June 28 - Gold $392.10 down $8.50
– Silver $5.85 down 3 cents
Coming together is a beginning;
Keeping together is progress; Working together is
success... Henry Ford
It is really an outrage that only the
Russians will publicly acknowledge what GATA has been
pounding away at for over five years. If the mainstream
gold world would acknowledge the truth and come together
to expose what has happened, the price of gold would
be over $500 per ounce in short order. Fat chance!
These lightweights would rather go down with the ship
than take on the powers rigging gold.
Can it be any more obvious that Goldman
Sachs had a mandate to stop the gold price last Thursday
on behalf of The Gold Cartel? Only one other time
in recent years has the buying power of spec longs
taken out the $6 Rule. The last time gold did so it
was smashed the very next day. And now, three days
later the entire gain of last Thursday has been obliterated
over the past three gold trading sessions, with today’s
loss alone more than negating Thursday’s advance.
One of the tenets of the $6 Rule is that in the rare
occasion the upper price limits of the rule are breached,
the transgressors are to be immediately punished for
their audacity. Mission accomplished by the bad guys,
which is par for the course.
With the dollar only slightly higher,
gold was taken down hard for no apparent visible reason
in Europe before the Comex opening. The cabal forces
made sure both $400 and the 200-day moving average
were taken out early, which would inhibit new buyers
from stepping up to the plate. All those who bought
the breakout above both key technical points last
Thursday are underwater at this point.
While all the new specs are underwater,
Goldman Sachs has cleaned up and ripped you off again.
This will give you some idea why their corporate trading
profits are so high. All their sales between $402
and $403 are big winners. Once again they have picked
the pockets of the speculators and made them look
like chumps. That is not hard to do when you have
the US Government backing your trades.
There are three basic reasons to continue
to hammer home the details of the gold price manipulation
*This is what the gold market is all
about. The rest of the gold goings-on are of a secondary
nature and a lot of noise.
*This chronology will be very useful to a future Congressional
investigating committee formed to get to the bottom
of the gold scandal, which will only occur after the
"S" hits the financial markets fan.
*There are new Café members all the time who
need to get up to speed as quickly as possible on
what the real deal is at the moment when it comes
to gold and silver.
I yearn for the day when this MIDAS
diatribe about this un-American clandestine price
rigging will not be necessary. We just aren’t
The gold open interest fell 2902 contracts
yesterday to 230,007. It should have dropped sharply
today as The Gold Cartel buried all those who dared
to get long and challenge their perceived arrogant
right to keep gold subdued.
The Working Group on Financial Markets
and The Gold Cartel just do not want gold above $400.
This is the third time in a row they have slammed
it lower from this level. In each case they wasted
little time in taking it down, never allowing bullion
to gain much momentum on the upside.
The two sizeable downside gaps were
ignominiously filled in one cabal trashing.
What is good for the goose is not good
for the gander. Gold went up $8 on Thursday and was
sent right back down. Gold went down $8+ today. Will
it go right back up $8+? Not a chance!
Silver held up fairly well considering
the gold onslaught. All indications are that once
this gold deluge is over regarding the Fed announcement,
silver should begin to make a substantial move higher
The silver open interest rose 857 contracts
Instead of contracting, the Comex silver
warehouse stocks have increased a substantial 1.3
million ounces the past two days, going INTO the July
delivery period. This is strictly a hunch, however,
I think they are being put in there for delivery purposes
because we are going to see large drawdowns as we
get into the latter period of the July delivery process.
Commodity prices have been tagged lately.
Another mad cow scare has affected the meat and grain
markets and crude oil has come down hard from its
$42+ high. The CRB lost another .35 to 267.29 and
is only a couple points above its 200-day moving average.
The last time it bounced off that mark was in September
of 03. Crude oil continues to be drilled, falling
58 cents to $35.66 per barrel.
The dollar closed up .69 to 89.70, while
the euro lost 1.03 to 120.67.
