Bill Murphy writes.....From lemetropolecafe.com:
The gold market action is nothing short of spectacular. Yesterday was something else. Today was out of this gold world.
Following last night’s Comex close, a stunned Gold Cartel went into action to take gold down again in the Access market, where there was little volume and slight resistance to their selling. By the time the kangaroos came into trade in Australia, gold was as much as $5 lower. How blatant an attempt at rigging a market can you get? No free market trades like that right after such a storming Comex close like we had on Wednesday.
Even though the dollar was extremely weak this morning, the cabal kept the pressure on gold, taking it down $4/$5. Then about mid-day, the free-market gold forces unleashed a furious attack on a now reeling Gold Cartel. For the second day in a row, they said: "in your face" as gold rallied right back on HEAVY volume. This time gold reversed from down sharply, to up sharply. As touched on in yesterday’s MIDAS, I have never seen gold trade so superbly like this, at least since the Café opened. Two days in a row, the cabal went after gold and failed to keep it down. The market is screaming: I WANT TO GO HIGHER, MUCH HIGHER!!
https://futures.tradingcharts.com/chart/GD/63
For the second day in a row, my floor sources described the gold action as "out of control." Goldman Sachs was a furious buyer, most likely covering shorts they put on to knock gold lower the past two three days. In general, "the trade" bought all the way up on the big rally from $5 down on the day to $5 up. It was the right kind of buying.
Yesterday’s open interest only fell 2289 contracts on the sharp break to 204,035 contracts. We know there was a good deal of fund liquidation, so it confirms my input that the break attracted a lot of new buyers that missed the last move up to $370 /$375. Certainly, there was a good deal of new buying today too, in addition to the panic short-covering by cabal forces.
For years my colleagues and I have talked about the day when gold pops $5 on the opening and closes $20 higher. Based on gold’s performance the past couple of Comex trading session days, that day could be VERY close at hand. Gold is in explosive mode. Volcano watch is on HIGH ALERT!
I am hearing more and more scuttlebutt about toxic gold producer hedge books. Smoke continues to appear on the horizon. My bet is a full-fledged Gold Derivatives Banking Crisis is close at hand. The gold derivatives neutron bomb could go off at any time. There is a threshold of pain that the credit committees at various bullion banks will not tolerate when it comes to financial market exposure. If gold can close over $370 for a few days, I suspect the pain will be too great for some and we will see a forced gold buying panic.
Silver was battered for 12 cents at one point and continues to act as poorly as any market I have ever watched. Did the cabal pounce on silver to help with the attempt at smashing gold? Or was it a story from the LBMA that it has accepted a Chinese Silver Refinery into its fold? The thinking on that is that more Chinese silver might be hitting the market.
Still, silver remains a steal in my book.
Technical market comment from brother Tim:
Hey Bill, Wow! Haven't seen gold put in two closes like this in many years. Someone wants it pretty badly. It's almost like watching "unrigged" market action again. Most importantly, we have had two big wooshes down the last two days taking out many of the nervous nellies and the potential for an upside explosion is much stronger now than it
was two days ago. We took out the small overhead resistance formed in the last week around $367 and now just need one more push to get through the all important $370 level. Brother Tim PS. Mom said to get gold moving. She wants to go on her cruise to Norway before she hits 85.
Tim Murphy
1-800-289-2646
Swiss America Trading Corp
.....
The following story is a real beauty. This news alone could send gold $600 bid, as it becomes fully understood by the investment world. The article is devastating to President Bush and his illusion spewing associates. No wonder people, like his Budget Director and Spokesman, are resigning left and right.
https://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1051390392975&p=1012571727092
US 'faces future of chronic deficits'
By Peronet Despeignes in Washington
Published: May 28 2003 21:57 | Last Updated: May 29 2003 1:16
The Bush administration has shelved a report commissioned by the Treasury that shows the US currently faces a future of chronic federal budget deficits totalling at least $44,200bn in current US dollars.
