Forum: Edelmetalen » Goud en zilver Rockin & Rollin

[verwijderd] 24 augustus 2004 11:30

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INTERVIEW: High Prices May Not Affect Indian Gold Demand

Tuesday August 24, 3:33 PM
By M. V. Ramsurya
Of DOW JONES NEWSWIRES

MUMBAI (Dow Jones)--The forthcoming festival season and an improved monsoon is likely to keep demand for gold strong in India despite sharply rising prices, said a senior industry executive.

"Although gold prices have been surging, the demand for the metal will continue to remain firm," Bombay Bullion Association President Suresh Hundia told Dow Jones Newswires in a recent interview. "The festival season is just starting and we also anticipate good demand from marriages."

Spot gold is currently quoted around $410 an ounce.

Hundia said although the monsoon looked weak until July, "it has more than made up since August. This will boost rural incomes and increase gold purchases."

The rural sector accounts for almost 60% of India's total gold consumption, most of it in the form of jewelry. Indian households are estimated to stock about 14,000 tons of gold.

The Indian Meteorological Department recently said that although monsoon rains in the June 1-Aug. 18 period were 7% below normal, they have been normal or excessive in 28 of the 36 regions, while only eight regions had deficient rains.

Hundia said he expects gold prices to remain firm due to high crude prices. "I expect gold prices to go up to about $418 an ounce by the end of this week," he said.

Crude prices are expected to climb further on fears of an imminent showdown between U.S. forces and militants loyal to radical Shiite cleric Muqtada al-Sadr in Iraq which may further affect oil production there. Benchmark U.S. October crude futures are now at $45.88 a barrel.

"If (gold) prices go beyond $418, we may see a marginal fall in demand," said Hundia, adding that until then India's reliance on imports would continue.

Annual gold production in India is only nine tons. The country meets almost two-thirds of its 600-ton demand through imports, while recycled scrap fills the remaining gap.

"Although local production is picking up, we still have a long way to go," said Hundia. With more companies showing interest in exploration, gold production rose to 1.45 tons in the April-May period, from 1.24 tons a year ago.

According to U.K.-based research agency Gold Fields Mineral Services, Indian demand for gold in the fiscal first quarter grew 25% on year to 149 tons.

In 2003, gold demand in India rose 3% from the previous year to 588 tons.

India is home to about 300,000 gold jewelry outlets and has 2 million goldsmiths and related workers.

[verwijderd] 24 augustus 2004 16:34

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Sprott Asset Management Inc. Publishes Gold Manipulation Study
TORONTO--(BUSINESS WIRE)--Aug. 24, 2004--Sprott Asset Management Inc. announced today the publication of Not Free, Not Fair: The Long-Term Manipulation of the Gold Price.
The study represents the most thorough and detailed examination of allegations that the gold market has been subjected to severe price manipulation over the past several years.
Commenting on the landmark report, John Embry, Chief Investment Strategist, stated: "We, at Sprott Asset Management, have felt for some time that the gold price has not remotely reflected its true underlying fundamentals. In response, we have conducted a comprehensive study of available information on the subject and have concluded that the evidence strongly supports those who believe that the gold price has been and continues to be suppressed.
Het rapport is te lezen via de link: www.sprottassetmanagement.com/pdf/not...

[verwijderd] 25 augustus 2004 11:53

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Gold conspiracy gets mainstream kicker
Tim Wood
'24-AUG-04 20:00'
icms.iac.iafrica.com/pls/cms/iac.page...

NEW YORK (Mineweb.com) -- John Embry, chief investment strategist of Toronto based Sprott Asset Management, on Tuesday published a gold conspiracy compendium that he believes provides nearly irrefutable evidence of a global gold price suppression scheme.

In a covering note to clients, Embry and co-author, Andrew Hepburn, explain that anecdotal evidence such as “counterintuitive price action” is one indicator pointing to a gold market that is “not free” based on a decade of evidence. The report says initially disconnected activity by powerful gold market players has essentially synchronized. “A potentially highly dangerous situation developed which now requires expedient collaboration to stave off the inevitable bad ending.”

Interviewee: John Embry,
Chief Investment Strategist,
Sprott Asset Management.
Topic: Gold price suppression scheme.
Interviewer: Tim Wood, Mineweb.com.
Date: Tuesday, 24 August 2004.
Length: 14 minutes, 31 seconds.
Streaming: Click to listen

The report says the market manipulation hurts all gold investors, but its true victims are communities that depend on gold mining. It says the beneficiaries are central banks intent on camouflaging “increasingly reckless monetary policies”, whilst financial institutions are profiting by gulling investors who think the gold market is free.

Whilst previously employed by RBC Asset Management, Embry issued a brief that was closely aligned with the position of the Gold Anti-Trust Action Committee (Gata). RBC repudiated the June 2002 report almost immediately, telling investors that it was meant for internal consumption only.

Sources blamed the hasty repudiation on Gata chairman, Bill Murphy, for distributing the report without RBC’s and Embry’s permission. Murphy told Mineweb that he had merely passed on a document forwarded to him by an RBC private client. “As far as I was concerned, it was a public document that drew largely from specifics in Gata’s own published research,” Murphy said at the time.

The wheel has since turned. Embry parted ways with RBC, joining Sprott in March 2003 which has been an aggressive gold bull for some time. Ironically, just days before Embry’s original report hit the Internet, Eric Sprott of the eponymous investment firm issued a public retraction about Barrick’s [ABX] vulnerability to rising gold prices because of its hedge book.

Entitled: Not Free, Not Fair: The long term manipulation of the gold price, the report runs to 63 pages. It is notable that whilst Gata is acknowledged, Murphy receives no direct recognition although his name litters the footnotes. The primary sources are listed as Frank Veneroso, Reg Howe, Michael Bolser and James Turk, all of whom are in the Gata camp.

In a nutshell

Even though the gold price has risen some $150 per ounce since it bottomed in 2001, the report says market manipulation has capped those gains. Only when the claimed manipulation is ended, by intervention or accident, will gold soar to an equilibrium value which is seen as a four-digit number.

The report dates the gold price suppression conspiracy to the rescue of Long-Term Capital Management in 1998, thereafter commencing “in earnest after the post-Washington Agreement gold price explosion in 1999.”

It is alleged that the 1999 blow up which crippled Ashanti, since acquired by AngloGold [AU], and Cambior [CBJ], unmasked a gold carry trade run amok.

Having borrowed gold nearly limitlessly to sell forward and invest the proceeds in higher interest bearing instruments, the parties and their de facto insurers, central banks, realized that the positions could not be easily unwound. LTCM’s apparent gold short position of 300-400 tonnes, which is equivalent to nearly a whole year of South African new mine production, could not have been settled without causing a run on the gold price that might have triggered a collapse of the financial system.

