November 21, 2017 
 Tuesday 
 
 

Forum
Topic:
Gold Enters Major Bull Market

       

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 By bluejay

01/05/2009  5:49PM

last on gold is $853.50.

A personal friend of an Agoracom.com user in Canada reports the following:

"We accumulated 3 emini contracts on Comex for December delivery and we had been given serial numbers and weights last week for the three bars. Today we were informed that Comex, which is now a division of NYSE Liffe, is invoking a rule in which they can deny delivery of individual mini bars(roughly 33 ounces) and issue you only a Warehouse Delivery Receipt(WDR) against your mini-contract unless you have 3 WDR's, and then they'll issue you a 100 oz. bar. Otherwise, if you have only 1 or 2 mini-contracts, you only own a WDR, which you sell by shorting a mini against it. If you own a WDR for a 100 oz., the WDR insurance encourages you to safeguard the gold at the Comex."

Following are some more excerpts from the main communication:

"Our back-office guy at RJ O'Brien told us that he's been doing Comex deliveries for 30 years and he's never seen anything like this, and he's never heard of this NYSE Liffe rule on the mini-contract."

"Out of nowhere, some obscure rule is invoked and is used to override the terms and conditions of the mini-contract that we purchased over a month ago and fully funded for delivery."

"We have witnessed delivery notices issued for close to 50% of the gold supposedly held in the registered category on the Comex during the month of December, and yet the reported Comex inventory of gold as of 1/2/09 shows almost no physical gold leaving the registered category at the Comex."

It is only too clear that the mini-contract on the Comex has absolutely no gold behind it while the 100 oz. contract will have to cease trading if the outflow of gold from the Comex continues at its current demand rate.

TV viewers during the past 6 months or so have been innundated with commercials wanting your old gold jewelry. 85% of annual gold production goes into jewelry.

Is the government hiding the fact there is a major shortage of physical gold, thus hiding it from the public??? Would they be doing this to protect their bullion banks who are short? If any bank is over-extended on the short side it is JP Morgan. It is understood that there are some other big US banks short on gold as well.

It seems the Treasury under the leadership of one of the biggest past gold bears, Hank Paulson, is doing everything in his power to protect all of his banking buddies or other major gold shorts from facing the realities of a fully justified higher priced gold market.

Just look what he did for Bear Stearns when it financially imploded. Bear Stearns at the time was underwater with their extremely large short interest in silver which had no metal at all backing that exposure or funds available in case of future trading losses.

Paulson gave the positions to JP Morgan and guaranteed them against loss with US taxpayer money. JP Morgan probably had a little meeting with some of their banking buddies and put together an organized raid in the silver market and attacked gold at the same time just to make sure silver tanked.

How would you like someone to give you a silver short position guaranteed against loss and then be permitted to make naked short sales in silver or not even having to put up any money for any sales that you effected in overwhelming the marketplace? Well, that's what happened and the US taxpayer who held silver at the time in their investment accounts got nothing from it but the shaft.

Today, Hank's past buddies from Goldman Sachs, in either connected or not connected positions, were given the $12 to $13 billion dollar IndyBank today for $1.3 billion by the FDIC. Conflict of interest here?? You tell me.
 By bluejay

01/05/2009  3:44PM

Last on gold is $854.70.

Flash traffic out of Denver indicates that Comex has defaulted on delivering the 33 ounce gold bars tied to the mini-contract.

/More to follow/
 By bluejay

01/05/2009  10:56AM

Gold $848.70 down $26.20
Silver $10.96 down $ 0.57
Gold/XAU Ratio 7.14
Gold/Silver Ratio 77.44
US Dollar 82.68 up 1.34
Crude Oil 46.97 up $ 0.63

Gold prices are being dragged lower today with a firmer dollar. The dollar continues to bounce higher at about 83 following the severe beating that it took in December when it collapsed from 89 to almost 78 in just two weeks. The recent 17 day move on the dollar is viewed as a "dead cat bounce" and is expected to fizzle out in due time.

The December dollar drop amounted to a 12% loss for the greenback. It's snap-back reaction so far has amounted to about 6%. In a bear markets, as the dollar remain in, the 50% reaction following a crushing decline is normal and sometimes can be even greater before the lower major trend re-establishes itself.

