Cartel affects the price. Of course the market can correct at any time (no way am I going to jinx us), but if anything gold is UNDERbought because of the daily price-capping by The Gold Cartel with their 1% limit gain drill. They refuse to let the price run higher, as it would in a free market, so that it can get really overbought … at least at these price levels.

What I do know is that if DG is calling a top, that is as bullish as it gets. His last public call was to go short at $1168.

Look in the mirror

Hi Bill,
I hope you are well. You looked great on BNN. The interviewer came across as a bit of a dope. He is no Jim O'Connell [I sure do miss him}.

I have thought for a long time that people are staring at the investment of a lifetime every morning. It is looking them right in the face.

It is Right in front of them. The silver in their mirrors, that gives them a look at their beautiful mugs. So often we seem to miss the obvious. That is my take on silver and the public. It would make for good advertising for a silver mining company, in my humble opinion. The "Investment of a lifetime stares you right in the face". A bit of a
fun one, anyway.

I have ranted against Gartman many times before, as you know.

I see nothing has changed in his little world. He is as charming as ever, but full of fluff.

And people actually pay him. Good on him, I guess.

As always, keep up the great work.
Cheers, Greg P


The DOW fell 23 to 10,835 and the DOG lost 3 to 2376.

U.S. economic news:

07:02 MBA Mortgage purchase applications index +2.4% in 24-Sep week; total market index (0.8%)
o compares to (3.3%) and (1.4%), respectively, in prior week
* refi index (1.6%) vs. (0.9%) in the prior week
* 30-yr contract ARM rate (6)bp vs. the prior week to 4.38%
* 1-year ARM contract rate +8bp vs. the prior week to vs. 7.04%
* * *

US home loan demand down despite record low rates

NEW YORK, Sept 29 (Reuters) - U.S. mortgage applications fell for a fourth straight week, reflecting the inability of many homeowners to take advantage of record low interest rates, data from an industry group showed on Wednesday.

Demand for loans to purchase a home, however, rose for the first time in three weeks, offering a glimmer of hope for a housing market that is struggling to stand on its own without government support.

The Mortgage Bankers Association on Wednesday said its seasonally adjusted index of mortgage applications , which includes both purchase and refinance loans, for the week ended Sept. 24 decreased 0.8 percent. The four-week moving average of mortgage applications, which smooths the volatile weekly figures, was down 3.3 percent.

The MBA's seasonally adjusted purchase index , a tentative early indicator of home sales, increased 2.4 percent. Jim Gillespie, CEO of Coldwell Banker Real Estate LLC. in Parsippany, New Jersey, said the weak labor market has kept many potential home buyers sidelined.

"They have been showing up for open houses, but are not ready to make a purchase," he said. "There is a lot of pent up demand, but the housing market will not pick up steam until unemployment decreases and the economy picks up steam."

"It does not matter how low interest rates on mortgages are, if you do not have a job or fear you may lose your job, you are not going to buy a home," he said…


10:30 DOE reports crude oil inventories (500K) barrels vs. Reuters consensus (300K) barrels
* Distillate inventories reported (1.3M) barrels vs. consensus +400K barrels
* Gasoline inventories reported (3.5M) barrels vs. consensus +500K barrels
* * * * *

When Meredith Speaks, You Should Listen

29 September 2010By Greg Hunter

I was pulling up to a store yesterday in my car, listening to CNBC on XM Radio, when an interview with banking analyst Meredith Whitney came on. I shut the car off and listened because, over the years, I have learned when Whitney talks, everybody should pay attention. There are only two reasons why I think this way: (1) Whitney has a track record of many good calls on the economy and banking. (2) Her predictions are usually spot on…



Aussie Dollar at record monthly highs,..

This seems to be slipping through the radar up here in the Northern Territories,..

Unless there’s a major about turn before close of play tomorrow night, the Australian Dollar is going to be notching up a record monthly close,..

One more jab in the eye for the non commodity fans,..