The belief is that central banks and the primary financial institutions agreed on a scheme to manage down or conceal the risks without causing a panic. As part of this arrangement, the Bank of England agreed, on behalf of the UK Treasury, to sell a large quantity of gold through a series of bizarrely structured auctions.

Apparently aiding and abetting the Brits were the super-secretive US Exchange Stabilization Fund and the Federal Reserve. The IMF also provided cover by allowing governments to misreport the status of gold reserves and gold swaps.

Not Free, Not Fair repeatedly rejects the statistical compilations of GFMS Limited and other “consensus statisticians” such as Jessica Cross. It cites the work of Frank Veneroso as more reliable. “Given Veneroso’s more reliable numbers, we also believe total gold loans to be on the order of 10,000-16,000 tonnes. By contrast, GFMS only reports approximately 4,000 tonnes of total central bank liquidity in the market,” the report says. The Veneroso number suggests that central bank vaults are “one-third to one-half empty” of their reported gold.

Gold producer executives have generally shied away from endorsing a conspiracy theory. This is primarily because of the association with Gata’s Bill Murphy, a former commodities trader, was fined and expelled by the CFTC over allegations of copper market rigging. He is also prone to incendiary statements and imprudent foretelling that have made a pariah of the activist organization in reasoned company. However, Embry and Hepburn say there is a “greater inclination [among executives] toward the manipulation hypothesis than most market observers may realize.”

Embry and Hepburn also agree that global gold derivative figures contrasted with net producer dehedging indicate that central banks continue to lend their gold so that the associated carry trade dwarfs mine hedging.

Conclusions

Not Free, Not Fair concludes that there can be no other explanation for the apparently erratic behaviour of gold but “severe long-term manipulation.”

“We find troubling the consistent unwillingness by mainstream gold analysts to debate, or even acknowledge, the manipulation viewpoint in any depth. Such market watchers pretend, not convincingly, that the people marshalling the price management thesis do not possess either the knowledge or research with which to make a strong case for price-fixing in the gold market,” the authors write.

They are confident that when the scheme unravels, as it would have to, the gold price will explode. “Until then, we urge the news media, gold industry and relevant arms of government to further investigate and expose what appears to be price-fixing on a scale of truly epic proportions.”

[verwijderd] 27 augustus 2004 01:11

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In this morning from Michel de Chabert-Ostland, formerly a highly regarded New York hedge fund manager for many years and one who worked with some of the most visible firms in the city before moving on to Florida:

I took 2 1/2 hours Tuesday evening to read the Sprott report on the Long Term Manipulation of the Gold Price. My conclusions:

1. Considering the difficulty of the subject and access to information, this is, without doubt, one of the finest reports that I have ever read on any market in my trading life. It is footnoted and referenced at great length on all pertinent facts and stipulations that it states. Like great scientists, its authors INFER/DERIVE conclusions based on the accumulated observations and facts known.

2. As the authors acknowledge, much credit is due to the research work done by GATA and its staff of contributors and I tip my hat, no I BOW to them, for their perseverance and diligence over many years to accumulate the necessary evidence for Sprott's conclusions.

3. Anyone seriously contesting the merits of Sprott's report will have to do so with FACTS. If they are quoting any serious participant in the gold market, they will have to analyze the truth or possible deception of any such statement. Sprott has laid down the gauntlet and any party wishing to refute its conclusions ,and be taken seriously, MUST DO SO IN THE SAME DILIGENT MANNER AS THE SPROTT REPORT. The article by the Canadian journalist mentioned on the GATA site yesterday failed to do so miserably and is not worth the paper it is written on.

4. I believe strongly that the Sprott Report is a MAJOR TURNING POINT for the gold market and I added considerably to my long futures positions after reading the report on Tuesday night. I will explain why I believe so in a posting over the next 48 hours when I have more time.

5. The gold technicals are potentially super bullish. I will go into details over the next 48 hours but for now keep an eye on the 50DMA ( currently 398.79 ) which looks poised to cross over the 200DMA ( currently 401.73 ) on a small upward move in the gold price ( I use cash gold charts ). Could this happen while the major players of the WESTERN WORLD are sunning themselves for the last few days of summer ? It wouldn't be the first time that a market makes a very important move while the trading desks are on half staff.

KUDOS TO GATA AND SPROTT

Michel de Chabert-Ostland, CEO
royalpalmtrading@adelphia.net

[verwijderd] 28 augustus 2004 19:36

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Hier een zeer interessant artikel mbt Goud & $

The first essay, "Fiat's Reprieve: Saving the System, 1979-1987, can be read at www.goldensextant.com/SavingtheSystem... This comprehensive study by Robert Landis explains how the dollar as fiat currency has managed to endure, contrary to the historical experience of fiat currencies and the predictions of doom by sound money advocates

[verwijderd] 30 augustus 2004 14:53

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Never mind gold's price, look at volume

By John Brimelow
CBSMarketWatch.com
Monday, August 30, 2004

cbs.marketwatch.com/news/story.asp?gu...
2D487B%2D8131%2D45FDE3802A2F%7D&siteid=mktw

NEW YORK -- Gold is back above $400 (again). Last week
it seemed to stall (again). But look below the surface.

Peering closely, I see three factors at work:

First, India, the world's biggest gold importer, was
unfalteringly a buyer right up to the high of $412 this past
week. I gauge Indian off-take by looking at the local
premiums.

Previously, Indian buying has been choked off at these
levels. And the busy season for gold purchases in India
is only just beginning.

Inevitable outcome: A great deal of metal will go to live
in India this fall -- unless world gold moves up sharply
from the $400-plus level.

Second, the Middle East also appears to have become
gold-hungry. It's more difficult to follow, but those local
premiums I can access have started to suggest this.

So do recent reports of quantities traded. Turkey, for
instance, imported a record weight of gold in July.

Conclusion: The physical demand for gold is
ratcheting up to support the price.

Thirdly, and below the surface, the past two weeks
have seen extraordinary increases in Comex (New
York Commodities Exchange) open interest, which
have accompanied gold price recent moves.

"Open interest" is the total of futures contracts
outstanding. An increase occurs when a buyer bids
to acquire a contract -- a promise to deliver -- and is
accommodated by a new seller. Or when a short
seller is accommodated by a new buyer.

Since Aug. 12 open interest has gone up 24.6 percent,
54,749 contracts, equivalent to 170 tonnes of net gold
buying. This includes one day, Aug. 19, where the rise
was apparently the second highest on record.

In other words, gold volume has been huge. It's just the
price that has been boring.

The surge in open interest tells us good and bad news.
Good: Huge buyers have appeared. Bad: So has a huge
seller(s).

Who are the buyers? The most popular theory among
gold bears: a big mining house trying to eliminate a
hedge position.

I think this is unlikely. No one producer is big enough.

My guess: Some U.S. hedge funds are buying gold
because they think the geopolitical/economic is
unstable. So are large operators from elsewhere, partly
responding to the same anti-American sentiment that is
driving the retail Middle Eastern markets.

