Ihr sollt es alle wissen.....................................

verfasst von Emerald, 30.08.2003, 06:18

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August 28 - Gold $369.90 down $2.40 - Silver $5.11 down 4 cents

Gold Open Interest Explodes Revealing Titanic Battle

Life is not easy for any of us. But what of that? We must have perseverance and above all confidence in ourselves. We must believe that we are gifted for something and that this thing must be attained!
-- Marie Curie


The more gold surges, the more the cabal forces do what they can to immediately take it down. Once again, we see signs of an abnormal market as follow-through buying is thwarted at all costs. After yesterday’s dramatic upside bolt, gold was not allowed to advance further for the rest of the day, as it closed basically at the top end of the initial surge. After the surprise jump, The Gold Cartel regrouped and did the best they could to cap gold for the remainder of the session and then began taking it down in the Kangaroo trading period in Australia last evening. Over and over they utilize the same blatantly obvious price-capping tactic.

After a performance like yesterday, and much of the past week, a market would follow through on the upside in the early going. Might fail later, but it would run a bit. Not gold however. The Gold Cartel is desperate to keep it below the $370/$372 key technical levels. The reason: once gold concretely takes out this area, it is liable to cause substantial damage to many of their derivatives positions.

This morning, after a lower opening, gold quickly rallied to unchanged and then was slammed by GOLDMAN SACHS (Hannibal Lecter), taking it down $3.50, or half yesterday's stunning gain. Always the same folks pounding gold at critical levels for the cabal. Even so, gold came right back.

Mid-day, the Comex open interest numbers were announced for yesterday. Gold rose a staggering 18,739 contracts to 261,148. Gold should have gone up $15 on this amount of buying power. Cabal forces struck with a vengeance taking gold into new low ground for the day, down some $4+, in an attempt to flush out the tech specs. However, it was met by a massive wall of buying and gold roared back up until the close.

We know the specs are piling in. They are the buyers. Why doesn’t the dopey gold establishment ask who is selling all this gold to keep the price from taking out the $370/$372 area? It’s not the hedgers. We know that. In freely traded markets sellers want to get the highest price possible for their sales. In a rigged market, one designed to cap prices and protect massive derivatives positions, traders sell to keep prices from violating key technical zones.

CLEARLY, this is what occurred the past two days in the gold market. The corrupt ones in the cabal continue to violate the free market principles of the US financial system, and anti-trust laws, by collectively selling gold at the $370+ level to cap the price. They even managed to paint the tape on the close to bring gold back down below $370. It is aggravating none of the DINGBATS in the gold world ever address what is really going on in gold land.

To understand how right GATA has been about the manipulation of the gold price all these years you only need to listen to the know-nothings on CNBC talk about gold, who point to the rising price as a clear sign of inflation ahead. This sort of pointed commentary is exactly what The Gold Cartel and US administration wanted to avoid for a long time. It is one their raison d’etres for the price-rigging. For example, on CNBC’s Squawk Box they were lamenting what all the deflation talk was by the Fed only two months ago, citing the gold move higher.

Boy are they going to be confused when gold really takes off. Gold is going up because a surging physical market is making it possible for speculators to get long and take on the market riggers. We could easily have tremendous DEFLATION in many parts of the US economy and still have gold zoom to $800 to $1,000+ per ounce. Some very bad people are losing control of their price-rigging operation. That’s why gold is going up. Hello CNBC, wake up!!

More on the physical market and the specs. I am more and more convinced there is a big play on in gold. BIG MONEY is going after the price-capping crooks. To win, this crowd must make their move in the physical market AND the futures market. It was a Mark Rich specialty years ago. Mark Rich is the legendary commodities trader pardoned by President Clinton. Only by supporting the cash market can the big specs prevent The Gold Cartel from flushing out the vulnerable specs, thereby creating an avalanche of selling. Each time the cabal forces try to take gold down, the BIG MONEY buys physical, then go after the futures. Since the cash market is firm anyway, it forces other cash buyers to step up their bid prices. Before you know it, gold is moving up again as local traders begin covering their day trade shorts, etc.

This does not always insure a Large Spec victory, but it is how the game is played in general and is what I see currently occurring in the gold pits. While just a speculation, I believe these big players know what GATA knows, and continues to broadcast all over the place. The Gold Cartel is running out of physical gold to continue their scam. They are gradually hitting the wall and a savvy group is going after them.

That said, we need gold to just take off overseas one of these days, to bury the bad guys before they can think straight. I’m thinking of a $5 higher breakaway gap opening and straight up from there. Should that occur, we will likely get our Commercial Signal Failure as the commercials and cabal forces are carried out on GATA’s stretchers.

An ALERT:

Something doesn’t make sense about the gold open interest increase:

*The October contract traded only 2211 contracts yesterday.
*Comex reported a 7517 contract open interest increase to 22,658 in the October contract. That cannot be on that volume.
*Either the volume is wrong, or the size of the increase is wrong.
*IF the October contract did rise substantially (most of the spec trading is in the December contract), it would indicate someone is planning on squeezing the October contract. That is too good to be true!!!!

