Gold Pops Overseas With Comex Closed, Cabal on Holiday
November 29, 2002
Gold $318.70 up $1.70 - Silver $4.42 up 1 cent
As reported in the last MIDAS, due to Gold Cartel activity on the Comex, the PM gold Fix in London was lower than the AM Fix for at least seven days in a row. With Comex closed the past two days, the PM Fix has been higher than the AM one. Today’s numbers:
AM: $318.25
PM: $319.05
All just pure coincidence! Right!
Gold closed right in the middle of the recent trading range of $316.50 to $320.50. Recent gold trading has been choppy and coilish, with The Gold Cartel stopping all rallies and a very firm physical market supporting all dips. The gold fundamentals are extraordinarily bullish, led by negative interest rates and growing gold demand in the East.
With terrorist concerns growing and War talk to be on the increase each passing day in December, it is hard for me to see how the cabal can hold down the gold price much longer. The massive short position in gold is extremely perilous. Our camp has no real clue what their exit strategy is, but look for something dramatic. More than likely, the US Government will make some sort of ludicrous pronouncement, which, in reality, will be some sort of cover-up. They will either bail out the bullion banks (allowing cash settlement for physical), or change the gold trading/gold investment laws in the United States. No reason to be alarmed on that for now. I can’t imagine them doing anything until the price of gold rockets. They don’t want to be TOO obvious.
Whatever they concoct, the end result will very friendly for the price of gold, VERY FRIENDLY. Whatever they come up with will alert the investment world that GATA is correct about the massive short gold positions. Any Western edict will only stimulate demand in the East – which is where most of it is coming from anyway.
The price of gold is going to explode regardless of any devious plan The Gold Cartel throws out for Western public consumption.
The John Brimelow Report:
Friday November 29, 2002
Gold turned back resolute efforts to break it down, both on Thanksgiving eve and particularly interestingly, Thanksgiving Day. On Wednesday, against an admittedly adverse backdrop of a euphoric Wall Street, Comex gold came under relentless pressure: "…funds were sellers throughout the day" (UBSWarburg). Reuters reported:
"February gold …ended 90 cents lower at $317.80 an ounce, moving between $319.50 and $317.70, with most of the slippage coming in the last half hour… dealers said there was good fund selling late in the day"
Volume was estimated at a very heavy 70,000 contracts, most of which was outright trade: Tuesday’s volume turned out to be an enormous 104,570 lots, of which 53,000 were switches, slashing Comex Dec to less than 17,000 contracts. So on the two days before the long weekend, well advertised to be quiet, outright daily volume exceeded 50,000 lots. Open interest on Tuesday rose 856 lots – no liquidation evident.
On Thanksgiving Day, gold came under serious pressure during Japanese time, fooling several observers into announcing TOCOM selling. The frequently more astute Platt’s Metals service, however, was probably nearer the truth:
"Gold futures on the Tokyo Commodity Exchange saw "good selling interest from overseas" Thursday, Japanese traders said. "The opening price (of gold) was $317.5/oz, but lowered on good selling, mainly from overseas funds…"
What species these "funds" might be is an interesting question, bearing in mind that the CFTC window into Fund activity indicates both small and large specs staying resolutely long. Experienced gold observers will not have been surprised to see, on Bloomberg this morning, another resuscitation of the "Bundesbank-to- sell-gold" ploy, with a Bundesbank board member talking again about what the Bundesbank might do when the Washington Accord runs out – some two years from now.
In the event, the raid on TOCOM failed to trigger stops. Bidding by the usual physical buyers stabilized the market, and eventually news of the Kenyan hotel atrocity frightened opportunistic shorts. On Thursday, TOCOM traded the equivalent of 13,660 Comex lots, with open interest slipping 122 Comex equivalents: today the active contract reached a 1 week high, as volume rose 19.2% to the equivalent of 16,285 Comex contracts. Open interest slipped again, by 376 Comex equivalents.
Indian ex duty premiums: Thursday: IS $2.64, PM $1.49, with world gold at $316.55 and $317.60. Well above and somewhat below legal import point. Friday: IS $1.60, PM $1.80, with world gold at $318.60 and $318.25. Slightly below legal import point. India has clearly absorbed a good deal of bullion in the past several days, and prefers prices under $318.