Next question: Who is the seller? After all, someone
has to have taken the other side of the trades.

To me, it has to have been a central bank. There is
simply no other long (or short) around with this kind of
size, or courage.

There is increasing evidence that the gold market is
being manages by the official sector. Imperative reading
for serious gold followers is money manager John Embry's
discussion of gold manipulation at Sprott.com.

Ultimately, central bank supplies will be exhausted.
Refco Research, the adroit Chicago-based traders, bravely
went long on Friday, reasoning that selling of this
magnitude cannot persist.

Gold's price breakthrough will be fortune-making. In the
meantime, a modest rise to a level which will temporarily
slow physical buying is very likely.

If gold passes its $431 March high, it will be at a level
not seen since the mid-1980s.

----------

John Brimelow, based in New York, has been a precious
metals analyst for more than 20 years. He also is the
brother of CBS MarketWatch columnist Peter Brimelow.

[verwijderd] 31 augustus 2004 08:19

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Sons Of Gwalia De-Hedging Already Started, Analysts Say

By Gavin McGuire
Dow Jones Newswires
Monday, August 30, 2004

www.thebulliondesk.com/NewsProvider.a...

NEW YORK -- The voluntary fall into administration by
Australia's second-largest gold miner, Sons of Gwalia
Ltd., has prompted gold-market watchers to speculate
that the miner's 81-metric-ton, or around 2.6-million-
ounce, hedge position has been in the process of being
unwound over the past week.

The Perth-based company said Monday that it appointed
voluntary administrators over the weekend after identifying
a "serious deterioration" in the status of its gold reserves,
which meant the company lacked the resources to meet
its hedge book commitments.

Gold dealers agreed that the company's bankers likely will
have pushed for a squaring of holdings ahead of bankruptcy
filings, which would have included an unwinding of its hedge
book.

Last week market participants reported regular spurts of gold
buying through several investment banks that market
participants say may well have been intermediaries of Sons
of Gwalia unwinding the company's hedge exposure.

"You'd have to hope that the management was smart enough
to unwind the hedge before going into bankruptcy, and
certainly its bankers would have pushed for that to happen,"
said the head of precious metals trading at a New York-based
European investment bank who declined to speak on the
record.
Tim Gardiner, head of precious metals trading at Mitsui
Precious Metals Ltd in New York, agreed. "I'd assume most
of it has already been done by now. The numbers (of ounces)
we saw being bought last week add up to around the amount
Gwalia is talking about," he said.
However, other market observers have stressed that the
company may not have been able to successfully complete
all those purchases and that further de-hedging may be yet
to come.
Further, one metals and mining analyst observed that part of
the company's hedge structure was "toxic" in that it increased
in exposure as prices rose, thereby making it very difficult to
unwind completely within a short period.
To make matters potentially worse, with the Republican
National Convention taking place this week in New York City,
heightened terrorism concerns have made active sellers of
gold likely to remain fairly scarce this week.
"If they have a lot of buying still to so, it could be painful for
them this week as the market is quieter than usual this
week, anyway, with holidays in London and the United
States, and the convention in New York adds a terrorism
threat as well," said the European investment bank dealer.

Sons of Gwalia officials could not be reached for comment.

[verwijderd] 1 september 2004 08:38

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Launch of StreetTRACKS Gold Shares at NYSE Awaited

www.reuters.com/newsArticle.jhtml?typ...

NEW YORK, Aug. 31 (Reuters) -- Gold-backed securities
known as streetTRACKS could soon start trading on the
New York Stock Exchange, according to a statement
posted Monday on the Securities and Exchange
Commission's Web site. The previously unnamed equity
trust, sponsored by the World Gold Council, is designed
as an alternative to investing in physical gold, which
is difficult and expensive for nonprofessional to move,
store, and insure.

The NYSE and the World Gold Council, which filed the
amended registration with the SEC, said they are
forbidden to comment during the process. The
registration was initially filed in May 2003.

The prospectus document, which can be found on
www.sec.gov and is subject to further amendment,
indicates it will be launched in 2004 "as soon as
practicable after this registration statement becomes
effective."

Financial markets have been anticipating its debut, and
rumors have circulated among gold traders and analysts
in recent weeks that a launch was imminent.

The New York securities are similar to Gold Bullion
Securities Ltd., which started trading on the London
Stock Exchange in December 2003.

The U.S. version has registered 60,400,000 shares, each
representing ownership in 1/10 ounce of gold, according to
the prospectus. Share prices, which will trade under the
ticker symbol GLD, will be determined by the spot price
of gold at the time they are sold to the market.

The actual gold will be warehoused by the custodian,
HSBC Bank USA. The trust will be administered by The
Bank of New York.

The gold industry has looked to exchange traded funds
to sustain investor interest in gold, which reached its
highest price in 15 years five months ago near $430 an
ounce, about $20 above the current price at $409.25.

Exchange traded funds offer the small investor the ability
to play in gold, without handling the physical asset.
Investors can also buy shares in gold companies but
may be discouraged by the financial nuances of the
mining industry and by influences on stock prices that
may not be related to the underlying value of gold.

San Francisco-based Barclays Global Investors, N.A.,
also filed a registration with the SEC this year for iShares
COMEX Gold Trust, which will mimic the price of gold
futures at the COMEX division of the New York Mercantile
Exchange.

[verwijderd] 4 september 2004 10:03

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Central Banks may sell less gold than planned

Interesssant UBS rapport.
www.lemetropolecafe.com/img2004/gold0...

[verwijderd] 4 september 2004 10:31

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Bedankt, mooi up-to-date.
Het komt van het Zwitserse UBS. Nu is er toevallig in de CH een discussie gaande mbt vrij grote geplande goudeverkopen door Zwitserse overheid. Daar lees ik niets over.

Groet

[verwijderd] 5 september 2004 21:52

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Newmont Sees Gold Range
of $380-$450 in Year Ahead

By Lewa Pardomuan
Reuters
Monday, September 6, 2004

www.reuters.com/newsArticle.jhtml?typ...

SHANGHAI -- Newmont Mining Corp., the world's
largest gold miner, expects gold to trade in a range
of $380 to $450 an ounce for the next 12 months
and possibly higher because of a poor outlook for
the dollar and the U.S. economy, said its president,
Pierre Lassonde.

The Denver-based company expected more gold
firms that hedged their output to declare bankruptcy
as gold prices rose, he added.

"Gold hedge books are real liabilities that will
continue to grow and likely sink more gold
companies. Newmont has a clear policy of
non-hedging and we remain committed to it,"
Lassonde told Reuters by e-mail.

Last week Australian mining house Sons of
Gwalia Ltd said it faced bankruptcy after
discovering its mines might not have enough
gold left to meet its gold hedge commitments
and finance its foreign exchange exposures.