The study, the most comprehensive assessment of how the US government is at risk of being overwhelmed by the "baby boom" generation's future healthcare and retirement costs, was commissioned by then-Treasury secretary Paul O'Neill.
But the Bush administration chose to keep the findings out of the annual budget report for fiscal year 2004, published in February, as the White House campaigned for a tax-cut package that critics claim will expand future deficits.
The study asserts that sharp tax increases, massive spending cuts or a painful mix of both are unavoidable if the US is to meet benefit promises to future generations. It estimates that closing the gap would require the equivalent of an immediate and permanent 66 per cent across-the-board income tax increase.
The study was being circulated as an independent working paper among Washington think-tanks as President George W. Bush on Wednesday signed into law a 10-year, $350bn tax-cut package he welcomed as a victory for hard-working Americans and the economy.
The analysis was spearheaded by Kent Smetters, then-Treasury deputy assistant secretary for economic policy, and Jagdessh Gokhale, then a consultant to the Treasury. Mr Gokhale, now an economist for the Cleveland Federal Reserve, said: "When we were conducting the study, my impression was that it was slated to appear [in the Budget]. At some point, the momentum builds and you think everything is a go, and then the decision came down that we weren't part of the prospective budget."
Mr O'Neill, who was fired last December, refused to comment.
The study's analysis of future deficits dwarfs previous estimates of the financial challenge facing Washington. It is roughly equivalent to 10 times the publicly held national debt, four years of US economic output or more than 94 per cent of all US household assets. Alan Greenspan, Federal Reserve chairman, last week bemoaned what he called Washington's "deafening" silence about the future crunch.
US tax-cuts
The estimates reflect the extent to which the annual deficit, the national debt and other widely reported, backward-looking data are becoming archaic and misleading as measures of the government's solvency. Mr Smetters, now a University of Pennsylvania finance professor, said tax cuts were only a fraction of the imbalance, and that the bigger problem "is the whole [budget] language we're using".
Laurence Kotlikoff, an expert on long-term budget accounting, alleged in a recent Boston Globe editorial that the Bush administration suppressed the research to ease passage of the tax-cut plan.
An administration official said the study was designed as a thought-piece for internal discussion - one among many left every year on the cutting-room floor - and noted the budget's extensive discussion of projected, 75-year Social Security and Medicare shortfalls.
-END-
.....
The Gold War rages on. Once again we are back to the basics of what the gold market is all about. On the one side you have a corrupt cabal that is doing all it can to keep the gold price from rising further and is desperately defending $370. On the other side you have physical market buyers that are out there in droves waiting to buy every dip. The bad guys lost the battle today and continue to take heavy casualties. As each month goes by, they have less and less troops (gold supply) to win the day. Our side gets new recruits every week as physical gold demand surges. The outcome is inevitable. Whomever The Gold Cartel has left will be carried out on stretchers, as they their staggered army is routed.
The gold shares were suspiciously firm right off the bat. They barely blinked as gold was sent back down to $360. That was very noticeable. It was if a lot of someones knew something was coming. Since the trade was a big buyer of gold, the same bullion/investment houses were probably buying the gold shares early too.
The action of the gold shares continues to be dismal relative to bullion. The HUI could only manage a 3.24 win to 140.20 with gold closing in 5th best close in seven years. The XAU rose a piddly 1.38 to 73.15, up 1.38.
To put that in perspective. The HUI closed at 155 with gold at $326 one year ago. Most everyone in the investment world remain completely clueless as to what is in store ahead for the price of gold. The historic investment of a lifetime is here and investors can’t wait to sell their shares, or the have no interest in the sector. C’est La Vie. It’s our gain, their loss. This lack of understanding and interest in the gold shares will change, probably when gold takes out $400. There will be a gold share buying panic, just when the offers dry up.
Our REALLY BIG days are close at hand!
GOT TO BE IN IT TO WIN IT!