Concerning gold, about three weeks ago the metal lifted above the $840 level from an intermediate declining phase restraint that been in force since it traded back under the $1000 level in mid-March of last year. The $840 area is now generally considered, a fortress of powerful support. Resistance areas once considerably broken later evolve into very support levels. "Generally" means that it can even trade lower but that would only be a temporary price condition.

A good example of a temporary condition would be the time gold rapidly approched the 1000 level and continued past it. Unfortunately, for me and many other people we became so excited at the event that we temporarily lost our perspective.

This can be equated to being at a party with four drinks under our belt and feeling that we are invincible. Stepping into a car with this condition, the following events could be disastrous. Considering that gold is in a very strong bull market, the long term buyer could have made a temporary purchasing mistake but the short term trader could have been really hurt if both had followed it past 1000.

History has taught the trained eye that the levels of 1, 10, 100, 1000 and 10,000 are psychologically formidable areas to better on first contact. The same applies to declining markets when prices approach these levels from above. A recent exception to this rule is the Dow Jones Industrial Averages breaking and staying below the 10,000 area on its first contact.

A valid case can be made for the 5 number and 50, 500 and 5000 but the previous set of numbers beginning with 1 are most significant.

Sinclair says, concerning the 1000 level on gold, that the third contact will be the charm needed to finally put it behind us. I personally don't have Sinclair's experience but based upon his uncanny success I will accept for now his judgment.

So, this morning with gold prices approaching the $840 area it is in my humble opinion that an OPPORTUNITY currently exists for you in acquiring the metal in the form of your choice.
 By bluejay

01/02/2009  8:51PM

Gold closed out the week at $874.90.

Check out the N.Y. Times story on the town of Battle Mountain, Nevada enjoying boom times as a result of the higher gold price.

The article concludes with the same never ending general inference or theme from US papers that gold will be going lower.

http://www.nytimes.com/2009/01/02/us/02nevada.html?no_interstitial
 By bluejay

01/02/2009  3:25PM

Last on gold is $874.90

Check out the following link:

http://www.321gold.com/editorials/willie/willie010209.html

When you're finished you may need a glass of wine.
 By bluejay

01/02/2009  9:04AM

Last on gold is $875.70, as silver continues to build relative strength against it while trading higher at $11.46.

Commodity Online January 1, 2009

As we analyze the possible reasons behind future directional move in gold prices in 2009, we get more bullish factors than bearish factors from both supply side and demand side.

Supply side factors:

Gold mine supply has peaked in year 2001(2600 tons). Gold mining supply worldwide has failed to grow during the seven-year bull market in gold and has fallen to 10-year low. As 2009 begins, gold mining projects are now struggling to raise new funds due to the financial crisis, coupled with shortage of skilled labor.

Apart from the credit problem, other reasons for reduction in mining output include accidents in the mining process like rock
falls and poisonous gas, power shortages and environmental concerns due to release of heavy toxic wastages.

Despite the strong gold-price, incentives to produce mined gold supply are heavily constrained and any demand growth in the form of investment or jewelry would only see higher prices.

Central Bank Sales

Over centuries, central banks have hoarded gold. World official gold holding (September 2008) is around 29,783.9 tones. The Central Bank Gold Agreement (CBGA) was renewed in 2004, raising the annual gold sales limit to 500 tones, which will expire in September 2009.

The ongoing financial crisis has strengthened gold's use as the ultimate international currency – the only form of money with intrinsic value and could lead to a considerable slowdown in gold sales by Central banks.

Demand side factors:

One needs to look back the price move of gold to understand how safe heaven sentiment has contributed supporting gold prices in 2008.

The unsustainability of the system of "Live now, pay later" leading to a credit problem was the main feature of the year 2008 that had to collapse. It also saw governments dealing systemic failures in the banking system, spreading out to all financial markets and eroding confidence and trust in the banking system.

The global economy as a result has given a deep recession. Moreover, with higher gold lease rates, gold is even trading in parity with money-market rates and increasing its appeal relative to holding cash. This all suggests that flight-to-safety will still be the main driver of gold prices.

In relative terms gold has witnessed a lesser percentage decline against other asset classes indicating outperformance. While comparing the fall of Commodity prices due to the credit crisis, we see that only gold held on so well, mainly due to the risk premium.
 By bluejay

01/01/2009  11:05PM

Gold is off its high again at $890 and is now trading lower to $873.00.