As gold prices have surged 60 percent from
around $250 an ounce in early 2001 to around
$400 an ounce, many producers have tried to
unwind contracts they made to sell gold at
prices set much lower than the market.

"With the gold price rising, I expect more
companies will declare bankruptcy as the
liabilities associated with their hedge books
continue to rise. For the next 12 months we
see gold trading in the $380 to $450 range.

"Should the U.S. economic situation deteriorate
more rapidly than we have forecast, it could push
the U.S. dollar down and propel the gold price up
sharply, possibly above that band," he said.

Spot gold was quoted at $400.15/400.90 an ounce
on Friday, versus $405.80/406.00 on Thursday.

"We are bullish on gold for the same reasons that
we are bearish on the U.S. dollar: very large and
increasing current account deficits, trade deficits,
and a huge swing in the budget from a surplus of
$200 billion to minus $500 billion in less than three
years," Lassonde said.

"History may be repeating itself. As in the 1970s,
we experienced a nine-year bull market in gold due
to a paradigm shift in the price of gold in its cost of
production," he said.

Over the ensuing 20 years, he said, the gold price
increased to an average of $350 an ounce from $35
while production cost rose to approximately $250
an ounce from $20.

"At this time, we don't know when the gold price or
costs of production will stabilise. But it's fair to say
that such uncertainty is another reason why we
believe gold hedging is a risky proposition for
shareholders," said Lassonde.

Hedging, the selling of yet-to-be-mined nuggets at
a preset price to lock in revenue, began falling out
of favour as gold prices rose. Hedging protects
miners when prices fall, but can backfire when
prices increase.

Newmont is virtually free of hedges after closing out
about 10 million ounces of hedges since taking over
Australia's Normandy Mining Ltd. and Canada's
Franco-Nevada Mining Corp in 2002.

"We remain steadfast in our commitment to keeping
all of our gold production hedge-free going forward,"
said Lassonde.

[verwijderd] 9 september 2004 11:17

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Ted Butler: Like hurricanes, silver is a matter of when, not if

By Theodore Butler
Tuesday, September 7, 2004
www.InvestmentRarities.com

As foretold by the COTs and the market structure,
the buying orgy by the technical hedge funds
appears to be leading to indiscriminate tech fund
selling. The dealers appear to be harvesting the
tech funds once again. While it is difficult to
fathom the self-inflicted beating the tech funds
bring on themselves, it does create opportunity
and, ultimately, a low-risk buy point in silver.
What will be interesting to see is if the silver
mining companies take advantage of the
developing selloff and buy some real silver. My
feeling is that they will fail to take advantage,
once again, of a wonderful opportunity. In the
long run, of course, the price of silver will do
what it is destined to do, with or without the
support of the miners. But at least we will all be
able to look back and reflect on who did, or did
not, attempt to end the silver manipulation.
Hopefully, real silver investors will take
advantage of the developing selloff, even if the
miners don't step up to the plate.
I dodged Hurricane Frances by fleeing south to
the Florida Keys to stay with relatives. It proved
to be a good move. The eye of the hurricane passed
close to my residence in Jupiter. Meanwhile, the
Keys remained largely untouched.
I spent time talking over matters with my
brother-in-law, and we agreed, as long-time Florida
residents, that it was just a matter of time before we
were slammed with the "big one." Natural disasters,
particularly hurricanes, which come with some
warning, are emotional and force you to contemplate
the future. They test your preparedness and reaction
to difficult and changing circumstances. There is a
heavy responsibility when other family members
depend on your choices and preparedness.
I can't help but see the strong connection between
silver and hurricanes.
I thought I was prepared for Frances, having secured
hurricane shutters years ago. I had food and water
supplies, a full tank of gas, and a logical escape plan.
I felt I had things under control. But I was dumbfounded
by the complete lack of readiness by some of those
around me. Had not Mother Nature let us off fairly
gently, many thousand could have been overwhelmed.
The one lesson from the hurricane that rings loudly is
how quickly vital supplies can become unavailable.
Things that we take for granted and are always available
in abundant supply; gasoline, electricity, ice, food, and
even water disappear in the relative blink of an eye. One
storm and your daily existence is turned upside down.
Commodities and vital services that have never been
denied are suddenly unavailable.
It makes me think how silver could be much like gasoline
or ice or electricity after a major storm. It too could go
from relative abundance to no longer available in a jolt.
We could wake up one day and be without silver.
There are great similarities as to how things like ice and
gasoline suddenly become unavailable, and to how silver
could become unavailable. In our modern society, the
supply and distribution lines are thin. Most goods today
are produced and distributed in a just-in-time manner,
as opposed to holding big inventories, which protect
you in the event of an unforeseen emergency.
Since capital is tied up in those inventories, it's
advantageous to the bottom line to hold minimal inventories.
The downside to this kind of distribution is that it
can be overwhelmed by disruptions and sudden surges
in demand. Then just-in-time breaks down and fails
miserably. A distribution interruption in gasoline
deliveries, coupled with a sudden desire by everyone
to fill up or top off their gas tanks results in long
lines and shortages. Panic can ensue.
While silver may not be needed by the average person
to sustain daily life, it is certainly needed by many
thousands of industrial consumers, whose corporate
life will suffer and die without a continuous supply. It
is these industrial consumers who will panic at the first
sign of supply disruption. Perhaps not all of them, but
certainly some of them. They will be just like the
people who panic when they can't get gasoline. Then,
as some users rush to secure adequate supplies of
silver to prevent shutting down their assembly lines,
other users will be further denied, causing the silver
panic to rapidly expand.Nothing comes close to silver, as both a vital industrial commodity and a precious metal recognized by the
masses. As the price escalates in an inventory panic,
people will be attracted by the price action to participate
in the price rally. This will add fuel to the fire. All that's
needed is a catalyst to get the move rolling. That's
where the analogy between silver and other vital
commodities really gets interesting. It doesn't take
a national catastrophe to cause a buying panic in
silver. That's because, unlike other vital commodities,
silver is already in a structural, ongoing deficit. Nothing
unforeseen need loom in silver, since what we already
can see is sufficient to set off the panic. With a
hurricane it is always "if," but with silver it is "when."
A buying panic in silver must eventually occur,
according to the law of supply and demand. That law
is right up there with Mother Nature in terms of being
an overpowering force. More demand than supply
means higher prices. If those higher prices are denied
due to an artificial manipulation, as they have been,
then the price reaction will be that much greater when
that manipulation is terminated. Unlike the buying panic of gasoline caused by the hurricane, the coming buying panic in silver will not be
confined to a state or region; it will be worldwide in
scope. That's because the forces that will cause the
silver price move cover the whole world. It won't be a
matter of shipping extra gasoline supplies to a number
of counties in Florida; it will involve shipping silver to
all corners of the globe.
The biggest difference between the buying panic in
gasoline or ice in Florida and the coming panic in
silver is that you buy gas or ice to consume, not to
profit. You don't make a profit by having your gas tank
full. The industrial users buy silver to consume, not to
profit, while the average person can make a profit by
buying and holding silver. That's the whole point.
Being adequately prepared, as far as gasoline and ice
are concerned, will make life easier in the short run.
Being adequately prepared with silver will make life
better in the long run. There are not many such
opportunities available.
My analogy with the hurricane is meant to show how
supplies of vital commodities can suddenly become
unavailable. Silver hasn't reached that point yet. The
law of supply and demand tells us that it will. A
commodity in a deficit must become unavailable at
some point, unless the price rises enough to slow
demand and increase supply. That is the great allure
and certainty in silver.
I believe you have a wonderful and unique opportunity
to profit from a coming buying panic in silver. That
buying panic will occur whether you buy or not. But
you can only maximize your profit if you are
positioned before that buying panic occurs. I think
a great lesso