Big move of almost 10% in the last month!..
Rich (Live from ‘The Scarborough Bullion Desk)

China criticises weak U.S. dollar policy

* Says budget deficit, quantitative easing weakening dollar
* China urges U.S. to stabilise dollar

GENEVA, Sept 29 (Reuters) - China said the United States should take action to stabilise the dollar, criticising Washington's expansionary monetary policy for weakening the currency despite its key role in the global financial system.

The comments by a Chinese official at a meeting of the World Trade Organization came as the U.S. House of Representatives was set to pass a bill putting pressure on China to let the yuan rise faster.

China's ambassador to the WTO, Sun Zhenyu, told a review of U.S. trade policy that the dollar played a unique role in the international monetary system while U.S. policy had a significant impact globally.

"We are very much concerned about how the U.S. would take practical and responsible measures to prevent the dollar glut and maintain the stability of the currency," Sun said.

China had raised the same question at the last U.S. trade review in 2008 but had not received an answer.

Sun said the dollar had been depreciating for eight years, while the U.S. government had run a growing budget deficit, resulting from an expansionary monetary policy, particularly quantitative easing -- purchases by the U.S. Fed of bonds and other assets to expand its balance sheet -- since the crisis.



The view on gold and silver from Singapore…

Gold hits all time high, eyes on Fed's next move

By Lewa Pardomuan

SINGAPORE (Reuters) - Gold hit a lifetime high on Wednesday, its 10th record in 12 sessions, as the dollar dropped against a basket of currencies on expectations the Federal Reserve would take new measures to shore up the economy.

Silver surged to a 30-year high as ETF holdings jumped to another record, palladium rose to a five-month high to track higher base metals prices, while a firm yuan raised hopes of more buying from gold consumers in China.

The Fed is likely preparing a fresh round of quantitative easing measures to announce at the end of its November 2-3 meeting, a report by influential hedge fund adviser Medley Global Advisors said on Tuesday, a source told Reuters.

Gold rose as high as $1,312.05 an ounce and was at $1,311.55 by 0453 GMT (12:53 a.m. EDT), up $4.15 from New York's notional close. U.S. gold futures also surged to a record.

"We are on a bullish mood. The economy in the U.S. is weak and the Fed will be launching some more rescue packages," said Ronald Leung, director of Lee Cheong Gold Dealers in Hong Kong. "The appreciation of the yuan causes some people in mainland China to buy a bit of gold."

London silver fix price reached $25 in September 1980, according to The Silver Institute, a U.S.-based industrial group. Silver's main sources of demand are for use in industrial applications such as semi-conductors and jewelry.

The world's largest silver-backed exchange-traded fund, the iShares Silver Trust, said its holdings rose to a record of 9,756.04 tonnes by Sept 28 from 9,613.02 tonnes on Sept 24.

"Silver is cheaper is compared with gold. Even at $25, it is still cheap," Lee Cheong Gold's Leung said. "I would say silver still attracts some buying. The industrial side has to buy."…


Then we have the view on silver from GFMS, one of GATA’s most vociferous critics over the years, and an ally of the World Gold Council. Like Jeff Christian and The Nitwit, they have been bearish most of the way up as they have had the gold supply/demand fundamentals wrong for a decade, due to their failure to account for central bank gold used in the gold price suppression scheme … central bank gold which is now hard to come by to meet surging demand.

Silver's rise vulnerable to correction in industrial commodities

According to GFMS, while silver looks set to continue benefitting from strength in gold prices, it is at risk of a correction if poor economic growth hurts industrial commodities

Author: Jan Harvey (Reuters)
Posted: Tuesday , 28 Sep 2010

BERLIN (Reuters) -

Silver, trading at 30-year highs, looks set to continue benefiting from strength in gold prices but is at risk of a correction if a sluggish economic recovery hurts industrial commodities, metals consultancy GFMS said.

Silver has benefited this year from a hefty rise in gold prices, which peaked at a record $1,300 an ounce earlier in the session, and are up some 18 percent this year. Silver hit a peak of $21.61 in earlier trade, its strongest level since 1980.