Soon after FDR was elected the gold was called in. The majority of FDR's campaigning expenses were paid for by the banking industry. A few years later the official price was jacked higher by about 70%. Who did this benefit, not the people who turned it in? I think there is a lesson to be learned here.

Does history repeat itself? I don't believe the Roman State was the original early owner or owners of the Empire's eventual complete dominion of all the gold placers. Bottom line, they probably confiscated the placers from the people when their currency went sour.

Concerning gold confiscation, governments have done this routinely over history when their fiat currencies entered an explosive inflationary spiral as people's mounting losses in purchasing power influenced them to seek out gold as a store of value thus abandoning whenever possible the circulating or growing near worthless fiat bills or vouchers or coupons as some referred to them as.

Some eye opening figures:

Since the US moved to fiat paper money(inconvertible paper money made legal tender by government decree) in 1971 the dollar has lost, at least, 80% of it's purchasing power.

Since the Federal Reserve was established in 1913 the dollar has lost in the excess of 98% of its purchasing value.

Who's creating the money that causes us to lose our purchasing power or more significantly, our savings or wealth values? It's the banker's big brother, the Fed, and the banks themselves.

The banks have the system so rigged that when they nearly go bankrupt from their excessive gambling follies they rob us us through their well placed hired government employees forcing us to reinburse those losses. It is a perfect fool-proof system for success and riches if you happen to be a big banker.

The big banks are so influencial that they even got us to bail out the brokerage companies which they bought for peanuts with the money we gave them plus some smaller struggling banks to increase their market share. Use the TARP money to bail us out? Don't be absurd squeaks the big-fat-bank-rat.
 By Hans Kummerow

01/01/2009  6:48PM

Mike, it is very true that FDR's confiscation ocurred in economically weak times. But, many commentators compare the Global Financial Crisis of 2008 to the Great Depression of 1934. Some even believe, the 2009 depression will be more severe, than the depression of 1934. So we are currently living in very weak times, aren't we?

And in case the Bretton Wood II talks should fail or be postponed beyond the first half of 2009, I fear for very severe economic consequences in the second half of 2009.

The Wall Street Journal has printed an article on the former Russian KGB-Analyst Igor Panarin on Dec. 29th, 2008.
http://online.wsj.com/article/SB123051100709638419.htm

Just two years ago such an article could never have appeared in the WSJ. It would have been dismissed as completely irrelevant, russian, antiamerican propaganda.

The formerly unthinkable has made a subtle transition into an unlikely, but not altogether impossible event.

If the Administration should plan to become serious about nationalizing precious metals, you will first get a wake-up call on your Income Tax Return Forms. As soon as there should appear a questionnaire asking for details on precious metals in your possession. (For record only).

The unbelievable pace in the accumulation of trillions of US-debt is scary. This development simply cannot go on much longer. The markets did not tolerate an oil-price of US $ 150 per barrel for a very long time during 2008. And the markets will not tolerate the amount of debt that the US is incurring right now much longer. An adjustment of some sort seems inevitable to me at some point in time during 2009.
 By Michael Miller

01/01/2009  1:06PM

In regards to one of Han’s scenarios below, a government call on Americans to turn in privately held gold, here are my quick impressions.

Unlike FDR’s confiscation, which occurred in weak times, gold ownership in the US, a global economy with many options for gold ownership, unthinkable means of communication today compare with 1934, and perhaps most of all the small supply of gold held by US residents or citizens, such a policy will yield very little physical gold for the government. Also an observation I recognized over my past thirty-four years in the gold mining/investment industry, events do not repeat. It will always be a new game with a fresh twist. An ongoing power plan exists between the gold holders and the want-to be (paper holders). As a gold producer this battle is not my concern and is probably an okay reality for us. Sixteen to One operated during the last major bear market for gold, acquired more hard assets and improved its position for the next bull market. When will that flare up, it beyond my expertise to predict.

One fun history of gold during its last escape for the US population between 1968 and 1975, is the amount of and type of gold smuggling that took place. Great stories! The smugglers were much smarter and more motivated than the agents for the Government. I am sure that this new US administration knows this history and will never underestimate the ingenuity of its citizens. If the United State, the fifty individual states and the thousands of county and city governments cannot stop the most terrible habit of nasty drug use, especially meth, gold smugglers will be safe and prosper.