[verwijderd] 11 september 2004 00:53

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David N. Vaughn, editor of the new Gold Letter,
has written commentary defending GATA
Chairman Bill Murphy against more sniping
by MineWeb's Tim Wood. Vaughn's essay,
"The Gold Price: Management or Manipulation,"
can be found at GoldSeek.com and
FinancialSense.com here:

news.goldseek.com/GoldLetter/10942214...

www.financialsense.com/fsu/editorials...

Wood apparently won't be replying, at least
not from MineWeb, from which it is reported
that he has just resigned to accept a position
at International Investment Conferences,
sponsors of the major gold shows in San
Francisco, New York, Las Vegas, Cape Town, and
London:

www.iiconf.com/

This is the sort of thing that always seems to
happen with GATA. Murphy's enemies tend to be
the enemies of higher gold and silver prices,
and while they will denounce, mock, and
criticize him, they will never, ever engage in
debate or argument with him or GATA over the
EVIDENCE of the suppression of gold and silver
prices.

Well, Murphy didn't get into this business to
make friends with the enemies of free markets
or with those who don't care that markets may
be rigged. Indeed, indifference to market
rigging may have been Wood's parting
proclamation at MineWeb, as expressed in his
August 24 interview with Sprott Asset
Management President John Embry about the
Sprott report confirming manipulation of the
gold market:

"TIM WOOD: I would say most people start from
the premise that there's no such thing as a free
market. The minute we have a central bank involved,
you've got someone essentially who is operating
interest rates and monetary aggregates according
to certain goals. So is it realistic to believe
that gold should be any freer than anything else?"

That is, after years of ridiculing Murphy and GATA
for claiming that the gold market was rigged, Wood
revealed that he knew it all along but just wasn't
telling MineWeb's readers:

www.mineweb.net/sections/gold_silver/...

And now that Wood has been caught, he's out of here.

Murphy may be, personally, everything his enemies
say he is, except for one thing: wrong.

[verwijderd] 14 september 2004 09:02

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Dit artikle geeft een uitstekend in en overzicht van de mogelijke CB verkopen. September 2004

Provided by “Gold-Authentic Money”
news.goldseek.com/AuthenticMoney/1095...

The Central Banks involved in the 2004 Central Bank Gold Agreement are to announce the amounts of gold they intend selling under this agreement at the I.M.F. meeting early October.
At present they have already agreed that there will be a ‘ceiling’ of 500 tonnes of gold sold per annum under this agreement. We have been led to believe that this is the amount that will be sold each year. However, announcements made subsequently, have not confirmed that this amount will, in fact, be sold. Since the agreement [See details at the end of the article] was announced earlier this year, the market has been waiting expectantly for confirmations of further sales. As of this moment intended sales may well fall short of the 500 tonne ceiling.
The “Washington Agreement” is due to terminate on the 26th of September this year and the new agreement will come into force thereafter. These announcements we believe will demonstrate the continued value of gold in the reserves of the European Banks, despite these sales. It may well be that these announcements confirm our expectation of lower sales than the 500 tonnes but imply that the sales that do take place will be conducted in such a way as to stabilise any overheated market. A look at the present situation leads us to expect certain likely announcements in October, in Washington at the I.M.F. annual meeting.

The Present Situation
q The market has factored into the gold price, minimum sales of 500 tonnes per annum for the next five years, by Central Banks. Reductions in this amount will have to be factored into the price subsequently.

q Earlier this year, under the previous Bundesbank President Ernest Welteke, it appeared certain that Germany was marching ahead to sell 500 tonnes under the new agreement. All in the market expected that that these sales would be spread evenly over the five years. But Alex Weber, the new Bundesbank President said earlier this year, “the decision on how much gold the German central bank would sell depended “on the outcome of discussions with 12 other central bankers representing nations using the Euro, on currency reserves”. The Bundesbank considers gold a form of "natural hedging against strong swings in the dollar" and is giving it "an important role" in the management of its funds, Weber said. No further talk of the sale of 500 tonnes of gold from Germany has been heard since. So far, we are led to believe that Germany has only requested an option to sell this amount from the other signatories of the new agreement. It will take Germany’s Parliament to pass new legislation to permit such sales. No such planned legislation has been announced to date. We expect them to announce the quantity they sell in Washington.

q France’s Finance Minister announced possible sales of 600 tonnes, and was supported by a seemingly reluctant Noyer, the Governor of the Banque de France. His reluctance was apparent in the statement he made after the potential sale of France’s gold was made, when he said, “the central bank will wait until gold prices are "appropriate" before agreeing the sale, adding that a decision will be made either by the end of this year or the beginning of 2005. In addition, he added “The bank will certainly take into account the price. If we feel the timing is not appropriate, then we will wait”. If we understand correctly, he appears to have taken certain backward steps since then. No firm announcement of sales has been made. We expect an announcement from them in early October too. Their policy as stated appears now to be the one adopted by the other signatories.

q Italy has been silent on gold sales from their reserves. It has the potential to sell 1700 tonnes if it reduced the gold content of its reserves to the same level of those held by the European Central Bank.

q Portugal previously indicated it would be a happy seller of gold within the new agreement, but has made no announcement of sales to date. It has the potential to sell 969 tonnes.

q Holland has confirmed their previously announced sales, through the Dutch Central Bank President Nout Wellink, of the remaining 50 tonnes of its gold, planned to be sold under the “Washington Agreement”, under the new agreement, plus another 100 tonnes. This is a continuation of its long term policy to sell gold.

The changes in attitude to gold.

During the year to date, Europe’s Central Bankers have been reviewing the importance of gold in their reserves. Undoubtedly there has been a change in their attitude to Gold markets recently. With the risk now attendant in holding U.S. $ as the main reserve asset, the qualities of gold as a solid monetary instrument have become increasingly clear. As there is no possibility of the $’s role being reduced in the monetary system for many years, the position of gold has been reinforced as a present effective alternative to currencies in general.

· This was aptly demonstrated by the move of Argentina in buying 42 tonnes of gold for its reserves. Its tragic recent history of the $ standard and the disastrous exit from this system, turned that country back to gold.