Regardless of the outcome, even a 12,000 open increase would be of serious note.

The silver open interest rose 3139 contracts to 106,481. I would not expect silver to stay down here much longer.
The John Brimelow Report

Thursday, August 28, 2003

Indian ex-duty premiums: AM $5.04, PM $3.23, with world gold at $369.75 and $369.90. Above, and slightly below legal import point. A very resilient performance, considering the suddenness of yesterday’s move, which of course occurred after Indian business hours. This is the first time Indian prices have fallen below import point since late February. As noted yesterday, back then world gold ran over $50 above the point at which Indian demand fell away. On this basis, world gold is not particularly extended.

According to Mitsubishi, TOCOM met offshore selling pressure this morning:

"Loco ldn gold was capped by dealers selling, mainly from Australia."

(Perhaps not coincidentally, the $A slumped today, accentuating the abrupt rise in world gold in local currency terms. There is also some suspicion that some Australian mines are facing escalating liabilities as their ‘toxic’ hedge books go rancid.) Most commentaries emphasize Japanese selling, but in fact open interest rose the equivalent of 1,177 Comex lots, suggesting long liquidation was limited. Volume exploded, up 212% to the equivalent of 67,608 Comex lots; the active contract was up 27 yen, but world gold slipped $2.60 from the NY close. Japan is not providing any leadership to precious metals at present. (NY yesterday was estimated to have traded 85,000 lots, over a quarter of that in the last half hour.)

Dealer-Commentators appear in the main surprised and confused. Traditional considerations, notably the $US and the Comex data, which possibly shows an all-time high spec long, tempt them to sell. Also MarketVane’s Bullish Consensus for gold jumped 5 points yesterday to 81%, the highest since February 5. (Although it should be remembered that this indicator was then concluding a 6-week stay over 80%, with a couple of forays into the 90s!) This skepticism is especially strong amongst those not close to the Middle Eastern/Indian physical arena - including some Far Eastern observers, where the physical business has been divergently slack all summer.

However, these inclined sellers are frightened by the power of the buying they have seen, and by the technical damage to the Bear case.

"The RSI at 64.0 suggests there is still plenty of upside room before gold enters into overbought territory" observes ScotiaMocatta, and Reuters quotes an American bullion trader:

"The funds have been monster buyers and you have got to wonder what they are hearing."

While there clearly has been major buying out of India in recent months (driven, in my opinion, by the economic boom there) and the Middle East (different kind of boom), it also appears that some large Western style money is in the field (hence the disproportionate CFTC large spec long). Greg Weldon

http://www.metal-monitor.com/default.asp

makes a reasonable attempt to explain this:

"for wealth storage held in something other than paper …
DEMAND could VERY EASILY … … OVERWHELM supply.
Unless Central Banks step in as the bullion seller of last resort."
"And, there is ONE ‘sector’, that finds itself with a sudden, INTENSE,
‘over-supply’ potential … against a LACK of willing buyers … and
thus, runs the risk of mandating that Central Banks become the buyer
of last resort."
"We speak of the US Treasury market."

(See this chart, which shows gold v. T-Bonds breaking out of a 15 year downtrend.)



This interpretation is, surprisingly, adopted by another noted bullion dealer, who shows a useful gold v inflation expectations chart (defined by TIPS data) supplemented by one comparing gold and Comex seat prices. His own technician has an interesting remark posted on the Mitsui site:

"A break through the upper resistance edge at 365 would target 422."

JB

CARTEL CAPITULATION WATCH

Hi Bill: It is truly amazing how the DOW always goes up in the last hour of trading. Could you explain how that happens?
Ray

Just the opposite of gold Ray. Who could it be?

The DOG keeps flying, up 18 to 1800. The DOW gained 40 in the last half hour to close at 9374.

Jobless claims rise as do continuing claims. The US job picture is not improving:

Aug. 28 (Bloomberg) -- The number of Americans filing unemployment claims totaled less than 400,000 for the fifth week in six as companies continue to slow the pace of firings.
First-time jobless claims edged up by 3,000 to 394,000 in the week ended Saturday from a revised 391,000, the Labor Department said in Washington. The four-week moving average, a less volatile measure, climbed to 396,250, from 395,750. Some economists consider 400,000 claims the dividing line between job market expansion and contraction…..
The number of people continuing to collect state jobless benefits jumped by 26,000 in the week ended Aug. 16 to 3.657 million. Continuing claims have averaged 3.573 million this year, 1 million more than the average from 1994 through 2002.

US Government spending propels the US economy. Where would it have been without the war with Iraq?