The John Brimelow Report
Reculer pour mieux sauter - a neat tactical
Tuesday, June 29, 2004
Indian ex-duty premiums: AM $3.54, PM
$4.59, with world gold at $399.80 and $396.60. Below,
and virtually at import point. The Indian rupee unhelpfully
softened this afternoon, but the subsequent subsidence
of the gold price in NY will have put India back into
A Reuters story from Singapore reports
lower premiums and some small liquidation from some
Asian markets (sales undertaken with world gold over
$400, presumably). But Tokyo is still reported to
have a 70c premium, the highest in the region, and
a Standard Bank London dealer in Hong Kong is quoted
"I was told (Japan demand) was
cooling down a little, but it is still on the strong
Kilo bar premiums in the Gulf continue
Some commentators report serious selling
by the TOCOM public, but this is not apparent from
the trading data. On volume equal to only 19,711 Comex
lots (22% below yesterday), open interest fell only
the equivalent of 445 Comex; the active contract closed
down 1 yen and world gold was down only 80c from NY.
It was as Europe got under way that pressure intensified.
(NY yesterday traded 45,438 lots; open interest fell
Europe in effect saw a resumption of
the dogged selling which stopped the rally in NY yesterday.
In turn, this was, in reality, a continuation of the
same character of selling which held gold under the
200 day moving average most of last week. ANZ suggests
"…a mixture of suspected
CB selling topside and some hedging by producers continues
to cap the topside."
(Why a hedger would sell to block a
major technical achievement remains mysterious.) The
difference now, of course, is that the trend following
and short- term technical types are very upset: many
writing early this morning predicted the moving average
convergence would hold. The ANZ essay, significantly
"Gold key day reversal –watch
"…selling Spot Gold at 400
risking 407 targeting 390/385."
As a consequence of this damage; they
will not be alone. All in all, a very productive tactical
However, given the posture of the physical
market it seems unlikely that further shorting will
be very remunerative.
CARTEL CAPITULATION WATCH
Yesterday’s stock market reversal
to the downside was stopped dead in its tracks. Target
came out today confirming Wal-Mart’s dismal
retail outlook. US stock market players had the night
to digest the disturbing news from Washington Mutual
as far as how other financial institutions might be
affected by rising interest rates in the months to
come. The terrorists in Iraq went back to work killing
3 more US soldiers. Impact on the market? It rose
as The Working Group on Financial Markets went into
action to stabilize stocks ahead of the Fed’s
announcement tomorrow afternoon. The DOW closed right
where it traded all day long at 10,413, up 56, while
the DOG gained 15 to 2035.
Earlier I noted, “. . . gold was
taken down hard for no apparent visible reason before
the Comex opening.” At 10:00 AM EDT, a reason
became apparent to those previously not in the know:
June 29 (Bloomberg) -- Confidence in
the U.S. economy rose this month to the highest level
in two years, spurred by job growth and a decline
in gasoline prices, a private survey found.
``Some of the concerns about Iraq and terrorism have
taken a back seat to the good news on the economy
and employment,'' said John Shin, an economist at
Lehman Brothers Inc. in New York, before the report.
The New York-based Conference Board's consumer confidence
index increased to 101.9 this month, from a revised
93.1 in May. The figure exceeded the highest estimate
in a Bloomberg News survey. Assessments of both current
and future conditions rose. –END-
As oft-mentioned in this column for
many YEARS, the modus operandi of The Gold Cartel
is to cap, cap, cap gold after a substantial move
higher, turn it back gradually (taking on additional
spec buyers on the quiet break), and then make their
move in dramatic fashion like they did this morning.
With gold already under pressure, they took full advantage
of the consumer confidence news to put the killer
kibosh on all those 12,000 specs who bought the breakout.
Most surely exited the trade today leaving Goldman
Sachs and the rest of the cabal to do some covering.
It is revolting the way they continue
to get away with this!
By the way, the consumer confidence
number is in direct contrast to what GM, Wal-Mart
and Target reported the past couple of days.
To give you a further idea how prevalent
the US market manipulation is, look at what the bonds
did ahead of the Fed announcement tomorrow. After
dipping early, they WENT UP and closed at 105 14/32,
up 18/32. If the consumer confidence number was such
a big deal as to prop up the dollar and bury gold,
why did the bonds rally? Why did the stock market
rally too? Usually a real fear of higher interest
rates sends the stock market lower. They rallied,
of course, because we have a Fed announcement tomorrow
and The Working Group on Financial Markets does not
want them pressured technically ahead of that announcement.
The Working Group On Financial Markets
has cooked its Goldilocks scenario soup to be just
the right temperature for tomorrow.