As well as riding gold's coat-tails as an investment metal, silver, which is used in industrial applications such as electronics manufacturing, has benefited this year from hopes industrial activity will recover after the recent downturn.

But if this fails to materialise, and if gold prices were to lose momentum, then the smaller and more illiquid silver market would be liable to underperform, GFMS Chairman Philip Klapwijk said on Monday.

"If there is a short term correction in gold, there will be a much bigger one in silver," he told Reuters on the sidelines of the London Bullion Market Association. "Silver is looking more toppy than gold."

"If you think gold will continue to advance in the medium term, then why wouldn't silver necessarily follow suit? One reason could be that if economic prospects take a bath, that side of the argument for silver becomes a lot weaker."

"In the current situation, silver is benefiting from both general optimism on industrial production in emerging markets, and the investor interest in safe-haven assets like gold."


Silver has benefited from rising interest from the fund community, particularly in the United States, Klapwijk said, where the white metal has historically had a higher profile as an investment metal than in Europe.

"Amongst the hedge fund community (in New York) I saw quite a lot of focus on silver... for the reason of outperformance," he said. "In a narrow market... money coming into the market would have a proportionately greater effect of prices."

"Also, demand in silver is extremely price inelastic. If you see silver going to $30 an ounce, you are not going to see the supply response in the way you you would with gold," he added.

"In gold, there is scrap that can come back to the market quite quickly from jewellery stock."

He said that for the moment the overall environment still looks positive for silver prices.

"Silver has definitely benefited recently from a bit more optimism about global economic prospects in general and specifically the view that China is looking stronger, and that emerging market demand will be particularly good," he said.

"Generally the positive sentiment recently has tended to win out over the negative," he said, but added that prospects remain for a double-dip recession.

"That, in fact, will eventually hove into view, and some of the optimism regarding economic prospects will dim a bit," he said. "That will probably have an effect on silver prices."

(Reporting by Jan Harvey; Editing by Anthony Barker)


While the likes of GFMS have been fighting GATA since our inception, we have been winning the day. We got it, they did not. To boot, our strategy was far superior than theirs was. Some more retro, which might bring some smiles to veteran Café members…

September 21, 2008 - Gold $861.40 - Silver $12.41

The Financial Market Press / "Horns of the Buffalo 21"

This request is coming as a result of an oldie but goodie. GATA’s battle plan to defeat The Gold Cartel was fashioned after that of Africa’s greatest general, SHAKA. In 2001 I toured South Africa, the country and people most affected by the heinous Gold Cartel’s activity, in preparation for our GATA African Gold Summit on May 10, 2001….

"THE KING and I"

The following photo was taken at the Royal Hotel in Durban, South Africa of King Goodwin Zwelithini, leader of the Zulu people, and Bill Murphy, Chairman of the Gold Anti-Trust Action Committee. King Zwelithini is a direct descendant of the great emperor Shaka Zulu, Africa's greatest general.

The King was very receptive to GATA's claims and asked his aide, Moses, to call South Africa's Deputy-President Jacob G Zuma on our behalf. The Deputy-President is also a Zulu.

Our battle plan to defeat The Gold Cartel was fashioned after Shaka’s famous war strategy, The Enveloping Horn, and was given some further press coverage in Durban…

The copy to this Durban, South Africa news story was already distributed to the Cafe. However, as it also relates to Shaka, I am presenting a visual of the original so that you can see the dimension of the coverage GATA is receiving in South Africa. The maroon book I am holding up is Frank Veneroso's 1998 Gold Book. Impi, by the way, means war in Zulu.


Gold market impi:

Bullion campaign sets sights on $600/ounce price

A pin-striped impi of gold warriors is taking on the might of the strongest financial forces on earth -- using the battle plan of a famous South African.

By Des Parker
Durban Daily News
February 1, 2001

The war savvy of legendary 19th-century Zulu king Shaka is inspiring American crusaders determined to end what they say is an international conspiracy holding down the price of gold regardless of the economic and social cost to mining countries such as South Africa.

