Published: Sunday, December 11, 2005
Bylined to: Bob Chapman
Crystallex part of dirty war against Venezuelan President Hugo Chavez Frias
THE INTERNATIONAL FORECASTER editor Bob Chapman writes: In spite of major intervention by the gold suppression cartel in Asia, gold closed Monday up $5.50 at $508.00. Silver was up $0.08 to close at $8.63. This will be old news on Saturday, but still significant. The gold cartel is clearly in trouble. In addition, the fact that the public in Canada, the US and Europe are not in the market at all is extremely bullish.
Physical buyers are overwhelming the cartel and the shorts still have not covered in any meaningful way. At the rate the rally is moving, the shorts still in place, and room for lots more longs, we believe there is a possibility this move could run out of temporary steam at $550 or there abouts.
Don?t forget as well that 150 tonnes more of gold is consumed monthly than is produced or gained from scrap.
* Frankly, we are happy Americans, Canadians and Europeans are so dumb ... it gives us someone to sell to on the way up.
We might add that the dollar is still strong. As it falls, which it must, you will see added impetus on the upside for gold and silver. We expect between $508 and $500 the shorts will attempt to average their positions, which will be fatal for the commercials. They should be taking their losses and moving on with the market. They will average because the elitists have told them to and it won?t work. If you are a contrarian as we are, all the news for gold and silver is enormously bullish. There is no speculation in this gold market because it?s a physical delivery market.
As the Japanese yen falls to a 34-month low against the dollar the Japanese investors bought more gold, 44 tons more, to hedge their yen losses. As on the Comex, dealers are suffering losses from their short positions. The TOCOM premium is $7.00 higher than London spot prices.
From Tehran, Iran, the Chairman of the Majlis Energy Commission says preparatory measures have been taken to sell oil in euros instead of dollars, and saying it should be done ASAP. Iran should be at the first phase to sell its oil in euros and dollars, and then gradually move toward the euro as the single source currency.
What is really hot about gold is that it is going up in all currencies. That means the potential investment on a global basis is huge. If just 5% of all currency holders sold to buy gold, where would the price be?
We don?t know, but it will be somewhere in the stratosphere.
What is even more bullish is that Robert Prechter says gold is going to $430 ... he has only caught the boat once in 30 years.
Performance, particularly in major gold stocks, leaves no question in our minds that the Fed and the PPT are using hedge funds to suppress gold share prices. They at least for now are managing major gold shares. The short positions are in the 30 to 40 million range on almost all issues. They are also trying to manage Crystallex (KRY) as part of the neocon dirty war against Venezuelan President Hugo Chavez Frias.
Word from the G-7 meeting last weekend was the dollar will soon decline again ... there was also news of an unconfirmed 7.2% increase in the value of the yuan early next year. That has to be bullish for gold.
* This was a top week on the takeover trail. Yamana Gold made an offer for RNC Gold. Goldcorp bid for Virginia Gold for its Eleanore Project and IAM Gold acquired Gallery Gold.
The ECB has announced two gold sales by member banks for 148 million euros last week, or 8.54 tons. The previous week?s sale was 11.79 tonnes. The mainstream still refuses to discuss gold. They are stunned and groping to explain why gold has traded at $520. They are well aware of the problem and refuse to discuss it. It is just like Condi Rice?s trip to Europe. If she doesn?t answer questions or discuss torture and torture camps in Europe, she and the neocons think the problem will go away. Neither problem is going away and lying by omission is not going to solve any problems.
Gold jewelry demand in the UAE year-on-year rose 13%. Overall jewelry demand in the Middle East rose 38%.
The site for the Silver Association, after having received its 1,000 signatures on its pro-ETF petition, was hacked. It looks like our government does want a silver EFT (Exchange Traded Fund). This happened just after receiving 1,000 signatures to promote the public offering of a Barclay?s ETF and having sent a letter to the SEC. Who says conspiracies don?t exist?
The Fed felt its power when it first manipulated the gold price illegally during the October market crisis of 1987. When they saw what success they had they were able to get an executive order making market manipulation legal with the Working Group on Financial Markets. That same year, 1988, a deal was cut with Barrick Gold to hedge gold production, enabling the beginning of ongoing control of the gold price. In that same year gold leasing began on a very limited basis, as it was needed. In July 1993, Fed governors expressed concern about rising gold prices because it would create inflation fears. If gold were not to increase in value the dollar as a result would remain strong. Thus, in August 1993, official secret central bank gold suppression began on a serious basis. This shortsighted consideration has led us to where we are today. Central banks over 12 years have sold or leased most all of their gold and have lost the ability to control the market. What the 12-year suppression has done is allow you to buy gold related assets at abnormally reduced prices. The gold price is like a stretched rubber band that is about to snap forward. The $500 breakout was the key. Buy now, because you?ll never get a cheaper opportunity.
October South African gold output fell 6.4% by volume while overall minerals? production rose 3.9%. Production of non-gold minerals increased by 6.1%. Overall mining production declined by 2.1% versus September.
Ireland, Finland, Greece and Germany were not gold sellers last week. The ECB itself sold 6.5% or 1.6 million ounces in the first 10 months of the year, which leaves it with 23.05 m/oz. The biggest seller was France, which sold 5.432 million ounces, a reduction of 5.7% to 90.55 m/oz. The Dutch sold 1.998 million ounces shrinking gold assets by 7.8% to 23.048 m/oz. Spain reduced their gold reserves by 9.9% or 1.67 m/oz. to hold 15.16 m/oz. Portugal sold 1.6 m/oz., a 7.8% reduction in reserves leaving 13.7 m/oz. Belgium sold 982.088 ounces, an 11.8% reduction taking reserves down to 7.3 m/oz. Italy only sold 315.600 ounces, reducing gold assets by 0.4% to 78.5 m/oz. Austria sold 189.400 ounces or 1.9% taking reserves to 9.7 m/oz. Germany sold 176,000 ounces cutting reserves 0.2% to 110.2 m/oz and finally Luxembourg sold 868 ounces cutting holdings to 73,768 ounces. Goodness knows how much of those reserves have been leased out.
Greece bought 5,303 ounces or 0.2% more putting reserves at 3.47 m/oz., Ireland 514 ounces to a total of 193,323 ounces and Finland added 432 ounces to 1.577 m/oz. 10.05-m/oz. were sold and 6,249 ounces were bought.
Jimmy Rogers says the gold bull-run could continue and possibly breach $900 an ounce. The former high was $873 in intraday trading during January 1980 ... he sees a dollar decline next year as we do and he says, as we have, under-exploration will continue to underpin metal and commodity prices.
?The dollar is fundamentally flawed, and it?s going to be a serious problem in the next 5 to 10 years.? He has never been a fan of gold and was George Soros? ex-partner.
We are on our way ... enough said.
THE INTERNATIONAL FORECASTER
P. O. Box 510518, Punta Gorda, FL 33951, USA
Bob Chapman email@example.com