Houston’s Dan Norcini, a skilled
veteran commodity trader, puts today’s gold
market action in perspective:
How many times do you recall in your trading career
where a market takes out all of its major moving averages
to the upside, not once, but twice, and then proceeds
to promptly collapse? I have seen soybeans in a weather
market have some pretty strange gyrations as the forecast
changed from hour to hour but other than the grains
and an occasional currency or other commodity where
some sort of major incident occurred, you can probably
count the times on one of your hands.
I thought I had seen just about everything
that can happen in markets - guess not....
The gold trashing excuse du jour' is
the consumer confidence number. I don't know about
you but I am sleeping better at night knowing that
people are feeling good enough so as to spend lots
more money they don't have on more imported goods
blowing the current account deficit out even further.
Apparently that sort of thing no longer matters in
today's new paradigm. In the old days, the cure for
a runaway CA deficit was a weaker currency and an
economic slowdown in which consumers retrenched and
began to save instead of spend. Not any more.....
Why save when we can borrow all we need from foreigners?
Some things never change:
Journal of Commerce
Wednesday, January 08, 1992
By: CHRISTOPHER WHALEN
President Bush grudgingly concedes that
the U.S. economy is mired in recession, with stagnating
personal incomes, falling corporate profits, and rising
unemployment. As the stock market races toward new
heights, some gloomy observers still predict even
worse economic times in the months ahead, perhaps
approaching levels of dislocation last seen during
the Great Depression of the 1930s.
Yet away from the TV cameras, Mr. Bush
remains strangely unconcerned. The Dow has rallied
in the last two weeks following the last cut in the
discount rate by the Federal Reserve. The hunting
trip and current Asian visit were not postponed, perhaps
because the president believes official mechanisms
used to ''stabilize" financial markets will keep
the economy stable. Investors will remain calm and
the economy will recover, the president proclaims
privately. Does he know something the rest of us don't?
In fact, maintaining "stability" in financial
markets has been an unwritten national security objective
since the Third World debt crisis began in 1981 and
particularly since the October 1987 stock market crash.
Scandals such as Iran Contra, BCCI and the Iraqi loans
by Banca Nazionale del Lavoro illustrate Washington's
proclivity for behind-the-scenes machinations.
Examine the evidence. Intervention by
the Federal Reserve in the bond and foreign exchange
markets is now accepted as part of the regular routine
of funding the federal deficit. As in the more authoritarian
societies of Europe and Asia, short-term dollar interest
rates are increasingly a function of political rather
than market decisions. Fed moves to push interest
rates to what arguably are negative real rates are
but the most easily discernable examples of the "invisible
hand" at work in the great financial bazaar.
Beyond high profile Fed efforts to lower
interest rates, the government uses other means to
maintain the appearance of stability in the economy.
The Treasury's secret placement of over $1 billion
in taxpayer funds to prop up the doomed Bank of New
England before it failed last January provided a graphic
case in point.
Moreover, since the demise of the New
England bank, several of the largest East and West
coast money center banks have been kept alive through
a combination of deposits from the Treasury, discount
window advances and "off- balance sheet"
loans orchestrated by an increasingly politicized
central bank. In an effort to disguise the full scale
of official assistance to some of the biggest brain-dead
banks, the Fed reportedly avoids high visibility discount
window loans, preferring "indirect" support
by extending verbal ''guarantees" to healthy
banks, which lend to troubled peers - essentially
''off-balance sheet" financing by the central
With institutional investors avoiding
transactions involving certain money center institutions,
even for overnight deals, and little significant funding
support apparent in weekly Fed statements, a combination
of covert Treasury deposits and "indirect"
support from the central bank appears to be the only
way to explain how loss-ridden behemoths such as Chase,
Citicorp and Wells Fargo remain open for business.
Some may be skeptical of claims about
secret government support efforts, but it is important
to recognize that covert loans for brain-dead banks
fit an evolving pattern of behavior within the government
and the Fed.
Based on experiences such as Nugan Hand
in Australia, where the CIA ran a ''bank" as
a front for covert operations, and more recent machinations
involving debt in less developed countries, where
behind-the-scenes manipulation and accounting forbearance
are employed to help certain banks remain open, the
goal of financial market stability has allowed the
basic rules of finance - and some would argue the
law as well - to be broken with impunity.