Yesterday, as he planned to meet the famous warrior's direct descendant, King Goodwin Zwelithini, in Durban, a member of the Gold Anti-Trust Action Committee (GATA) described how Shaka's horn- shaped fighting strategy had been adapted to help return the metal to the $600 an ounce level he felt it should be.

"On the left flank we are gaining support from politicians in America and abroad, and growing interest from the media," GATA Chairman Bill Murphy told journalists, unionists, and business people in Durban.

"On the right we have increasing financial and moral support from gold producers. The frontal assault is our court action -- started in the United States in December -- charging the Bank for International Settlements, five global investment banks, and top U.S. treasury and Federal Reserve officials with price fixing, securities fraud, and breach of fiduciary duty."

The complex GATA theory holds that this "cartel" has colluded to hold down bullion prices since around 1994 by coordinating the market for gold derivatives.

Central banks had been influenced into lending from their gold reserves -- in effect selling it, says Murphy -- as well as auctioning big portions of them off.

The resulting market surplus of the metal depressed prices.

Apart from shoring up the banks' derivative positions, said Murphy, the actions aimed to keep the dollar strong and hold down American inflation. He claimed the actions had moved out of control and were a threat to the world financial system.

GATA charges that "a blind eye" has been turned to the tens of thousands of jobs lost and the economic damage to gold producers such as South Africa.

While current gold production was well below demand, prices had been forced down from close to $400 an ounce in the mid-1950s to barely more than $260 today.

Murphy supported his argument with these year-end prices:

1995: $388
1996: $369
1997: $289
1998: $289
1999: $289
2000: $273

Murphy is attending the Investing in African Mining Indaba 2001 in Cape Town next week.

Among business, political, and union leaders he has met or is to see, he said, were top people at Anglogold and Harmony, National Union of Mineworkers general secretary Willie Madisha, and executives of the South African Chamber of Commerce.


Thus, it is with this background that I am urging all Café members to be a part of our "left flank" and contact the press about what GATA has had to say for nearly a decade, and specifically about our WSJ ad.

Years ago one of GATA’s staunchest supporters, Peter Falconer, sent Chris Powell this email and I saved it…

I propose "Horns of the Buffalo 21."

Deadly tactics used by the Zulus with devastating results, administered by a determined people against a seemingly indestructible foe.

The British were defeated at Isandlwana by the Zulus because of British complacency, dishonesty in their motives, and underestimation of their foes speed and agility.Gata's Gold Rush 21 in 2005 was the warning and the awakening - now comes the encirclement with the demand for transparency - and finally defeat.

The reasons why the British were defeated in 1879 at Isandlwana are:

1). The British divided their force and were too spread out in formation, having to cover too much ground.

2). They ran out of ammunition because the quartermasters were trying to account for the inventory of every bullet as the Zulus approached too fast.

3). But most of all, it was due to the tremendous courage of the Zulus defending what was their right. That’s why I find Bill’s analogy of the situation so intriguing.

Whatever the names ends up as being - I salute you

Your friend from Chile

This ones for you Peter ... from one of my favorite movies, ZULU, filmed in South Africa in 1964 with Michael Caine in a lead role:

(yeah, I know, the Zulus got their butts kicked in this battle, but it is a great scene, and they won the war.)


An Indian's perception

Hi Bill,
Hope this mail finds you in great health.

Gold seems in a real explosive bull run at the moment with these key day reversals on the upside as pointed out every now and then by you in Midas. Having said that, I thought I must let you know the perception of an Indian (who has been and is going to be a die-hard gold bull for quite sometime).

