from Jim Sinclair & Harry Schultz.

Last Friday is like a serious wound in a knife fight. We (bullish interest) will still win the price battle but

the sneak attack selling wound is costly. Like a punch in the gut, it knocks the wind out of gold price structure. I would say now that rallies back are sells for 4 to 8 weeks before buys. The Cartel is encouraged. The maximum low could be 302-305 and only there would be the real buys on a risk/reward consideration. Prudence would tell the professional trader to sell before buying in order to have the power that surprise cannot unseat both in bullion & shares. Both bullion & most shares had formed undeniable toppy formations and that is what gave initiative to the gold dealer's cartel to pull off their new (in terms of size) surprise sneak attack strategy. The cartel's tactic now has changed to making significant gold lease arrangement then pouring that supply on the Comex listed derivatives via sneak attack tactics with the intention to publicly demoralize the bull trend.

On the other side #4, the CRB Index moving into more bullish territory, out of 5 fundamental keys is forming to sustain the increasing price of gold. Look at Wheat, Soybeans, Sugar and Coffee to name two items. Commodity price bottoms are now formed and breaking out into what may well be mark up periods.

Investors need to realize that we virtually have back the 1970s IMF and the 1968 Gold Pool sales via the new gold lease mechanism used by the gold dealer's cartel for their own profit interest, sustained by central banks leasing their gold supply.

At the same time investors should be informed that 33% of all Central Bank gold is already sold in the market place via derivatives. The Central Banks will not be prone to sell 40% due to increasing counterparty credit risks. Quite soon the gold lease mechanism will dry up. Investors should watch gold lease rates as a tip off that the central banks are lent up to their willingness to trust gold banks credit standing. The next tick up in lease rates will not be because many are wishing to do gold leases therefore bidding up the gold lease rates but rather because central banks are losing their interest in supplying the desires of the gold dealer's cartel to make endless gold leases just to pound the price of gold, thereby protecting the gold dealers derivative short position.



This time, higher gold lease rates will signal the end of that game of using gold leases to damage the

price of gold in sneak attack mode late in the day, late in the week. This is a tactic of a loser, not a winner that has to use stealth to effect price. If the price of gold was to be attacked by the gold dealer's cartel in the sunlight of the full view of all traders it would have no effect in terms of the trend. The gold dealer's cartel must now hide in the shadows of dark in terms of Asian time and attack when the big players are asleep with their agents having discretion but not infinite discretionary orders. That type of selling is the tactic of a loser near the end of his rope, a coward and not of a strong combatant. The bulls are winning but for a few weeks, care is advisable. This is the Art of Warfare in the face of the machinations of the cowards.



We have outlined to you how"risk Control Programs" are used by all commercial banks to limit their risks of derivatives. When the derivative position in the gold bank is as it is now, short gold spreads, then the programs calls for gold to be purchased as the price of bullion rises to offset the risk of the short. In a similar fashion when the sneak attack in the last few minutes of last Friday broke gold down from its uptrending nature, the risk control programs automatically reversed themselves once again and began to liquidate gold, thereby maintaining the degree of risk now by increasing the exposure to the short side. However as gold approaches $305, the programs will have exposed all the short gold derivative positions once again to their original fully short exposed posture making the level of $301- $305 open season for the same interests that gave us $330. This is why we feel that the ultimate low of this reaction lies within that range and therefore today, July 4th, at $310 London quite near a bottom.,


The Lesson to be learned from last Friday's SNEAK Attack.

Now, in the terms of Art of Warfare & martial arts, turn the tactics of the sellers against them by buying only at key points and selling into strength until we have them powerless in the 5 fundamental factors supporting the gold price, then bury the dastardly dealers one atop the other.




James E. Sinclair, CEO/Chairman Tan Range (TNX)
www.tanrange.com
Harry D. Schultz, Int'l Harry Schultz Letter & GoldChartsRUs
www.HSLetter.com






S`Grüessli Drooy

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