During 1984-1985, for example, the Federal
Reserve Bank of New York on several occasions asked
futures brokers in Chicago to purchase Canadian dollar
contracts in their own name, but acting on specific
instructions from the Fed. Verbal assurances were
provided by central bank officials, informing them
of impending intervention and thus holding the brokers
safe against possible valuation losses. But no written
confirmations were ever exchanged in this troubling
example of extra-legal government tampering in financial
If we know the government manipulates
currency and money markets, that it keeps dead banks
alive with hidden loans and Treasury deposits, and
that it uses private surrogates to operate in currency
futures, dare we believe that the stability game stops
there? Traders in New York and Chicago suggest the
answer is no, that government tampering in financial
markets extends across the board - even including
the all-important cash equity markets in New York.
Traders and fund managers report mysterious
buyers in stock index futures contracts over the past
three months, on days and at times when cash prices
for stocks were weak and under sustained selling pressure.
Futures market purchases have, in the opinion of suspicious
trading veterans, supported the cash market for stocks
at times when offers badly outnumbered bidders. Such
operations would be easy to finance and execute since
small amounts of capital, deployed skillfully, can
move prices for futures contracts higher in Chicago
- and thereby support cash stock prices in New York.
The Dow is the ultimate thermometer
of Washington's political and economic performance.
Cynics believe the government may be propping up stock
prices. This is a question members of Congress should
ask Mr. Bush. But the question may be answerable only
by annual General Accounting Office audits of the
GATA’s Mike Bolser:
The Fed added $4.25 Billion in tomos today June 29th
2004, an action that caused the repo pool to rise
to $47.27 Billion. This is getting fairly high and
indicates that the Fed wants the DOW to rise as it
makes its FOMC decision public. The moving averages
are very well coordinated and indicate that such a
move will happen probably right after the decision.
As for gold, we see the "don't
go there" message being sent by the Fed today.
Some time ago I warned about the 29th of June and
then refined that warning to the 6th of July. We may
be seeing the results of that warning a bit early
today. I also indicated that any late June attack
would be a brief ambush with a later retreat by a
This counterattack is coordinated to
match the putative Iraq "turnover", a staged
entertainment event (Complete with puppets) if there
ever was one. The Fed pressure on commodities including
oil, is arranged to appear as if "inside traders"
"know" that added supply of oil will be
coming to market and that's why the oil price is falling.
In reality there is no change whatsoever in the bleak
supply picture from Iraq since there is no change
in their security. The pipeline sabotage continues.
The supply picture regarding gold hasn't
changed for the better either. Indeed the Fed still
acts as if they are in a retreat viewing the DIVG.
So today and possibly Thursday and later on July 6th,
may represent extraordinary buying opportunities for
Chuck checked in last evening:
I was out most of the uneventful day,
but the obvious event is the failure of the stock
market to hold onto its gains again. The put-call
ratio continues at a very bearish point. This is usually
a very reliable indicator. The disappointing sales
in both cars and lower end retail are harbingers of
a rapidly slowing economy that can't get its fix from
That was a very enlightening contribution
by the reader who investigated the S and P future
manipulations (which I have called the "invisible
hand." I thank him for something which I have
only observed which rolled again even into today,
and probably tomorrow-a relentlessly higher overnight.
As the scripture warns, "the sin
of the Amorites have reached their full." Given
the shift in the precious metals by the commercials
and the small speculators, we must be nearer than
ever to the inevitable.
I think that like the Old Testament
prophets, many see the event as though it is imminent,
but often the fulfillment took centuries before it
came to pass. Hopefully, this shouldn't take so long,
but I continue to be shocked how long this fraudulent
market can be held up, and "fool most of the
people all of the time." Bob Dylan said that.
This is why I don’t bother to
read any of the normal gold market commentary –
this one I went looking for, knowing full well what
SAN FRANCISCO (CBS.MW) -- Gold futures
dropped almost $9 an ounce Tuesday to close at their
lowest level in nearly two weeks, as an expected increase
in U.S. interest rates dulled investors' interest
in the metal.
The pressure on gold is coming from
the stronger U.S. dollar and expectations that the
Federal Reserve will raise rates at least 25 basis
points, said John Person, head analyst at Infinity
A Conference Board report showing U.S.
consumer confidence at a two-year high fueled a steeper
decline in gold prices, according James Moore, an
analyst at TheBullionDesk.com.