The rise of Gold from the $1230 levels to the current $1310 level has meant little in INR (indian rupee) terms. Gold was trading around the Rs. 18900 levels then and is now at Rs. 19200 levels now. Your daily comments on the premiums are worth their weight in gold and give you a fair idea on the Indian market sentiment. But, how I perceive going forward is, with even a small correction in dollar terms; the Indian buyer is going to go on standby mode and wait for the correction to play out as the rise in the market has meant little to the Indian buyer due to the Rupee appreciation. We are witnessing moderate premiums in the market as the mood in India going into the festive season is bullish and also with higher world gold prices the Indian Jeweller is playing it safe buy accumulating at every dollar rise (altho' paying the same price in Rupee terms). As soon as the Indian jeweller community see a correction underway, these premiums would dry up as then they would wait it out for the correction to play out. The Indian Jeweller as of now does not want to be left out in this price rise and seems to have no risk as he is getting support from a weaker dollar.

I, of course could be totally wrong but thought I might give the Indian mindset.

Your comments on the same would be highly appreciated.

Thanks for your unending key comments on the bullion mkt in Midas. Its brilliant.....
Puneet Ahuja
New Delhi

Those Indian silver "nuts"

Hi Bill,
Just read last night's Midas. The fellow at the end, who was surprised about the Indian silver coated cashews and their disinfectant properties, was amusing, but the Indians are very bullish on silver medical applications, in particular the newer technology silver sols. We are currently negotiating with an Indian group who would like to distribute our products there, and a very large Indian pharmaceutical company has published several studies on the antimicrobial properties of our silver products. It seems that they were able to defeat 7 epidemic, antibiotic resistant bacteria by simply using our silver products as adjuvants to 19 of their ineffective antibiotics. That study can be read here:

For those who are not up to speed on what has been happening with modern medical silver technologies, there is a very informative video available, from the 2009 American Academy of Anti-Aging Medicine Conference. Warning: some of the clinical subject's pre-treatment photographs are not for those with queasy stomachs. These are serious resistant infections which have been present for over one year, some involve amputations which failed to halt the infection's progress. The video clip is about half way down the page:

Now that one company has acquired a patent for an actual engineered silver particle, intended for medical applications, the pharmaceuticals will have to come on board. One day safe, broad spectrum, non-toxic silver sols will replace all of their toxic antibiotics with their dangerous side effects. Silver sols (not colloidal silver) defeat bacteria, virus, fungus and molds via a catalytic action, as opposed to the old chemical interactions of conventional antibiotics. The bugs cannot develop resistance. Silver has a very bright future in medicine.

What Price Gold in a Gold Standard?

David C. Harper, Numismatic News
September 28, 2010

Asking whether the U.S. dollar should be backed by gold prompted many reader responses to our poll. Dealer Steve Album very thoughtfully did some calculations. He concluded there isn’t enough gold.

"According to the Federal Reserve M1, current number of dollars is about 1.75 trillion. After doing the calculation, I found that at the current gold price of about $1,280 per ounce, we would need about 48,000 to 50,000 tons of gold to back up all the dollars. That is about one-third of the amount of gold that has been mined since ancient times, about 150,000 tons according to an article that appeared in The Economist a few months ago…

What Price Gold in a Gold Standard?


Dave from Denver...

Here's The Problem - And Why Gold Will Go MUCH Higher...

"Whenever destroyers appear among men, they start by destroying money, for money is men's protection and the base of a moral existence. Destroyers seize gold and leave to its owners a counterfeit pile of paper. This kills all objective standards and delivers men into the arbitrary power of an arbitrary setter of values." - Atlas Shrugged

August 15, 1971. That date should be etched in everyone's mind and it should be tattooed on the forehead of ass-absolutes like "Mish," Prechter, Denninger and every other imbecilic deflationista out there. Here's the chart, which I took from the free access to Nick Laird's and added the two date-markers:

This is the key to the understanding the root cause of the collapse of the United States - economically, politically, morally, spiritually.

The Bretton Woods agreement in 1944 established the U.S. dollar as the world reserve currency. The proviso was that all U.S. debt obligations were to be backed 1:1 with the gold owned by the United States. While this was only a partial currency anchor, you can see that from 1944 - 1971, the amount of Treasury debt outstanding barely increased.