When FDR confiscated gold, his administration also raised the official price from $20.67 to $35 per ounce. This stimulated gold miners and investors to kick up their operations. Between 1934 and WWII, gold people licked their chops with delight. In 1934 bullion receipts of the Sixteen to One mine totaled $578,000 for the year. Dividends that year were $287,000 (almost 50% of bullion receipts).

Following Hans’ theme that the government confiscates gold, it would be prudent for the government to do something to stimulate gold production first. There are several ways to accomplish this. If the US wants to recharge its vaults with the precious metal, it will be because our financial gurus want to sit at the international poker table with a chest full of gold instead of guns and notes. Otherwise, why bother?

It seems to me that those who do not have gold want to diminish its importance in the marketplace and suppress its exchange rate with all currency. Gold gets in the way of those who battle for the value of the Euro vs. the Yen. vs the Dollar or in the good old days of international trade the German Mark and Swiss Franc. (I saw only one article in the Wall Street Journal about the conceptual beginnings of the replacement of Europe’s currencies with a single Euro and gold. The article discussed the debate about the percent of gold backing with a leaning towards thirty percent. Did this come to pass?)

Today no one mentions Fort Knox. Back in the 1970’s it was a hot topic with gold bugs (a peculiar name). I drove by Fort Knox and was surprised to see that weeds grew around the fence and gate. I never gave the question of, “Where has all the gold gone?” a hard study but others offered evidence that Fort Knox was stripped clean of America’s gold. When was the last time you read about Fort Knox as America’s storehouse for its gold? Remember the United States does not print dollars. We trade with Federal Reserve Notes. When FED is used in writing does the writer mean the federal government or the Federal Reserve Board? There are significant differences.

I treasure a vast and diverse library of both mining books and economic books that emphasize gold. I accumulated them over the years and still love to pick one up for a quick review. Maybe we can discuss this topic some more.
 By Hans Kummerow

01/01/2009  10:18AM

Let us assume for a moment, that the forecasters, who foresee the US-Dollar price per ounce of gold going to $ 10.000 and who see a new currency replace the US-Dollar in 2012, may be right.

What would that mean for private ownership of gold and gold-mines in the US?

In my opinion, no Administration and no President will let the US-Dollar go down the drain without requiring all privately owned gold to be turned in to government treasury - in exchange for some piece of paper - and without nationalizing all gold-producing properties on US-soil in a desperate attempt to save the currency.

Unfortunately, such measures of last resort may already be a subject of government policy making. And behind all that paper-shorting of gold may be a Plan B that the public does not know about.

I see no way in which all the Federal Debt, that the Fed plans to sell in 2009, may be sold at current interest levels of the US-Dollar. Or does the Fed plan to sell US-Debt in other denominations than the US-Dollar for a change?

Of course, the Fed could always hit the start buttons of the printing presses to avoid selling debt that nobody wants anymore. But that is no long-term solution - as we all know. I sincerely hope, there is a Plan B for that problem.

There is a strange hum in the air over here in Europe these days. European policy-makers understand very well that the incoming president on January 20th, 2009 will need some positive results fast. The faster the better.

European leaders want Barrack Obama to succeed. They will be making a substantial effort to assist him in putting the US-economy back on it's feet.

And I personally believe, that some European Leaders, like the German Chancelloress, have "been keeping their powder dry" to support a massive and coordinated effort to stimulate economic growth as soon as Barrack Obama has taken office and the "Bretton Woods II" talks move ahead.

On an overall basis, I see a solid base for likely improvements in 2009. If the Bretton Woods II talks go well, the global financial crisis may soon loose it's awe. And if the US are represented by a President again, who shows some respect for other nations and other cultures, the number of people, who want the US to succeed economically, may grow substantially.

I expect the US-Dollar price of an ounce of gold to fluctuate around the 1.000 US-$ threshold for the next few month. And I wish you all well for 2009.
 By Michael Miller

12/29/2008  10:02AM

Today I will sell 5.67 ounces of gold dust. Here is the reason I am selling today into a rising price: the mine needed to get its smaller loader repaired for the winter season. The large Cat 966 is rougher to operate and not the best for snow removal; therefore, it was transported to a repair yard early December, and now it will be transported back to Alleghany this week. So, for the economic thinkers is our Forum, it is because of demand,not supply,and not demand for gold but the demand for dollars to pay for the repairs.

