<<light at the end of this tunnel>> <<price of gold of $500 per ounce>>
Bob, this should go to Phil but he is stuck in a "don't believe" gear.
Trying to help Phil is like pushing a car on level ground that has a battery
low in charge, and I'am pushing and yelling to Phil in the drivers seat to
let up on the clutch, but Phil will not release the clutch and let a low
gear engage because Phil doesn't believe. Ok, but why does Phil keep on
asking me to keep on pushing ?
lemetropolecafe.com (GATA) Gold Anti Trust Action
Midas du Metropole "The Gold Market and Precious Metals Commentary"
Shoot out at OK Corral. The bears guns are blazing as every rally is
sold by Goldman Sachs and Co. For three days now they have attacked all
bids and have been aggressive sellers on the close, trying to get a low
a close as possible with an attempt to make the chart look at negative
as possible.
There is a method to this madness and sound reasoning from their
perspective. The powers to be and the bullion boys knew the gold was
about ready to rocket as the price approached the $290 area. Reports
were surfacing that expectations for much higher gold prices in the near
future were rampant. Stock brokers were experiencing the highest order
volumes for the senior gold companies that they had seen in many years.
We highlighted the fact to you that the Australian gold shares
experienced their biggest surge one day in 6 years.
The bears knew $290 had to be protected as that was where many of the
present gold borrowings were inititated and a move much above that point
could create a bandwagon effect of encouraging new spec buying and
causing some of the gold borrowing shorts to run for the hills by buying
back bullion to close out their leased gold positions. That sort of
combo buying was threatening the control of the gold price that the
gold cartel had in place.
The bears had ( and still have ) a problem. The natural supply demand
deficit was eating into all their borrowed gold selling. The collusion
was about to unravel. They had run of out bullets as all the talk about
IMF and Swiss gold sales was so overdone and so overhyped that it had
become stale and had lost its effect.
Desperate, they pulled a trump card out of their hat and in doing so may
have sealed their own doom down the road as the story is played out. It
is no secret that the Bank of England is distancing itself from the
Treasury on the sale of the English gold. The recently retired Terry
Smeeton, a lifer at the Bank and former number two man at the Exchequer,
would never have made those negative comments about the BOE sale without
some sort of higher up approval.
The word is out that it what a political decision to sell the English
gold. Now what does that mean? Why was a political decision made to sell
gold right as it was about to break out of a very strategic point? Why
not wait? Why was this political decision made at a time when several
bullion dealers were telling their clients the day before the BOE sale
that the price of gold would NOT go north of $290.
We will elaborate on this in a future Midas, but that brings us back to
the story of the day. This may have been just about the last bullet that
the bears had to shoot. When you only have one bullet left to score
with, you had better make it count. That can account for the aggressive
nature of the bear assault. Goldman Sachs and others are making no bones
about it. Their intent to try and influence other speculators and
producers to sell is very clear.
The $273 - $274 area is a very important one technically as this support
point goes all the way back to 1979. If it is broken decisively, the
floor says the price of gold could sink all the way to $250. That is
just the word that Goldman Sachs wants spread around as it terrifies
producers and salivates hungry specs.
If they succeed, the colluding gold shorts may be able to extricate
themselves from their monstrous positions and try to escape the heat
that is finally bearing down on them. It may be a now or never duel.
In addition to the GATA flack, a report has surfaced from the most
sophisticated of circles that Goldman Sachs ( for a possible various
number of reasons which we will discuss in the near future ) has a 1,000
tonne short position on their books. While the mainstream media has been
cowered not to talk about what is making the rounds, it is out there and
is not going away anytime soon. GS surely does not want this to become
mainstream conversation while they still have this position on. In other
words, they want out ASAP. That is why they are trying to break this
market so hard right now.
In the past, they just toyed with the market. They would let the specs
get short and run them in. The specs would start to get long, the
colluders would tank the market. Then they would do it all over again.
