Some day again and a tale of two differently timed daily commentaries from me for this MIDAS. Some early notes after the first hour or so of Comex trading:

Every time I think the manipulation of the gold price by the heinous Gold Cartel cannot get any more obvious, it does.

Going into the opening on the Comex and the announcement of the employment report, gold was slightly lower. The dollar was a bit stronger, but oil was flying at $34.50 per barrel. Besides, gold didn’t follow the weak dollar yesterday as the price-cappers went into action when gold approached $425, knocking it lower.

As we neared the Comex opening, gold began to weaken from down 50 cents to a call of $1.30 lower. Then, it opened a whopping $2.70 lower thanks to Goldman Sachs. My first thought was, "Uh, Oh – something’s up – the Gold Cartel is petrified of gold shooting past $425." The Working Group on Financial Markets/Gold Cartel surely knew what the jobs report would reveal and probably was going into pre-emptive mode to prevent a gold price explosion. They wanted to set the tone for the gold price as far as traders were concerned. $2.70 is a big hole to crawl out of. Traders saw what happened yesterday when gold did crawl out of a big hole on the Trichet news, only to be slammed $3 off its rallying high of $426 per ounce.

Sure enough, the jobs report was horrendous. Bonds flew, stocks sank, the dollar was crushed against the euro. Gold? It managed to struggle back to unchanged/plus 30 cents.

Before you knew it, Goldman Sachs and Morgan Stanley went after bullion in a mega way knocking it back down $3, even though the dollar was battered vis-à-vis the euro.

Silver dipped briefly, but then began to rise steadily. Gold gradually began to poke its head up and was dragged along for the ride to the consternation of The Gold Cartel. What did I mention yesterday about "the best laid plans?"….

That commentary was written before I left my abode for 45 minutes in total disgust. By day’s end I had lightened up, but was still perturbed by the blatant illegal gold price-capping by Goldman Sachs, Morgan Stanley and the rest of the cabal.

I also mentioned yesterday that it doesn’t get much better than this as far as the gold fundamentals are concerned. But they did so today. Commodity prices moved higher, led by crude oil ($34.31, up 33 cents). The CRB closed at 267.83, up another 1.62 – a new 15 year high. The dollar was belted against most currencies, finishing the day down .49 to 83.59. The euro rose .84 to 128.23. The DOW was hit hard late. And, the pitiful US jobs growth number means the Fed is not going to raise short-term US interest rates anytime soon.

The incredible gold set-up not withstanding, The Gold Cartel clearly has a mandate to do all they can to keep gold from blowing through the $425/$430 level, regardless of what outside market action would normally dictate.

The essential question we need answered is the same question MIDAS/GATA has posed for years. Will they get blown out of the water? Are they running out of enough physical gold to keep the price from exploding? My answer to both questions is yes (as it has been for a long time), but the exact timing is extremely difficult. We are talking about the most powerful financial market people in the history of the world getting their butts kicked, their clocks cleaned. The good news is this is exactly what is happening (and has been all year), just VERY gradually.

What has happened these past many months is the corrupt ones keep making a stand at various price levels. However, the physical market is so strong, they are continually forced to retreat. Meanwhile, The Gold Cartel losses continue to mount to staggering levels.

While we know The Gold Cartel was instrumental in rigging the price of silver for many years, mostly to deflect attention from their rigging of the gold price, we never had the goods on them for the silver price manipulation like we did in bullion. Today was a good example of why they did what they did to silver the past 7 years. As silver took off, the gold traders became more aggressive. Without silver today, gold might have closed down $3.

This recent stunning move in silver is a sign the cabal has lost control of this aspect of their fraudulent operations. It may mean losing control of the gold price is right around the corner. Ever since I reported to Café members that the entire "feel" of silver trading had changed, silver has moved almost straight up. Every since I reported the "Buffet buying" and "squeeze talk," silver has moved sharply higher. From 25 years worth of experience at this game, RARELY, if ever, is one privy to incredible information like this. Not BEFORE a move!

The same is true with my "STALKER" information. With gold about $340/$350, I mentioned the gold trading had an entirely different feel, just like silver has had more recently. Then I heard about THE STALKER buying $6.8 billion worth of gold and bullion has never looked back since. Between this buying and that of the Indians, foreign governments, etc., The Gold Cartel continues to backpedal. They are being quietly overpowered as the physical market gains strength and competing bids rise.

The gold open interest rose a staggering 17,327 contracts yesterday to 302,077, a new record. This is stunning and tells you how much selling firepower was used by The Gold Cartel to keep gold from soaring as the dollar was rocked on the Trichet news. It also tells us how much buying firepower has entered the gold arena.