The option of using a line of credit was no option at all due to the attitude of lenders. I am positive that other real gold producers, the ones who mine and process real gold face similiar decisions. We pay our bills with cash, not gold, except in rare cases. Over the past fifteen years I have been able to manage our gold inventory to gain the maximum returns. This is one of several reasons this company has survived the hard times for the small gold miner. While our owners have not seen rapid increases in the market value for their equity in the Sixteen to One mine, they have not experienced the devestating dilution prevelent in the small cap gold corporations (some of the big ones as well).

I am not a believer in the $2,000 plus spot price for gold, yet it may happen; however, I do believe that the last high over $1,000 will be tested and broken in the months to come. We are very happy with the price today. The bucks we get per ounce of Sixteen to One gold are not the problem. Working capital to go and get the stuff is the problem and one that I will overcome to the benefit of existing shareholders and those who provide the new money.

Where are those who believe the multiple thousand dollar per ouince predictions? If you are one, call me and realize your visions for the future.
 By bluejay

12/28/2008  8:28PM

Gold $883.40 up $14.70
Silver $10.84 up $ 0.23
US Dollar 80.30 down 0.31
Crude Oil 39.15 up $ 1.44
Gold/XAU Ratio 7.45
Gold/Silver Ratio 81.10

Due to the continuing conflict in the Gaza Strip gold is being pushed higher. Earlier in the Asian trading session it reached to nearly $892. The last currently, as it is being whipped around is $882.20.

Jim Sinclair stated tonight at jsmineset.com that Alf Field's projections made in early December will be met. That's strong talk as Alf has predicted uplifting waves to reach $3500 then to $6000 followed by a move to $10,000. In that price scenario environment our shares will become a blue chip holding envied by all.

Jim Sinclair, also says tonight, that a new currency will replace our present dollar in 2012. It sounds like it's the right time for us all to be in hard assets or to be making plans for it.

The dollar chart was checked out tonight and it clearly shows an objective on the graph into the lower general area of 65. Again, the last sale on the greenback is 80.30. The posture for wealth retention should be to exit all dollar denominated assets with the exception of hard assets.

Silver continues to be the red-haired stepchild being ignored as a monetary metal. They would like us to believe that silver is an industrial metal just like other base metals but the truth is the people don't agree. It's not that the people arent't putting some of their wealth into the metal, it's that the short sellers continue to beat silver back with paper sales on the Comex.

Already, one or two US banks have sold 25% of the annual world production short. This enormous percentage is destined to grow as base metal mining operations are curtailed thus reducing by-product production of silver due mainly to the collapse in copper prices. Copper has fallen from above $4 some weeks ago to just $1.30 recently.

Some months ago when the Bear Stearns fiasco hit the news wires silver was pushing higher and stayed above $20 for awhile. Then a few US banks took control of the market plastering it with paper while taking it down below $9 or so temporarily only to have it inch back slowly. Silver in the past few days has managed to trade higher over a minor technical area at $10.40 and looks slowly higher. Once the $14 area is cleared the bankers could be in trouble as the silver market will be explosive from then on out.

The silver manipulation issue is heating up again with another CFTC investigation underway. For more background read Ted Butler's recent article at silverseek.com.

One parting comment: We should never underestimate the power and resoursefulness of the people that want to control us as being oriented towards hard assets. The sharp drop in gold and silver prices over the past months should only reinforce this concern. In the past apparent moon shots on the precious metals have been met by temporary serious cooked-up selling maneuvers by the opposition. It is better to buy into declining markets avoiding up-flares for market tactics.

Some current trends: Money continues to flow into the Buffalo 1/10, 1/4 and 1/2 ounce coins. In the precious metal stocks cash continues to flow into royalty companies such as Royal Gold(RGLD-OTC) in the US and Franco-Nevada(CA:FNV at bigcharts.con) in Canada.

Royal Gold made a new high last week at $48.91. Franco-Nevada is still down about 20% at $19.98 from it $24.95 high in Canadian funds as both act superior to the general high priced gold group shares that remain on average at about 40% under their high points of the year.
 By Hans Kummerow

12/19/2008  10:42AM

So this was the last triple witch day this year. My guess is, that a lot of people had been caught on the wrong foot by the recent sell-out of the US-Dollar and have tried to pull the indices in their direction for todays closings. The US-Dollar has appreciated by 4 cents against the Euro. An extraordinary move for a single day! And that has hurt US-$ gold price as usual.