Then, on August 15, 1971, all hell breaks loose. The terms of BW allowed foreign sovereign holders of U.S. debt to exchange that paper for gold at the Fed "window." The U.S., in order to pay for the largesse of 8 years of Democratic socialist programs and Viet Nam, had issued a lot more paper to foreigners than was backed by gold in Ft. Knox. Charles deGaulle had figured this out and decided to turn in all of the U.S. debt held by France in exchange for gold. Nixon had no choice but to close the gold window or risk an unmanageable political and economic crisis: it prevented a run on gold that U.S. did not have. Wars are started over issues like this.

For whatever reason for which I have yet to find a plausible explanation, the rest of the world accepted this U.S. Government default under Bretton Woods and continued to accept the U.S. dollar as the global reserve currency. The only thing I can think of is that at the time the U.S. was by far the strongest economy, had military presence in close to 200 countries and by far had the most nukes to fling.

Now, if I were to dig up a long-term chart of M3 thru March 2006 and extended it with M2 + assumptions thru today, you would see a similar chart pattern to the one in the Treasury debt chart above. Serious price inflation is percolating in the system and will soon be felt by everyone.

And now our system is mired in an irreversible debt/death spiral. At some point our Asian/Anglo financiers will say "NO MAS" and then we'll really see the meaning of Bernanke's infamous "helicopter" speech. The Fed will have no choice but to hyperinflate the money supply in order to fund the Government and keep our system from collapsing. I'm not sure where Bernanke is coming from, because for a supposedly educated PhD economics expert, he sure is ignorant. I guess the joke's on us...

Richard Nixon and every subsequent President, Arthur Burns, G. William Miller, Paul Volker, Alan Greenspan and now Helicopter Ben Bernanke are ALL destroyers of money. Do you know where your gold is?


Saudi Gold Reserves Rose on Accounting, Jasser Says

From Bloomberg News
via Arabian Business, Dubai
Wednesday, September 29, 2010

Gold reserves in Saudi Arabia, the Arab world's biggest economy, increased because of "a difference in accounting," not new gold purchases, central bank governor Muhammad al Jasser said in Kuwait today.

Speaking to reporters, he said: "We always had that gold. We did not buy any new gold. It was just a difference in accounting. There was some gold in other accounts."

The gold reserve estimate as part of the foreign reserves of the world's largest oil supplier more than doubled in June, according to data on the website of the World Gold Council.

The Saudi Arabian Monetary Agency's gold holdings increased to 322.9 tons, up from the 143 tons reported in March, according to the WGC, which tracks global gold bullion holdings…

Saudi Arabia is among the 20 largest holders of gold reserves in the world, according to the WGC…

Central Fund Of Canada

Hi Bill:
Yesterday the Central Fund of Canada closed with a premium of 9.4% but this figure is misleading if one doesn't know how it is calculated. CEF has approx 1.5 million oz of
Gold and a little more than 75 million oz of silver. Each evening they report their closing prices on both the NYSE and the TSE in Toronto.

Yesterday the fund closed in NY at $16.62. The premium is calculated by multiplying the number of ounces of Gold and Silver by the afternoon London Fix. In this case the prices
used were $1294 and $21.165. This yielded a premium of 9.4%.

Notice however that by the time NY closed the spot prices for the metals had risen dramatically with Gold around $1308 and Silver at $21.70. Buyers of the Fund in afternoon NY trading were obviously influenced by the rising bullion prices. So if we recalculate the premium using the late New York prices instead of the London PM fix we see it drop from 9.4% to 7.4%. If the intraday volatility of the metals increases we will see even larger discrepancies in the reported and real premiums of the fund.

Cheers from Auckland, Ed Wener

Richard Russell last night:Gold -- Gold is technically overbought, but from all quarters I hear the following opinion: "Too much talk and attention is being directed towards gold. When this much attention is directed to any market item, you're looking at a top." So that's the prevailing and "popular wisdom." It seems to me that too many in the business and in the media are singing that same tune -- "Gold is ready to correct, it's overbought."