As usual, PRICE ACTION MAKES MARKET
COMMENTARY. What a bore! If this were the real reason
for gold to get clobbered, then why did the bond yields
sink a fair amount and the stock market rally? This
sort of pedestrian drivel has become excruciatingly
inane, unsupported by what other financial markets
The government manipulation of statistics
is completely out of control, even George Orwell might
have had difficulty dreaming up what the nouveau Orwellians
have conjured up:
June 29, 2004: Due to an error in the
way we processed some account transfers, the CFTC
will publish revisions to the Commitments of Traders
reports dated June 22, 2004 for Comex Gold, Comex
Silver, and Comex Copper at 15:30 Eastern Time today.
The MIDAS comment on Friday:
The gold COT report was one of the strangest
I’ve ever seen. The small specs went more short
by the tune of 13,580 contracts, while the Commercials
reduced their longs by 6,414 and shorts by 9,081.
The large specs added 2,806 longs and reduced their
shorts by 7,976. For the small specs to increase their
short positions by so much in one week is close to
unprecedented as far as I can recall.
The CFTC changes just came out:
Instead of increasing their shorts by
a whopping 13,580 contracts, the small gold specs
reduced their shorts by 2,861 contracts. YIKES! What
was a super bullish report, actually was bearish.
Houston’s Dan Norcini elaborates:
Gee whiz Bill there's only a 16,000
difference in the short position in the commercial
short category that got juxtaposed with the short
I simply do not believe what I am seeing
here. How in the hell does that category get confused
with the small specs? What was an amazingly bullish
setup with the huge boatload of small spec shorts
supposedly put on now turns out to be net commercial
selling instead of net commercial buying.
I track the hogs, cattle and bellies
regularly and there were no changes made to those
figures. This is becoming surreal; like something
out of the Twilight Zone. None of the data we are
being fed is worth the paper it is written on anymore.
How in the world is a trader supposed to approach
these markets if we cannot even trust the veracity
of the data we are getting. It is like flying in thick
fog with uncalibrated instruments. You can't trust
I am too disgusted to even say anything
else at this point.
It gets worse, Dan.
This is a note GATA’s Ed Steer
sent me early Friday evening (June 25, 2004):
Ted Butler has advised me that the COT
has some errors this week. Here's his message to me.
"It's kind of surprising that no
one seems to have caught it, but the COTs had a big
clerical error in gold, silver and copper this week.
They screwed up the commercial short position with
the small spec short position.
No biggee, they're still OK, but there's no way this
week's report is as good as reported.
Now, wait just a minute. If Ted Butler could spot
errors in the CFTC report IMMEDIATELY, why did it
take three days for the CFTC to correct their errors?
Why weren't these numbers corrected before the Comex
opening on Monday morning? Why did they let unsuspecting
gold specs stay unnecessarily long the past two days
while The Gold Cartel cleaned their clocks? Why did
they wait to put this out going right into this so-called
all important Fed announcement? Nothing less than
a full scale investigation of the CFTC is required.
No wonder Dr. Michael Gorham, the Director of Oversight
for the CFTC, resigned recently. Jeff Newsome, CFTC
Chairman, should be excoriated on this one.
Here is a question for you:
What do you think the SEC would do to a US firm who
purposely withheld information from the public for
two full trading days during which they lost hundreds
of millions of dollars?
Ted Butler’s email to Ed Steer last Friday has
been forwarded to Chris Powell and GATA’s other
two Board members (Mike Bolser and Catherine Austin
Fitts) for safe keeping as evidence the CFTC has clearly
conspired with The Gold Cartel to defraud the small
investor in America.
A couple of emails from fellow Café
members on the increasingly disgusting and cowardly
One thing is clear: the bankster cabal absolutely
hates gold and silver because they are DEATHLY AFRAID
of it in the hands of the people. And right now it
can be surmised that they are serially soiling their
drawers, given the heavy-handedness of today's and
recent "interventions." So, if they are
this desperate and petrified of the precious metals
that they must cowardly hammer the market before Bubbles
Magoo appears to bless this economic mess, then this
clearly confirms that this sector is THE place to
be. I can afford to be patient until their phony paper
house of cards collapses and burns, boldly going where
the cabal fears us to tread. Time IS on our side;
they must labor increasingly harder to effect the
diminishing returns of their corruptive influence,
while we wait for the fruits of sound investment to
inevitably fall into our hands. Gold and silver will
abide longer than these dastardly scoundels.