Volumes are not to large any more because many people have already left for their X-mas holidays. And the big players have made their stance for the balance-sheet ratios as well.

As triple witch day goes, fundamentals will probably return.
 By bluejay

12/19/2008  9:08AM

Gold $339.60
US Dollar 81.08
Crude Oil 36.56

A few Gold stocks and a quick review of the Philadelphia Gold and Silver Index(XAU)

In today's gold sell off there are some pockets of strength in the gold stocks giving the bullion price some relative strength characteristics.

The following stocks will do quite well with higher gold prices and are putting in a good showing today.

RandGold Res.(GOLD_OTC) 42.70 up 2.54 or 6.33%

Royal Gold(RGLD-OTC) 43.49 up 1.47 or 3.5%

Kinross Gold(KGC-NYSE) 16.80 up .46 or 2.82%

Agnico Eagle(AEM-NYSE) up .60 or 1.37%

The XAU, following its naked short selling oriented crash to the 63.52 level, has righted itself. The last on the Index is 110.91, unchanged for today.

The major pivitol area in this market is where the 5000 and 2500 day moving average lines are currently located in area on the chart of about 100. Even though the forced selling that took place in the recent past breached this level the Index has returned to its positive bullish stance.
-----------------------------------------------
Bill Murphy's Meeting with CFTC - Update
posted on Dec 18, 08 06:05PM
GATA Chairman Murphy reports on meeting with CFTC

Submitted by cpowell on 02:31PM ET Thursday, December 18, 2008. Section: Daily Dispatches

By Bill Murphy, Chairman
Gold Anti-Trust Action Committee Inc.
Thursday, December 18, 2008

About 45 minutes before I was to leave for my meeting with Commissioner Bart Chilton of the U.S. Commodity Futures Trading Commission, this news hit the tape:

"Obama to appoint Gary Gensler to lead Commodities Futures Trading Commission -- AP."

Gensler is a former undersecretary of the treasury and assistant secretary of the treasury.

Gensler is a Goldman Sachs alum and a Treasury man. Obama is putting one of the key figures in the Gold Cartel scheme into the top role at the CFTC. Talk about the fox guarding the henhouse! But the bad news might be good news.

My meeting with Chilton went on as scheduled and lasted about 50 minutes. The surprise was that three others from the CFTC staff attended, including the deputy general counsel. One of the other staffers had already viewed the video of GATA's Gold Rush 21 conference.

Chilton listened intently, took notes, as did one of the others, and asked many questions. I laid out GATA's presentation. I am not going to get into all the details, as we will see what takes place in the months to come. But I chuckled when telling them that if they really wanted to comprehend what the gold price suppression scheme is all about, all they have to do is go to their new chairman -- at the right time. No one knows what is going on better than he does.

I did not hold back. I said the main culprit of the Gold Cartel was our own government, which has been in league with bullion banks like JPMorganChase.

Naturally, I drew parallels to the Madoff scandal and how the Securities and Exchange Commission ignored nine years' worth of probable cause to suspect a Ponzi scheme. I also laid out how and why what is occurring in gold and silver could lead to a much bigger scandal if the price suppression scheme is not stopped -- and that is because the Gold Cartel is running out of the gold needed to meet the growing annual deficit between supply and demand.

I was very impressed with Chilton, and he said my trip to Washington would not be in vain.

There are two things for sure. First, as in the Madoff scandal, no one can say the powers that be didn't get the scoop, the facts about the gold price suppression scheme -- what has happened and why. And second, if there is one person in Washington who will try to get to the truth about gold, this is the man.

----------------------------------------------------
 By bluejay

12/19/2008  7:40AM

Gold $833.90 off $19.20
Euro 1.3944 off 2.37%
US Dollar up 1.37%
Crude Oil off $ 1.77

Gold started getting weak overnight near the close of the Hong Kong market by breaking minor daily support just below $850 and continued lower during the London session hitting $829.20.

Supporting gold's fall was the continuing dead cat bounce of the US dollar. J.P. Morgan's suspected continuing bear raid in the oil market persists in bringing down prices giving the US economy some much needed relieve. Merry Christmas motorists. I'll be locking in some cheap gas prices on a RV fill-up tomorrow.