· China’s Central Bank Governor, in appreciating the difficulties in purchasing gold for the Central Bank, is actively encouraging the purchase of gold for its citizens, pointing out the value of the metal in countering inflation and price shifts. It is more than likely that the demand for gold from China will be enormous in the years to come.

Comments from Central Bankers in general have demonstrated that the sale of gold from reserves is not proving a wise policy. With the trading partners of the U.S. [most of the developed and some of the underdeveloped world] concerned with the maintenance of their competitive position, the effectiveness of holding currencies other than the U.S. $ as an alternative are disappearing. Gold is therefore singularly effective as a counter to the swings in the $, so warrants an important role as a reserve asset. With the demand for gold set to continue at high levels as an investment, the previously held arguments against gold [that it yields no income] look weak, particularly when one understands the role of reserves. They are there to retain value in all seasons, particularly bad ones. Holding all reserves in income earning assets that does not provide that value in times of distress, is clearly not prudent.

It is with this in mind that Central Bankers have been discussing gold in their reserves.

Announcements to be made in early October.

At the I.M.F. conference in October, the signatories of the 2004 Central Bank Gold Agreement will announce details of their intentions regarding actual sales under the agreement.

· Italy’s central bank head Antonio Fazio has confirmed that he “will say something in Washington” on Italy’s position on gold. Most will expect him to announce gold sales. However, we suggest you also allow for the announcement of no, or small sales!

· France indicated earlier that it may not make any announcement until 2005 early.

· We expect an announcement from Germany in Wash

[verwijderd] 14 september 2004 17:48

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Price of Gold Manipulated, Embry Says;Central Banks Dumping
Sprott Manager Ruffling Feathers on Bay Street Again

Drew Hasselback
Financial Post (National Post), Toronto
Tuesday, September 14, 2004

www.canada.com/national/nationalpost/...
ory.html?id=b7c0524a-f822-4d75-a02f-4edf7c80daba&page=1

John Embry, one of Canada's best known gold bugs,
is ruffling some feathers again in the otherwise staid
corridors of Bay Street.

A couple of weeks ago he started circulating a report
that details his belief the gold market is manipulated.
It's a remarkable paper, given that it's rare to see any
veteran member of Canada's investing establishment
go public with such a potentially controversial position.

Mr. Embry, chief strategist at Sprott Asset
Management Inc., spells out his argument in "Not
Free, Not Fair: The Long-Term Manipulation of the
Gold Price."

If it sounds familiar, it's because we've heard Mr.
Embry make this pitch before. Mr. Embry's new
report echoes a paper he drafted two years ago
when he was a senior money manager at the
Royal Bank. The internal report was leaked,
causing quite a stir.

"The bank ran away from it as fast as possible
and most people just dismissed it as being from
the idiot fringe," he recalls.

"Now a little more than two years have passed.
It's not the verboten subject that it was then. More
people are prepared to say, 'Yeah there's
screwing around going on in the market.'"
While he sees evidence of manipulation, Mr. Embry
avoids the word "conspiracy." He doesn't believe a
coterie of bankers met in the shadows back in 1995
and mapped out a devious plan to suppress the
gold price. But he believes the gold price is being
managed. Mr. Embry describes how in his new,
71-page report.

"Some people don't like the truth. I really like the
truth. To me, in the gold market, the truth is that
there's been considerable management of the gold
price."
Mr. Embry, 63, insists he was not pushed out of
Royal Bank after his 2002 report made the rounds.
He had expected to remain with RBC Global
Investment Management until the end of 2003,
managing such powerhouses as RBC's flagship
$2.9-billion Royal Canadian Equity Fund.

But in March of last year, Eric Sprott called him
out of the blue and offered him a spot with the
smaller firm. Mr. Embry traded in the big shop
for a smaller one that better accommodates his
passion for precious metals. He now manages
the Sprott Gold and Precious Minerals Fund,
which has assets of just under $300 million.

"It's nice to work somewhere where you can
express your opinions and not have your employer
jumping all over you because your views really
don't support their point of view," Mr. Embry says.

Here's a condensed explanation of what Mr. Embry
argues in the new paper.
Central banks have been moving bullion out of their
vaults and adding it into the supply chain, which has
swamped the market and held back the gold price.
Meanwhile, Mr. Embry believes central bankers
have changed the methods they use to calculate
inflation. This masks that amount of inflation that
might actually be in the system, allowing central
banks to pursue the low interest rates policies that
are fuelling growth.

"I call gold a thermometer of economic and financial
health. The criticism I would offer the central banks
is that basically they're trying to create a false
confidence that everything's all right because the
gold price doesn't do anything," he says.
"If these guys (the central banks) stopped supplying
additional gold to the market, the gold price would
levitate. It would go up sharply. You'd be talking about
moves of US$20 or US$30 a day."
There's more at play than the supply from the vaults
of central banks, he adds. That flow of central bank
bullion gave rise to derivatives trades that took the
market by storm.
They worked like this: Central banks would lend gold
at extremely low interest rates. Borrowers would take
that gold, sell it short, then invest the proceeds in
bonds paying higher interest rates than those charged
by the central banks. The borrowers were therefore
making two gambles: The gold price would fall, making
it easier for them to cover the short position; and bond
rates would remain higher, making it possible to
generate a profit on the spread.
"It was a great opportunity. It made perfect sense.
Everybody wanted to do this transaction," Mr. Embry
says.
But there was a problem, Mr. Embry explains. Few
speculators were thinking about how they would
eventually be able to return the borrowed gold to
central bank vaults.
The gold that was originally loaned out has now largely
left the system. It has been melted down into jewellery
and bars. So the only way to replace it is to mine fresh
gold from new sources. Yet because the gold price has
been suppressed, mining companies have been
hesitant to build new mines.
If Mr. Embry's analysis is correct, the decreasing gold
production should put pressure on prices to rise.
Volatility should erupt once the dam bursts.
"I think this is one of the greatest investment
opportunities I've ever seen in my career," he says.
"Do not be afraid of this. This is opportunity. When
they push gold down, buy it and buy gold mining
shares. If you feel the need, when they run gold up,
take some off the table. We should always be
buying on weakness, but human nature being what
it is, people get scared and they sell on weakness."
Not everyone sees things exactly Mr. Embry's way.
John Ing, president of Maison Placements Canada
Ltd., also has bullish views on gold, but believes
bullion prices are influenced more by macroeconomic
factors than by the interplay of central bank supply
and related derivatives.
"It's a factor out there, but it's only one of a bunch of
factors that guys like me watch. It's the macro factors.
I've been lately focusing on the deficits and the price
of the U.S. dollar," Mr. Ing says.
As for Mr. Embry, he has no problem if people
disagree with his argument. His paper is available from
Sprott's Web site:
www.sprottassetmanagement.com

"What we tried to do was take all the evidence and craft
a story that would support our point of view," he says.
"Read it. Think about it. We'll have a debate with anybody.
Take us on. But just read it and think about it."