Aug. 28 (Bloomberg) -- The U.S. economy grew 3.1 percent at an annual rate in the second quarter, faster than the government estimated last month, as stronger consumer demand and a smaller trade deficit supplemented the biggest defense spending increase since 1951.

GATA’s Mike Bolser:

Hi Bill:
The Fed added $14 Billion in temporary repurchase agreements today. This action causes a significant change in direction of the repo pool 30-day moving average. The pool totals stands at $31.25 Billion with the 30-day ma running about $26 Billion.

This change in trend direction began with the frantic blackout addition of $20 Billion in repos by the Fed. We should be especially wary of sudden DOW"Rallys" at this point. Today the DOW is down a bit at 11AM.

My original thoughts were that an repo engineered fall in the DOW would be desirable to Treasury officials for the capital gain revenue it would generate. Perhaps the Treasury has simply decided to print their own tax receipts?

Complicating the predictive value of the repo metric is the reality that primary dealers can use these funds in many areas, not just to support the DOW. They may choose to run the currency markets, may even try to stem losses in the bond markets [although this is unlikely as that market is so huge]. Curiously, the 30-year is up a point today.

Thoughtful subscribers have noted that the thinly traded Summer vacation season may be masking Fed tactics and things will be better seen after LaborDay adds back normal equity trading volume.
Mike

More from Mike:

Hi Bill:
The DIVG held its ground above 340 and the speculative attack has kept up the pressure on the gold cartel. I have expressed [in the attachment] this DIVG action in terms of percent changes since Dec 5th. In addition I have included my Changes_Currencies_Gold chart for your review.







If one accepts that the DIVG is a direct, currency-adjusted measure of the value of gold, we can see that those who bought gold with their Euros on Dec 5th have done markedly better [+9.64%] than those who bought with their dollars at the same time. This is a huge gift to those on the"Continent" who already desire the historic safety of hard assets.

With this in mind, if the Fed and ECB were to desire some sort of global currency adjustment to account for a Chinese upward revaluation in their Yuan, then the bullion value imbalance caused by the Euro's differential gain would have to be reconciled. Perhaps this is behind the Euro's recent fall?

In any event, gold-bugs hold precious ground well inside the enemy's forward lines at DIVG=340. Tonight we prepare to continue the siege with our camp fires in plain view of the Fed's embattled walls...waiting patiently for the Master himself to appear on the ramparts...if he is able.

However, we must be ever vigilant that Tuesday Sept 4th may hold surprises.
Mike

It is my understanding from a bullion dealer source, the hedging increase by a few Aussie gold producers like Newcrest has been implemented at the behest of various bullion dealers. Word to me is various selling requirements are part of the agreements between these producers and the bullion dealers. In other words, as their hedge books go more underwater and more toxic, the bullion dealers require them to sell more gold as the price rises. What a beauty and potential derivatives nightmare that could be down the road!

Richard Russell last evening:

So the question is -- why with no definite connection to the dollar, would gold advance or decline? Well, here's my answer. Figured at a price of 360, there's about $1.4 trillion dollars worth of gold in the entire world. Against that $1.4 trillion dollar in gold, there are countless trillions of dollars in the world and more being created every hour around the clock. In fact, at the rate M-3 is currently being generated by the Fed, in a matter of 18 months the US could buy all the gold that has ever been mined since the beginning of time.

So we return to the question,"What is gold worth?" Here's my answer: We know gold has a five thousand year history of being real money, not money issued by fiat, but gold is real money because it has intrinsic value based on history. Gold has always been treasured by men for its beauty. Gold is imbedded in the language such as the"gold standard," winning"the gold," the"golden rule," a promise is"as good as gold."

And when men become worried about the value of paper money, they instinctively turn to real intrinsic money -- gold.

So why is gold is a primary bull market today? Gold is in a primary bull market because the US has painted itself into an impossible corner. That corner is a future of nothing but debts and deficits. And how will these debts and deficits be handled. They'll be handled by the creation of more dollars and by inflation.

Slowly, very slowly, but surely, this scenario is dawning on the minds and psyches of seasoned and intelligent investors. What, only on seasoned and intelligent investors? What about the public, the crowd? Where are they?

The public is not even aware the gold is rising in terms of dollars. Right now we have a thin, investor's market in gold. Here's a question -- who of your friends have bought any gold or gold shares? Do you know anyone who has bought any gold? The answer is most cases is"No, none of my friends own any gold. As a matter of fact, when I mention gold they look at me as though I was nuts. What, you own gold? Hey, I don't even know how or where to buy gold. Gold, hmmm, what a thought."

And that's how I know that we're still in the first phase of the gold bull market. This is the phase where informed investors take positions in an item because they believe that item is undervalued but near or actually in a bull market. That's where I think gold is now -- in the accumulation phase. Gold is now being accumulated by seasoned, informed investors who believe that precious metals now represent great values.

-END-

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• Ihr sollt es alle wissen..................................... - Emerald, 30.08.2003, 06:18