The cabal in the gold market continues to seize and smother excitement of the metal's well wishers on daily technical strength. Their message is clear, if you join in on any buying sprees we will give you a hangover. I'm sure recent selling is coming from some big US banks along with the usual bashers at Goldman Sachs and J.P. Morgan.

At the moment in brisk trading gold is coming back with a last of $840 plus. I would suspect that more daily selling pressure will come back into the market at this level as it has shown to be troublesome in today's trading.

Gold's free fall from the $880 level is still in motion as we await the stench from the rotting US dollar to resurface.
 By Hans Kummerow

12/18/2008  10:42PM

The big summer rally of the US-$ is probably best explained by roughly 10 Trillion US-$ that European Banks had borrowed from US-Banks earlier and that had to be repaid when lending among banks froze up.

The rally was also funded by large amounts of American investments in other currencies that where terminated and called back home when credit tightened in the US-home-market. I have no information about the size of this "repatriation"-Cash-Flow though.

Now both US-$ buying activities have come to an end and the fundamental trend is back. And the fundamental trend is signalling a much weaker US-Dollar. Much weaker than what we saw in March of 2008.

As long as market-participants are using gold as a hedge-tool against currency risks, the US-Dollar denominated price of gold will continue to go up while the US-Dollar floats against other currencies except the British Pound.

Because that is floating just like the US-Dollar and is nearing parity to the Euro. "Sic transit gloria pfundis".
 By bluejay

12/18/2008  10:13AM

Gold $855.60 off $11.80
Silver $11.03 off $ 9.33
Gold/XAU Ratio 7.57
Gold/Silver Ratio 77.57
Crude Oil $38.00 off $2.06
US Dollar Index 79.21 up 0.65

Gold's party of the recent past days got a wet blanket thrown on it this morning near the $880 level and has been back peddling ever since. It appears that gold will be on the defensive for a short unknown period of time to follow.

Crude this morning is lower at $38. Who would have thought? Thanks, J.P. Morgan. See, these guys are good for something after all. Gasoline here in Sebastopol, California was $1.59 yesterday and is expected to go a wee bit lower. This is a nice Christmas present for motorists.

The US dollar is doing a dead cat bounce this morning being up 0.65 at 79.21. The recent intermediate rally to about 90 looked much like the Fannie Mae rally in March of 2008 when it went from $18 to $35. The last on Fannie today is 67 cents.

I looked at the chart on the Euro this morning and saw a significant chart formation that it busted out of to the upside from about five days ago at 1.31. The formation is called a right ascending triangle. The five day run took it near 1.45. That's about an 11% move, not bad.

The Euro made its high at 1.60 in March this year and during the dollars big rally traded down to a low of 123.50.

I consider $846 to $850 as being support for gold over the days ahead. Go gold!

We're hitting the road in the RV on Saturday, weather permitting, to spend some Holiday time with our girls in Reno, Nevada. I hope we can get over the icy Sierras in one piece and back again.

Our family wishes one and all a festive and Happy Holiday Season.
 By Hans Kummerow

12/18/2008  4:13AM

The sale of the US-$ aginst the Euro continues today at an unprecedented pace. As well as the sale of the Pound Sterling, by the way.

In €-Denomination the price per ounce of gold has actually dropped below the 600-line in today's fixing at London.

Physical gold is hard to get in Europe too. The mints in Switzerland are now working three shifts and still cannot meet the demand for coins and small bars. And golden X-mas presents are available only with huge mark-ups.
 By Hans Kummerow

12/17/2008  8:56AM

The US-Dollar lost 8 cents against the Euro within less than 24 hours. I cannot remember such a wild move of the US-$ within the last 45 years that I know from personal experience.

When I was a young man, one of my teachers used to compare the circulation of paper-money to the issuance of corporate stock that is fully transferable without the endorsement of the secretary of the company.

In this comparison, paper-money bills were the share-certificates of the stock of the "issueing company", the national economy emitting the "stock".

Bill Bernanke has issued a lot of new certificates recently, watering down indivdual share-holder value. And the outlook for future appreciation or dividends is bleak.

Therefore the shareholders do what you would expect them to do, if stock is underperforming and outlook is dire - they sell. And it seems to me that there are still many stop-loss orders in the market.

Gold will probably go much higher in US-$ denominated prices.
 By bluejay

12/17/2008  6:57AM

WE HAVE BLAST OFF

Last on gold is $869.30 and its running.

Right on Hans!

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