[verwijderd] 15 september 2004 09:23

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The Star of the Show
by Doug French

Mark Twain, in an unverified quote, once described a mine as "a hole in the ground owned by a liar." Using that definition, a horde of liars were in Las Vegas last week to pitch their projects and bright prospects to hundreds of gold geeks who attended the Gold & Precious Metals Conference.

While most mining company pitchmen and women were putting attendees to sleep with talk of drill samples, stripping ratios, and proven-and-probable reserves, investors perked to rapt attention to hear gold newsletter writers and prognosticators tell them which of these liars were worth investing in and where the economy is heading.

The star of the conference was day two’s keynote speaker, James Grant. Grant, perhaps the finest wordsmith in financial journalism, is the editor of GRANT’S Interest Rate Observer and author of four books on finance and financial history; Bernard M. Baruch: The Adventures of a Wall Street Legend, Minding Mr. Market, Money of the Mind, and The Trouble With Prosperity.

Grant is a devotee of the Austrian school of economics and often refers to the work of Mises, Rothbard, Menger, and Ropke in his books and newsletter.

Grant told the standing room audience that he is a "gold believer" and though he thinks the price of the metal will go up he is an "expert at not knowing when."

Gold competes against other currencies, Grant reminded the crowd, "with one arm tied behind its back." While investments in other currencies pay interest, gold pays none, a huge disadvantage. "Every time I look at a compound interest table I am startled anew," Grant deadpanned.

While not paying interest, gold is an "investment in historical truth." Being long the yellow metal is essentially being short Alan Greenspan and the Federal Reserve.

The most powerful central bank in the world has never been more revered than it is currently. But, when Grant hears central banker, he thinks government employee. When he hears rate setting, he thinks, price fixing. "How could the Fed know what the interest rate should be?" Grant asks.

This year is the ten-year anniversary of the Fed’s 1994 tightening. Greenspan and Co. doubled the federal funds rate from three percent to six percent in the 12 months from February 1994 to February 1995. This year, despite the funds rate being only a third of what is was ten years ago, and the economy being stronger, Greenspan held the funds rate at an emergency level of one percent for over a year (from June 2003 to June 2004) and is just now slowly inching up the rate.

The Fed has waited and been timid to raise rates because "society is encumbered." "The world is more sensitive than ever to short-term interest rate increases," Grant pointed out. Thus the Fed is reluctant to move on interest rates.

Despite a hesitant Fed, Grant believes that a generational bear market in bonds began in January of 2003. All bond bull and bear markets are generational, Grant says, and coincide with the life cycles of monetary systems. But as far as what the bond market will do next week, next month or next year, Grant is an agnostic.

America’s trade, current account and budget deficits will ultimately undo the dollar’s credibility. The only collateral for the dollar is the American persona. The dollar is only "supported by an idea," Grant told the crowd, "but will the idea hold up in the face of adverse arithmetic?" Grant is betting no.

Grant told the audience that Alan Greenspan himself made the best case for gold in a speech just a few months ago. Greenspan pointed to the five percent of GDP trade deficit and the fact that despite having a very low savings rate, interest rates in the U.S. are quite low. The Fed is printing money, and foreigners have been happily trading their goods for the inflated dollars. But, the gold price will likely increase, when foreigners get tired of making this trade.

During the Q &A session, Grant was asked what he does with his money. Other than an investment in small businesses in Japan, Grant described his investments as low-tech and un-leveraged: Cash, mining company mutual funds and when he has extra dollars he buys a few Krugerrands, "which yield about the same as what my bank pays for interest (1%)," Grant joked, "but are not managed by the FOMC [Federal Open Market Committee]."

But, just because he believes interest rates are about to rise and putting away a few gold coins is a good idea, doesn’t mean Grant is all doom and gloom. Grant’s parting words were; "I think this will be a great world for our children and grandchildren."

A higher gold price, increasing interest rates, falling stock prices and lower dollar were common themes of the conference. If these seers have it right, this all bodes ill for the average person with few investment choices available to them other than U.S. stocks and bonds for their 401k’s.

September 15, 2004

Doug French [send him mail] is executive vice president of a Nevada bank and a policy fellow of the Nevada Policy Research Institute.

[verwijderd] 16 september 2004 16:20

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Producer de-hedging accelerates in 2004

---------------------------------------------------------------------------

Outstanding producer hedge positions were slashed by 209 tons in the six months to June, a sharp increase on the 43 tons cut in the six month period prior to that.
This is one of the key findings of GFMS' latest report on the gold market - Gold Survey 2004 - Update 1.

The significant fall left the delta adjusted hedge book at the end of June 2004 at a measured 1,997 tons, equivalent to 77% of 2003 annual mine production, the report says.

The position represented a 9% drop from the position reported at end- December 2003.

Commenting on the report, Senior Analyst Bruce Alway said: "It's worth pointing out that, on a quarterly basis, the pace of de-hedging accelerated progressively from the September quarter 2003. And there's every sign that this acceleration has continued into the second half of this year."

He identified three main drivers behind producer de-hedging in the first half of the year.

Firstly, hedged producers continued to reduce their cover in line with stated goals and in some cases exceeded these targets.

Of equal importance was merger activity.

Two major deals saw hedge books exchange hands and, in one case, substantially cut and, in another, completely closed out.

Finally, Alway highlighted the significance of book restructuring which contributed not only to an overall drop in protected volumes but, more importantly, had a marked impact on the make up of the global book itself, which was further concentrated in simple forward sales.

On a company basis, AngloGold Ashanti's combined hedge book was reduced by 62 tons from their respective positions reported at end-December 2003.

Barrick reduced its outstanding position by 51 tons, whilst a major book restructure completed by Newcrest resulted in a 22 tons decline in their delta adjusted position.

Other noteworthy contributors to the half yearly drop in the producer book were Placer Dome (19 tons), Avgold (18 tons) and Cambior (15 tons).

De-hedging is forecast to hold at elevated levels of over 200 tons in the second half.

The report points out that in the light of recent events - the announcement by Thistle Mining in August that it had bought back around 15 tons of contracts; news from New Zealand that Oceana Gold closed a 29 tons position and, lastly, the news at the end of August that Sons of Gwalia (who at end-June had a 52 tons delta adjusted hedge position) had been put into voluntary administration - the base case level of 200 tons of de-hedging could well be a minimum.

I-Net Bridge

[verwijderd] 18 september 2004 23:34

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Jim Puplava, proprietor of FinancialSense.com, has
turned his weekly Internet radio roundtable program
over to a discussion of manpulation of the gold market.
His guests are Sprott Asset Management President
John Embry; James Turk, editor of The Free Market
Gold & Money Report and proprietor of GoldMoney.com;
and GATA Chairman Bill Murphy. You can listen to
it at the FinancialSense.com site here:

www.financialsense.com/Experts/roundt...