Hi Bill !
Gee, if I didn't know better- i.e. that all our markets
are free and totally driven by market forces - I'd
have to think that gold is being soundly thrashed
over the last few days in anticipation of an ineffectual
25 bps rate increase that will not make much of a
dent in inflation.....I mean, why let it [gold] exist
as an attractive alternative to real negative rates
and an overvalued stock market?
Coeur d'Alene raises Wheaton offer
Move comes as Golden Star sweetens Iamgold bid
Yesterday’s key reversal to the
downside on the HUI proved prescient today at that
index fell another 4.74 to 185.36. The XAU lost 1.43
It is no surprise at all The Gold Cartel
would bash gold ahead of the Fed announcement tomorrow.
By continuing to cream all gold rallies, they are
sending more and more investors away from the gold
and silver shares, which is one of their main objectives.
More and more individuals can’t take the action
and are fleeing, in similar fashion as the private
contractors in the Mid East are fleeing in fear of
Mahendra said it best last week. Spend
some time with friends this week. Go to the beach.
Don’t let developments bum you out and get you
out of your long-term share positions. It won’t
be long before they are flying again. This is a week
to be endured.
He's correct. Think long-term and understand
what is happening near-term.
GATA BE IN IT TO WIN IT!
More on the US financial market/reporting
nightmare that has grown to one of epic proportions:
MYSTERY BEHIND LATE RELEASE OF PPI
By JOHN CRUDELE
June 29, 2004 -- ONLY a dedicated cynic
and a devout pain like me probably would bring this
up, but how can the U.S. Labor Department expect people
to believe statistics like the producer price index
if the number is saturated in mystery?
The Labor Department's Bureau of Labor
Statistics delayed release of the wholesale inflation
number the PPI by half a week recently
because, according to a press release, it needed to
"resolve unexpected difficulties in calculating
A government agency doesn't produce
a very important economic statistic on a timely basis
and that's their best explanation?
This is the same economic series that
was delayed for months in early 2004. And it's a number
that will prove important when the Federal Reserve
meets today and tomorrow to decide if interest rates
should be raised.
Keep in mind that billions of dollars
are wagered each day on whether inflation is increasing
or falling. And remember that the PPI is one of the
most visible gauges of this watched all over
Not only is the number important to
the Fed, but it's also key to the presidential election
if only because it can change the economy by forcing
financial markets to make borrowing costs more expensive.
"The BLS expresses its apologies
to those who experience any problems as a result of
this delay," the Labor Department said on its
When the PPI was finally released it
showed an increase of 0.8 percent in May, the biggest
jump since March 2003. If you take out food and energy
prices the increase was 0.3 percent.
That the media didn't seem to care about
this delay was as astounding as the government's ineptitude.
So let me be one voice of indignation.
(Pound fist on desk) We need to know
what's going on!
I called the Labor Department between
the time the PPI was delayed and its eventual release.
I got a little fuller explanation but one that was
still completely unacceptable.
Brian Catron, a BLS economist who works
on the PPI data, says the number was delayed because
"there was a calculation issue."
What exactly does that mean? Does Catron
mean that the PPI's jump, as originally calculated,
was too large for the financial markets to handle?
"You are implying that we are manipulating
the number," Catron shot back when I asked. "I'm
not going to dignify that with a response."
OK, don't respond. I'm still wondering
if that was the case.
But here are some other things you might
want to know.
Catron assured me that the "mistake"
that caused the PPI's delay had to do with the quality
of the data that were provided by manufacturers.
And he contended that Labor Department
higher-ups had not seen the original number before
it was pulled, so only lowly bureaucrats decided to
rejigger the data.
The raw data, Catron told me days before
the PPI finally came out, didn't pass a quality assurance
test. Prices as they stood on the day they were
originally supposed to be released just weren't
"appropriate" for public viewing.
A little editing and they apparently
become appropriate. Which makes me wonder: shouldn't
someone be keeping an eye on the stat-amagicians?
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