The incredible changes in the CFTC Traders Report made this plain as
day to market watchers. They picked everyones pockets and very few
market participants realized or commented on what they were doing.
That is not the case anymore. Not only is the believability of their
being short 1,000 tonnes growing by the day, but outside forces are
forcing askance looks at what is going on to the price of gold. The bond
yields have soared to over 5.90%. The Fed announced today that their
bias is to tighten. Yet, the price of gold goes south every day. The
price action of gold to those that do not understand that this move down
has been orchestrated, makes no sense.
It does to us.
Yet, it is no cakewalk for the shorts. Guns are blazing. The trade
bought the close on Comex today with a hefty 1,000 contract order. The
Australians are the most hedged and in Aussie dollars ( around a .67
close today ), the gold price gets cheaper buy the day, continuing to
make multiyear lows and trading at its lowest price since 1985. That is
why there is such widespread talk of Aussie producer buybacks.
Physical demand for gold continues to soar. In India the gold premiums
are now as high as 13.6% and the price of gold in Indian rupees is fast
approaching the price point where gold imports were legalized in India
and the gold price soared in rupee terms.
And finally, the cartel knows it is now only a matter of time before the
world learns what they have been up to. The gold carry trade is in its
final stages of super activity. The Bank of International Settlements in
Switzerland has been alerted to the size of the gold loan positions and
we hear they were shocked ( at least they pretended to be ). Thus, we
expect the availability of leased gold to be curtailed. Yesterday ( and
we have to check this out ), it was reported the gold lease yield curve
was inverted for awhile. That would indicate nearby tightness and a
possible beginning of the curtailment. We will watch closely to see if
there is any more inversions.
And finally, many producers are just plain teed off and saying what is
really on their mind and it is sweet music to GATA ears:
Financial Times May 18 - Placer Dome chief believes malign forces are
depressing gold prices,
John Wilson, President and CEO of Canadian gold group, Placer Dome,
avoids words such as conspiracy, but believes malign forces are
depressing world gold prices, writes Gillian OConner.
I find it difficult to believe, given what Alan Greenspan said in the
middle of last year, concerning the central banks intention to maintain
a low gold price, that there is not some concerted action going on
between central banks to hold inflation down through holding down the
price of gold, Mr. Wilson says.
He says that Placers expansion plans, which could have involved equity
funding, has been shelved because of the sharp fall in its share price
that followed news of a UK Treasury gold auction.
John Wilson is in London for a gold conference. You can be sure he is
hearing the same tale that we told you about the cozy relationship among
our administration, Gavyn Davies ( who is the Chief International
Economist for Goldman Sachs ) and Tony Blair who has good old Mr. Davies
as his economic consultant. Yes, indeed, this is the talk of the gold
conference in London and this is why his blurb appeared in the Financial
Times. This is what they are talking about when the word, political is
mentioned.
( By the way, GATA always speaks of collusion, manipulation, cabals, and
cartels. While we do not really mind the word conspiracy so much, it is
the press that uses this word about us. We have never presented our
agenda using that word. Tis all semantics anyhow. It surely is the case
the financial forces that be ( officialdoms and the investment banking
and bullion houses ) have surely conspired to trample down gold. )
This is part of the bombshell that will eventually see the light of day.
The English libel laws are severe and the British financial press is
loathe to print names and get into real nitty gritty until they have
done more homework. If they do not do their homework, others will do it
for them and then this juicy story will really see the light of day.
So, while the recent days have been painful for the gold family people,
there is significant light at the end of this tunnel. This incredible,
now transparent scandal will be "mainstream press" exposed in the not
too distant future. The mainstream press will wakeup soon and give this
story the time of day like Aaron Task of www.thestreet.com and other
internet columnists have done. As that happens, the shorts will start to
freak, the price of gold will rise and march towards its equilibrium
price of $500 per ounce.
Bill Murphy ( Midas )
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