Bill Murphy writes ......................From lemetropolecafe.com:
Ouch! Gold Cartel Wins A Battle
The Gold Cartel won this round. That is bad enough. What is almost as bad is to read the general gold market commentary. All the pundits and reporters continue to talk about is gold and the dollar when that is not the story at all. It is all about The Gold Cartel versus the physical market.
When I woke up early this morning and saw gold down $8, I thought Osama Bin Laden was caught, or a surprise gold sale was announced. The euro was a bit lower, the yen was higher and oil was soaring at $35.30 per barrel at the time – a scenario for gold to be up a few dollars. Instead, it was trashed.
For weeks The Gold Cartel capped gold’s rally by throwing all they had at it to prevent the price from blowing through $430. The specs piled in gradually and built up a vulnerable position which the price-rigging managers were looking to exploit and have been for some time. They finally succeeded. With an open interest of 300,000+, there is no telling how much damage they could do in the days ahead. It will all depend on how firm the physical market is. If it stays firm, the stronger hand big specs will hang in there and the technical damage will be minimal. If it is very weak, it could get very ugly and gold could blow through $400. Monster spec liquidations can be vicious.
My scorecard:
*Wrong so far on prediction on a gold price explosion in January
*Right on what this market is all about: market manipulation
The most powerful financial market people in the history of the world have got their way for the moment. They had better savor their short-term battle victory while they can because there won’t be much joy for them in the months ahead. Unless I have this all wrong, the powerful fundamental forces at gold play will reassert themselves in the coming weeks and will catapult gold right back up again. This time gold will blow through $430 and stay above that level.
Over and over have heard me bring up the $6 rule The Gold Cartel instills on gold price advances. Of course, that rule is lifted on price declines. Soybeans go up 30 cents and down 30 cents, not gold. Just more evidence gold is a managed market.
Gold has considerable support around the $407/$410 area, which it partially ate through today.
Gold
https://futures.tradingcharts.com/chart/GD/24
Good news! Just got off the phone with my STALKER source. There was an unscheduled phone conference this afternoon with THE STALKER’S US buyers. They have a NEW order for $800 million to $1.2 billion to be completed between now and March. 72 tonnes of new gold buying is nothing to sniff at! The orders are still coming out of Australia and my source continues to believe they are for mainland China.
If this is any indication what is going on all over the world re gold, this pullback will be brief. First, margin call liquidation pressures must be accommodated.
How bullish is this?
My commodity broker friends in Toronto are superb, highly respected and know their stuff cold. They had many clients who were perturbed because they missed the recent gold/silver move up. For years they have waited for such a move. Last week my friends targeted $408 gold and $6.20 silver (upped from $5.80 because of the big silver advance) as prayer entry points should there ever be a pullback. "A gift if there ever was one it would be," they told their clients. Both of those targets were hit today. How many of those clients that desperately wanted "in" do you think bought today? I’m sure you guessed the answer: Zero!
That is a very bullish sign. To every single man and woman, they were too nervous to step up to the plate. This also gives me encouragement this dip will be as brief as it is brutal. Had they all piled in, it would be an indication there was a lot more pain ahead of us. This doesn’t mean we go right back up, but we shouldn’t stay down here too long.
Surprisingly, yesterday’s open interest barely changed in both gold and silver, which tells us The Gold Cartel was pressing their case while physical buyers were pricing their orders along with some spec liquidation.
The silver action was interesting. After such a steep run up recently one would’ve thought it would have been belted harder with gold getting socked like it did. With gold dropping $8 to $9 early, silver made a low of $6.15. Gold continued to make low after low as the day wore on, but silver’s early low held. Very surprising! Silver liquidations can be a nightmare. This one could turn out that way too. However, with the reports we have of such significant cash buying, $6 should hold. My guess is tomorrow’s low (if it takes out today’s $6.15 low) could be it for the silver correction.