"Spot gold was lifted early on Friday by some buying back by Tokyo-based traders and physical buying. "There has been reasonable physical demand in gold for a couple of weeks now, and while the markets were quiet this morning, there was evidence of physical demand," said a trader in Singapore"
In Reuters’ words. Reuters also carries the familiar story from New Delhi orchestrated by dealers trying to talk down the gold price: the simple fact is that India is willing to bid domestic gold up to the point where it is profitable to import legally around $316; they were not willing to do this earlier this year.
This raises the curious matter of the Virtual Metals Research paper presented at the Euromoney gold conference earlier this week. Alleging that "Annual demand for gold will drop by 200 to 300 tonnes in India" this talk, (see
Link to Article Source
2) In principle, gold’s friends want to see declining Indian off take because that means higher prices and new buyers – as when Japan did some serious buying in the first quarter of this year. In practice, India, one of the healthiest and best financed large economies in the world, looks likely to continue to be a growing buyer, subject to seasons, price fluctuations, and FX rates.
3) "Nobody really knew the amount of gold hoarded in India, but some suggested it could be as much as 12,000 tonnes, equivalent to all the gold in central bank vaults worldwide" Virtual Metals is quoted as saying. This is the outfit, lead by Jessica Cross, which distinguished itself by snuggling up to establishment opinion when commissioned to study gold lending volumes by the World Gold Council. Central Banks report some 33,000 tonnes of gold holdings, but dishonestly conflate "gold in vault" with "due from (lent to) Bullion Bankers". Virtual Metals conformed to orthodoxy by suggesting this latter quantity was less than 5,000 tonnes. The only way the above statement makes sense is if it refers to "gold in hand" which implies that the Veneroso/GATA/ Turk thesis is the more accurate. No doubt it will be explained as a mis statement – a strange venue for mis statements.
JB
The following re-run story mentioned by JB is pathetic and part of the cabal script. It has graced Midas commentary no less than 5 times over the past 18 months:
Frankfurt, Nov. 29 (Bloomberg) -- Bundesbank may sell some of its $35 billion of gold, the second-largest holding by a central bank, to buy more profitable assets, executive board member Hans- Helmut Kotz said.
Such an action likely wouldn't come until the Washington agreement between 14 European banks and the European Central Bank to limit gold sales ends in 2004. Bundesbank's president, Ernst Welteke, in July said he wanted the accord renewed.
``There is the option, the idea, that some of the gold in the future be converted into a robust, but more profitable alternative,'' Kotz said in an interview with Bloomberg TV. ``One needs something like gold to underline the credibility of the institution. But one can't justify massive opportunity costs over a longer period of time.''
Central banks, as a group, mostly stopped buying gold in the early 1960s and have sold almost 211 million ounces since 1965. They still hold over 1 billion ounces, the largest holdings of gold in the world. Germany lags only the U.S. in gold holdings and has almost 111 million ounces, worth about $35 billion today.
Gold prices this year have jumped 14 percent as slowing world economies hurt stock markets and led some investors to seek an alternative. Gold in London was up 90 cents at $318.75 an ounce as of 8:26 a.m.
The central banks in the Washington accord account for about one-third of all gold held by governments. They signed the agreement to quell market rumors about sales that were hurting the gold price. Gold has gained by about a fifth since the accord was announced in September 1999. –END-
You mean like the English have done so ably???????
Stories about China and gold are on the increase. This is only the beginning as gold consumption is expected to increase by 300 tonnes in China next year. That is a 150% yearly increase and is only the beginning. Wait until 2004! Are the Germans going to be so stupid as to continue to dump cheap gold to the Chinese? The 21-year gold bear market is over. Do the Germans want to appear as goofy as the Swiss, who are dumping half their gold at rock bottom prices to Eastern buyers?
Chinese gold news:
Personal Gold Investment in China Soon to Be Relaxed
A gold market for personal investment will soon come to show up. At the "Beijing Gold and Jewelry Exhibition 2002" convened today (November 27), small gold bars, commonly known as "little yellow croakers" and suitable for personal investment, will make a debut after 50 years of disappearance from the market.
With the opening of Shanghai Gold Exchange, a gold market for personal investment will soon come to show up. At the "Beijing Gold and Jewelry Exhibition 2002" convened today (November 27), small gold bars, commonly known as "little yellow croakers" and suitable for personal investment, will make a debut after 50 years of disappearance from the market.