[verwijderd] 21 september 2004 21:30

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The Setup?By Ted Butler
Monday, September 20, 2004
www.InvestmentRarities.com

The market structure, as defined by the Commitment
of Traders Report (COT) for futures positions on the
COMEX, improved dramatically for silver over the past
two reporting weeks. It is rare to get a bullish surprise
in this report, but the amount of technical fund selling
and dealer buying was outstanding. In fact, the current
readings show that we are just about at the low levels
of net dealer short positions seen at the prior two
"mother" buy points. While it is always possible for
further improvement (along with lower prices), the bulk
of the tech fund selling/dealer buying is behind us, in
my opinion.
In the past two weeks the tech funds have sold and the
dealers have purchased, 20,000 net silver futures
contracts on the COMEX. That's the equivalent of 100
million ounces of silver. Although I have written about
this extensively in the past, I ask you to consider it
again. The only reason the price of silver fell more
than 80 cents an ounce (more than 10 percent) in the
reporting period was due to the paper sale of 100
million ounces of silver by the technical funds on the
COMEX. Most of the decline came over a three-day period.
I ask you to think about that 100 million ounces of
silver contracts sold by the tech funds and bought
by the dealers. First, it is truly a very large quantity
of silver. It is more than 16 percent of total world
annual mine production, and double what the
United States mines annually. It is greater than what
Mexico, the world's largest silver-producing country,
mines in a year. It is almost as large as the entire
inventory in the COMEX-approved warehouses, the
largest known inventory in the world, by far.
This 100-million ounce amount that just changed
hands on the COMEX is roughly equal to the famous
purchase by Warren Buffett seven years ago. The
difference is that Buffett took more than six months
to buy his real silver, the most celebrated silver
transaction in decades, while the equivalent amount
was transacted in a matter of days on the COMEX.

Common sense should tell you that the COMEX
transaction, even though it was paper, exerted a
large influence on price, given its large size. In fact,
it was the only logical explanation as to why silver
sold off so sharply.

My point here is clear; paper trading on the COMEX
sets the near-term price of silver, and not supply and
demand in the real world. Period. This is the purest
example of manipulation that you will ever see. To
those who would argue that there is a buyer for every
technical fund contract sold, I would agree. The
problem is that it always is the dealers who collude
and conspire among themselves, and collectively
pull their bids as the tech funds sell. This is why
prices always suddenly collapse when the tech funds
get long. It is always just a matter of time. The
question is: Why are the tech funds so stupid to
continue playing this rigged game?

The other question is: Why are the silver miners not
objecting to this obvious rigging of the price of silver?

A couple of weeks ago I predicted that if the price of
silver sold off, it would be because the dealers
hoodwinked the tech funds again. That is exactly what
happened, as verified by the government-issued COT
report. I don't know how it could be clearer that paper
speculators on the COMEX are setting the price of
silver. This is expressly against the remise of
commodity law.

If the miners, principally but not limited to Pan
American Coeur d'Alene, Apex, and Hecla, haven't
taken advantage of the well-telegraphed selloff to
buy silver, they have squandered another wonderful
opportunity. If all they are doing is thinking about it,
it is probably too late. At the very least they should
be speaking out against the documented shenanigans
on the COMEX.

The good news, of course, is that the tech funds have
already sold. Most if not all of the risk has been
removed from the silver market. Now all that remains
to be seen is if the dealers sell short again on the next
rally, as the tech funds come in to buy. If they do sell,
it may not be the big one. If they don't sell short
heavily, it WILL be the big one.

Either way, we won't know until the rally develops, but
we should get that rally nonetheless. So this is not the
time to hesitate to buy, based upon the tech fund
cleanout in the COTs.

[verwijderd] 22 september 2004 18:27

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Europeans wait nervously for the golden revolution

By Kevin Morrison
Financial Times
Tuesday, September 22, 2004

news.ft.com/cms/s/48d063cc-0c34-11d9-...

It is six months since European central banks
announced they were renewing the gold-selling
pact that has helped stabilise prices over the
past five years. But a week before it comes into
force, gold traders are waiting nervously for the
details on who will be selling how much.

The biggest uncertainty is whether the 15
signatories to the new accord will be able to sell
the maximum 500 tonnes a year set for the new
five-year pact, up on the 400 tonnes a year under
the existing sales programme. Central bankers
say there are enough sellers of gold among the
European central banks to fulfil the planned sales
quota. But bullion traders say not enough central
banks have committed to selling their bullion
under the new pact. They see this as a sign that
the banks may struggle to dispose of all the gold
for sale.

Since the European Central Bank and 14 other
European central banks announced in March that
they planned to renew the existing five-year
agreement, almost 1,400 tonnes of the planned
2,500 has been earmarked for sale. The bulk of
these sale commitments have yet to be fully
confirmed.

"We doubt whether the renewed agreement will
lead to an increase in gold sales by central banks.
Rather, we believe there is a strong possibility
that the signatory central banks could end up
selling materially less gold," said John Reade, a
precious metals analyst at UBS.

However, one central banker said there was full
commitment to sell the proposed amount. "I have
no reason to doubt that this amount will be sold."

The aim of the first pact in 1999 was to bring price
stability and greater transparency to the gold
market by wrapping the separate bank sales of
bullion under one co-ordinated sales programme.
When Gordon Brown announced the Bank of
England was selling gold in 1999, the price
dropped to a near 20-year low.

However, the signatories are under no obligation
to reveal when and how much gold they plan to
sell. "There are no requirements for us to reveal
our positions before the new agreement starts,"
said the central banker.

The Netherlands and Switzerland have been the
clearest about their intentions. The Netherlands
plans to sell 165 tonnes over the next five years.
Switzerland said it would sell 130 tonnes, taking
its bullion holdings from 2,600 tonnes in 1996 to
about 1,300 tonnes.

Germany has said it has an option to sell up to
600 tonnes under the new accord and France has
said it intends to sell 500 tonnes. However, the
central banks of both Germany and France are
battling with their respective finance ministries
over how to spend the sale proceeds. Germany
and France are the two biggest holders of gold
within Europe and are key to the new agreement.

The position of the third biggest holder, Italy, is
also unclear. The Bank of Italy said last week
that it had no plans to sell its gold reserves,
which amount to about 2,500 tonnes. However,
bullion traders and analysts have said the Italian
bank might still turn seller.

Uncertainty about the gold sales would only
affect prices if the banks were to announce that
they were unable to sell the full amount.

Gold prices have ended above $400 a troy ounce
for most trading days during the past four weeks,
and were $408 a troy ounce in London yesterday
before the Federal Reserve meeting.

The International Monetary Fund meeting in
Washington on October 3 may provide further
details about the renewed plan. The IMF helped
co-ordinate the original agreement.

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