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Houston’s Dan Norcini:
One thing about these fund induced sell offs - they tend to come in waves of three days and then subside. We are into day two and with the volume that was generated today, I am thinking we have now seen the worst of it. I would not be surprised by a bit of a pop in the Asian session this evening as this looks way overdone to me. A 3% sell off in gold for a less than 1% sell off in the Euro looks to be a bit much. This looks a lot like "Black Friday" back in October last year when gold got thumped for a $13.70 hit in one day only to promptly stabilize and come roaring back within the next two weeks. As a matter of fact, the low made before the resumption of the rally was only a $1.00 lower before gold recouped all of its losses. I do not think we have that much selling left in this market as the risk/reward ratio no longer favor selling at these levels. Gold at $400 will be swarmed and the notion of trying to press $8.00 out of a short when $425-$430 is lurking overhead as an exit point is not a smart play as the ratio is no good. We might have residual margin related selling left in the morning but I have the sneaking suspicion that buyers will be lurking in the wings for that. Also, we need to keep in mind, someone was buying lots of gold at 408-409 today. The cartel will be looking to capture their short-term profits from the recent shorts they established near the 425-430 level and are looking for places to cover.
Best,
Dan
The Rumor Mill News Reading Room
https://www.rumormillnews.com
RUSSIA'S GOLD RESERVES HIGHEST IN THE WORLD!!!
Posted By: TONZAL
Date: Wednesday, 14 January 2004, 8:06 p.m.
RUSSIA'S GOLD RESERVES HIGHEST IN THE WORLD!!!
Russian President Vladimir Putin, speaking at a meeting with the government leadership on Dec. 29, emphasized Russia's vast amount of gold reserves, which are among the highest in the world.
In Russia, the central bank reported cash exchanges during October 2003 at a level not seen since the 1998 crisis: Russian citizens exchanged over $5.5 billion of foreign currency. In its monthly review of the currency market, the Russian central bank noted: "The decline of the ruble-dollar exchange rate in September, combined with the rise of [the] euro, greatly increased the interest in the euro among Russian individual depositors. The demand for euro[s] increased by 42% in October. The structure of currency demand has abruptly changed in favor of the euro, while the demand for the U.S. dollar fell by 11%." Russian President Vladimir Putin, speaking at a meeting with the government leadership on Dec. 29, emphasized Russia's vast amount of gold reserves, which are among the highest in the world.
Complete article at:
https://www.larouchepub.com/other/2004/3102dollar_box.html
-END-
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One thing I am sure of. No way that 90% of the gold share market timers who advised clients to sell all or part of their gold share holdings are going to get it right. If they do, then I will have seen a first. The consensus is much too one-sided. There is nary a bull on the gold shares out there anywhere. I know that for sure because I spoke with Jim Puplava of www.financialsense.com note and he says he can hardly find any either and Jim receives about 40 newsletters.
Yes, some have timed their sales OK recently with many coming with the HUI between 220 and 245, but the trick will be the re-entry points. My guess is some will be clever enough to get back in before they shares rally, however, most will either miss out all together on this historic investment opportunity of a lifetime or will have to pay up at higher levels than their exit points.
It’s not that easy to trade a mega move like we have in the gold/silver shares. Too many advisors and their clients are waiting to buy the big dip. When most everyone thinks a certain way, the opposite usually occurs. There are going to be new gold share buyers or the "Quick Draw McGraws" who want to beat so many other would-be buyers to the punch. I see them coming back into the fray any day now, probably had some in there buying today.
The HUI actually came roaring back from a 214.86 low to finish at 218.97, down 9.87. It rallied to 220 before settling selling off slightly on the close. The way I see it:
*Today’s low will be it for the HUI. Those analysts who pointed to the falling gold shares as a bad omen for bullion were correct, for whatever the reason. The gold shares are likely to head higher in the weeks to come, leading bullion as it weathers some margin call selling pressure for a few days.
*If the HUI can move above 220 and stay there, it will spook exited gold share buyers into putting their toes back in the water. 220 has been a pivotal technical level. A quick breach above this point, one which holds on a closing basis, would give credence that today’s breach on the downside was a false breakdown.
The XAU dropped 4.28 to 97.34.
I heard tales of panic retail gold share selling today. Speaking of gifts:
*Golden Star at $5.05 – it came back to finish at $5.50, down 13 cents.
*Samex at 67 cents – it came back to 80 cents, down 11 cents.
These stocks and many others are still big time bargains.
What has changed since gold made 15-year high closes above $426 this week? Nothing, except we have had a small pop in the dollar. The gold fundamentals remain a "10+++." Gold and silver have a lot of life in them and will soar in price as the year goes on.
GATA BE IN IT TO WIN IT!
MIDAS