In the China Gold Mansion yesterday, the staff, wearing gloves, unwrapped cautiously the thick paper, revealing the gold bars inside. Ranging in weight from 500g to 10g, all bars are made of Au 99.99, the highest percentage of purity. A 10-gram bar is worth of over 800 yuan at the customary market price…. –END-
BEIJING, Nov 29, 2002 (SinoCast via COMTEX) -- According to central bank issued Notice Upon Current Gold and Silver Management (the Notice), Central Bank will stop supplying gold for ornaments. Companies who need gold only be able to obtain material gold from the member transactions in Shanghai Gold Exchange. From now on, the gold ration will mainly be adopted in special projects such as war industry and science research.
In terms of the Notice, Central Bank will adopt necessary control over gold market and will launch gold bar and bullion exchange businesses in commercial banks. The detailed measure will be publicized later. As most of companies who need gold are not the member of Shanghai Gold Exchange. There are only 2 ways for them to obtain gold: to manage to obtain membership or to adopt member agent transaction.
If adopt member agent transaction, the handling charge will lift the cost of the gold, says an insider. " The hike of gold is in sight. There is a big profit space. The estimated investment return rate will be 10%." Emphasized the insider. –END-
That’s interesting. The Chinese Central Bank is going to stop supplying gold as ornaments, while the gold industry in the West continues to promote gold as an ornament.
I have had some experience with the West underestimating metals demand in Asia. In the mid 1980’s fiber optics was supposedly going to replace copper in many industries, with demand for copper to be on the wane. Inventories were run down and "just-in-time" inventory stocking was the rage. The price of copper wallowed around 60 cents. In 1987 the price of copper soared to $1.46. Most of the move took placed in only eight months. The West and copper buyers miscalculated the massive demand from Asia as their economies were vibrant and they needed the copper for infrastructure building purposes.
It appears the West, more than 15 years later, is making a similar miscalculation when it comes to gold.
This has not escaped my friend Jeff Dahl, SAMEX CEO, who launched the following two web sites:
Jim Sinclair on a related topic:
Has US adversaries and those that are traditionally bound to them discovered a new and more powerful weapon of War?
Is it now possible, with investigation of Saudi Arabian financial
interests and the suggested financial involvement in 9/11, that The Dollar will be abandoned by many Islamic nations after the Iraq invasion? There is a major unanswered financial question dealing with the WTC disaster.
That question is exactly who was the final principle in the huge, uncommon, TA inexplicable short option dealing in the airlines shares initiated only days before 9/11. I could track that series of transactions with a legal pad and a pencil, if I had only the starting point of the original floor transactions. All one has to do is use the same tools that were used against the Swiss Banks when they represented principles illegally selling control shares in US listed companies. Why has the facts not been public yet? What is the price the Saudi's will pay for not supporting the US in Iraq invasion? Could abandonment of the US dollar by the Saudis and other Islamic nations be a trading card to keep the US out of Iraq and to nullify the option search? Watch the action of the dollar to tell you if the US is going into Iraq. There are Titanic world changing forces at hand now.
N Korea bans use of US dollars
Communist North Korea will stop using US dollars from next month, China's Xinhua news agency said, following a US decision to halt oil shipments to Pyongyang.
The move highlights racked-up tensions between Washington and Pyongyang after North Korea, branded part of an "axis of evil" along with Iran and Iraq by US President George W Bush, admitted it was pursuing a nuclear weapons program.
North Koreans and foreigners would have to convert dollar accounts at Pyongyang's state-run Korean Trade Bank into euros or other currencies, Xinhua said on Friday, quoting a letter from the state-owned bank in charge of foreign-exchange business.
"Hotels, foreign-exchange shops and foreign-related services will receive no US dollars from the start of December," a staff member of the Korean Trade Bank was quoted as saying.
US dollar accounts would be automatically changed into euros if account holders made no declaration by the end of November, the bank letter said.
The dollar ban was part of "political means" to counter the pressure from the United States over the nuclear issue, Xinhua quoted an unnamed British diplomat as saying.
The United States has suspended fuel-oil shipments from December in an effort to force Pyongyang to abandon the program.
North Korea has called the oil cut-off - which takes effect as North Korea's sub-zero winter sets in - a "wanton violation" of the pledges of energy aid for Pyongyang.
Under a 1994 "Agreed Framework", North Korea promised to freeze its nuclear weapons program in return for fuel oil, paid by Washington, and two light water reactors that cannot easily be converted to produce atomic weapons material.
Xinhua said the Korean Trade Bank had also asked diplomatic missions and international institutions to use euros and other currencies, not dollars.
Sample euros in banknotes and coins were displayed outside the Korean Trade Bank, with a poster notifying local residents to change their dollars, but no deadline was given, Xinhua said.
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