The Russell take: When everybody sees the same thing, I discount it. All the gold publicity is simply directing the public's attention to what's happening to gold. We are not near a top. All the top-callers are going to "eat their warnings." In other words, I'm taking a contrary stance towards current "popular warnings" about gold. When everybody warns about an item, you can forget the warnings. The situation will work in reverse on those warning about a top in gold. Gold is going to frustrate them…


Five hidden costs of gold

We are nowhere near a top yet. Here is a clueless commentary dissing gold as an investment because you have to pay 28% tax on the gains. Hey, there is a solution…buy Fannie Mae and Freddie Mac stocks and I guarantee you will never have to pay a penny in capital gains!

Five hidden costs of gold

GATA clashes with Fed in federal court -- will you join the struggle?

Submitted by cpowell on 06:43PM ET Tuesday, September 28, 2010. Section: Daily Dispatches

9:46p ET Tuesday, September 28, 2010
Dear Friend of GATA and Gold:

GATA's freedom-of-information lawsuit against the Federal Reserve in U.S. District Court for the District of Columbia, an action seeking access to the Fed's records involving gold and particularly gold swaps, is nearing a critical point.

The Fed has asked the court for what's called summary judgment -- dismissal of the lawsuit on the grounds that no relevant evidence is in dispute and that even if all factual assertions by the plaintiff are true there is no remedy at law.

GATA maintains that many factual assertions are in dispute, that the Fed has not searched conscientiously for all documents covered by GATA's request for information, and that the Fed itself has provided a glaring proof of its failure to search conscientiously.

That glaring proof is the Fed's failure to identify to the court the gold swap arrangements with foreign banks that were acknowledged by Fed Governor Kevin M. Warsh in his September 17, 2009, letter to GATA's lawyer, William J. Olson of Vienna, Virginia, denying GATA's first appeal of the Fed's refusal to provide access to documents.

Warsh's admission that the Fed has gold swap arrangements with foreign banks and insists on keeping them secret can be found in the first paragraph of the third page of that letter, which is posted here: Fed's motion for summary judgment can be found here:'s reply in opposition to the Fed's motion can be found here: declaration by Olson in support of GATA's reply can be found here: declaration by your secretary/treasurer in support of GATA's reply is here: declaration by GATA board member Adrian Douglas, publisher of the Market Force Analysis letter, in support of GATA's reply is here: a declaration by GATA consultant James Turk, founder of GoldMoney and publisher of the Free Gold & Money Report, is here: the Fed's motion for summary judgment is denied, serious evidence gathering is likely to begin in court -- that is, serious scrutiny for the most powerful, imperious, and secretive agency of the U.S. government, the agency that surreptitiously manipulates most major markets around the world. That agency and those manipulations cannot bear scrutiny.

From GATA's filings you may see how vital our lawsuit is to the establishment of free markets and fair dealing among both individuals and nations and how much effort and expense we have put into it. The lawsuit already has extracted from the Fed that most damaging admission about its participation in gold swaps. If the lawsuit proceeds it will extract more damaging admissions.

But to continue our work we need financial assistance from precious metals investors, mining companies, and believers in free markets and limited, democratic government generally.

If, after reviewing the filings, you're inclined to support us, please visit: World Gold Council is reported to have an annual budget of $60 million but is forever silent in the face of central banking's long war against gold, free markets, limited government, and liberty. With even a few million dollars GATA might successfully prosecute its lawsuit against the Fed and bring a few more actions against the gold and silver price suppression schemes and other market manipulations at their most vulnerable points. The World Gold Council exists to make sure that there never is a world gold council. With your help we'll see that there is one.

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc

Bill H:

Wait until they figure out that Gold IS liquidity!

To all; we have crossed the $1,300 barrier without much of a fight (I am sure behind the scenes some big haymakers were thrown) and investors, unless they are blind have and are figuring out that Gold is and has been a good "ïnvestment" for 10 years. In fact, it has been just about THE best place to have had your money over this time frame. I can still remember the old days when people would roll their eyes, laugh and even offer insults when the "wild assed" figure of $600 was mentioned. I bring this up because over time, perceptions change. Right now we have light bulbs going on all over the world with the thought, "hey, I can make money on this Gold train". The days of "Gold is just too risky" have faded and fear has slowly turned to thoughts of opportunity and even greed.