Supposedly it was all fund buying today. It may be, but I am sure it is much more than just your usual funds. There is large non-US money buying gold. We are talking about countries, hedge funds, etc.,- probably various bullion dealers too who need to price cash orders in the futures market. Some of the so-called fund buying is just a front for this more substantial buying. I say more substantial because this gold is not coming back on a price dip. It is not black-box selling which will easily emerge on an unraveling technical signal. Many of these buyers want the gold. This has been going on for some time, which is why The Gold Cartel has not been able to turn other large tech specs into sellers for eons.

By day’s end, silver soared, falling two cents shy of pivotal $6.50 and notched a new 5 ½ year high. Gold managed to close above key $425 resistance and at a new 15-year high close.

Once again gold support held at $420 as $420.30 was today’s low.

The silver open interest rose 3195 contracts to 110,752. The floor is talking about $8 silver, especially since March silver printed $6.50 today. While Morgan Stanley was bombing gold all day, they were nowhere to be seen in the silver pit.

GATA's Ed Steer appears to have nailed the reason why silver soared today and why the Comex suddenly raised the margin requirements:

Bill, here it is again (resend from last night). I checked the NYMEX inventories tonight, and it is now officially correct. No 'ifs' attached to this at all. It's a done deal.

http://www.nymex.com/jsp/markets/sil_fut_wareho.jsp

I wonder if this could be the reason that the margin requirements were changed on silver. If this figure from NYMEX is correct, then there were 12.4 million ounces switched from the 'registered' category to the 'eligible' category....i.e. from the 'for sale' pile to the bought and paid for 'not for sale' pile. This is a huge 20% shift in both categories...one up, one down.

It looks to me like someone made a grab for a big chunk of what little remained of the dwindling NYMEX silver stock pile, and 'the boys' changed the margin requirements in anticipation of what might follow this event once it became public knowledge.

If these figures are true...and not revised today (they were not) ...then things might get real interesting real quick in the silver market...as I now notice that the silver price headed north the moment the Far East closed (early this morning). Ed

This fits right into the MIDAS information sent your way recently about Warren Buffett, who is getting ready to squeeze silver.

It is not hard to realize why investors all over the world would not want to pour into gold and silver:

• Our dollar is headed for oblivion.

• Commodity prices are soaring.

• The Iraq War is a mess.

• The US economy is not doing well as depicted by the very disappointing job numbers.

• The US budget and trade deficits are horror shows.

• The US stock market is WAY overpriced.

I could go on and on. While we have roaring bull markets in the US, silver and gold have gone nowhere in many other currency terms. They are still cheap and great bargains. Many investors don’t like what they see in the world financial arena and don’t believe stock prices will advance much further, nor do they think interest rates will stay low down the road. Bonds could be hit very hard as the year goes on. These big league investors see a rush into gold and silver coming and want in, realizing both silver and gold will take off in their own currency terms as 2004 progresses.

Then, of course, is the most important issue of all. The price of gold/silver has been artificially suppressed for many years. As we know, The Gold Cartel is still throwing money away at gold in attempts to keep it from exploding. Many foreigners also realize half the central bank gold is GONE, used up in the fraudulent price-capping scheme. This means only 16,000 tonnes is left, not the 32,000 commonly quoted. Much of that 16,000 tonnes is unavailable. Throw in a 1400/1700 yearly supply/demand deficit, which means what little is still available is consistently being eaten up.

GATA’s revelations are heeded all over the world, except in the United States because we have no free press. The prices of gold and silver are going to go bonkers as a result of the short-sighted stupidity of The Gold Cartel and friends. GATA’s findings are circulating and this is helping to propel the price of gold to the upside. These new significant players realize the cabal doesn’t have the ammo to stop a big price rise.

Gold daily
http://futures.tradingcharts.com/chart/GD/24

Gold weekly
http://futures.tradingcharts.com/chart/GD/W

Silver
http://futures.tradingcharts.com/chart/SV/34

CRB
http://futures.tradingcharts.com/chart/RB/14

Fun MIDAS flashback:

December 19 - Gold $408.70 down $1.20 - Silver $5.70 up 2 cents
Silver Makes Multi-Year New High Close, Geared to Rocket

....Silver and gold have diverged the past couple of days. While gold has drifted down, silver has come back from a couple of bashings to close higher. It looks to me like both are getting to really ROAR in the weeks ahead.

© 2004 Bill Murphy
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