Where am I going with this? As the title suggests, what will happen when investors REALLY figure out what Gold is? Gold IS money, it IS liberty and I believe we will shortly find out that it IS the ultimate in liquidity! When I say "liquidity" I am not talking about the stuff The Fed is shoving into the system, no, that stuff is only TEMPORARY! It is created as a "loan" and one day must be paid back, it may have a term of 30, 60, 90 days or whatever. Yes it functions to alleviate short term "tightness" of cash flows but it is not an "ässet" because it is also offset by a liability. The other fly in the ointment (one that Alan Greenspan knows very well) is that Dollars, Euros, Yen or whatever can at ANY time become "unacceptable" and thus "illiquid". GOLD on the other hand has been and always WILL be an acceptable form of payment for ANYTHING.....ANYWHERE!

It is for this very reason that Gold in reality is more than just "money", it IS "liquidity" in it's most raw and true form! In other words, if you have Gold in your possession, it will spend. If you own Gold, YOU are liquid when the entire system may not be. True, back in 2008 the price of Gold was pressured from "deleveraging" (and JP Morgan et al) but it still spent and was considered collateral worldwide EXCEPT for U.S. citizens within their own banking system. My point is this, the upcoming "status" of Gold will be one where it is viewed as the ultimate financial foundation, the ultimate liquid asset and thus the ultimate money.

I must chuckle somewhat at CNBC, they waffle back and forth on Gold and with each waffle they are proving Gold's "value". First they ask the question "is Gold in a bubble" and then morph into discussion of how poor Gold has done in inflation adjusted terms since the $887.50 peak in 1980. First off, it cannot be both a bubble and a crappy investment at the same time. In order to be in a bubble it must have been a very good ride. Another aspect that they fail to mention (because they were a huge negative mouthpiece) is that Gold has done very very well even WITH the government, the banks, nearly every broker and the media telling investors that Gold was scarier than a real witch on Halloween!

OK, what I am trying to say is that Gold has done well with every fiat trick in the book thrown at it, NOW comes the "gravy"! Now they can no longer "pooh pooh" Gold because it is finally speaking for itself and proving the verbal assaults false. THIS is the danger zone for "paper bugs". We are on a very important doorstep and once this door is opened it will NEVER again be closed in our lifetimes (I am assuming no High School kids are reading this even if they could). Once Gold becomes seen as LIQUIDITY again, fiat will be shunned for generations!

The massive amounts of fiat created for nearly 100 years will pretty much go "poof" and the amount of capital seeking "liquidity" will overwhelm the very finite supply of Gold. The mathematics are astounding when you consider an unlimited supply of paper chasing less than $100 Billion of new annual supply. The mathematics are even more astounding when you factor in the reality that "much" of the Gold that was "purchased" in the past was fraudulent! The scramble for LIQUIDITY will be done in panic mode, it is at this point that we can entertain talk of a bubble! Regards, Bill H.

The gold/silver shares were deadsville. The XAU lost .37 to 513.95 and the HUI went up a scant .39 to 513.95.

Yes, of course, gold and silver can do some correcting if The Gold Cartel has decided to go all out, but it is hard to envision any sort of serious setbacks with SO MANY looking for a correction, the markets so quiet, so few upside predictions from the mainstream, and the physical markets in such good shape.

We are FAR more likely to see upside fireworks than any lasting hits to either gold or silver.




Mr. Bean??

Dear Bill,
I notice that the Swiss Franc is now worth more than a dollar. A county whose greatest achievement was the invention of the cuckoo clock, and their currency is worth more than ours! And now the best irony of all is that the Bank of England official defending their low interest rate policy is named Mr. Bean. I couldn't make this stuff up.


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