Yessssss!!!! Gold Always believe in .... Gold, Your indestructible, GOLD!!!

[Letsbereal]

CME Group to raise silver margins by 30 percent
11 November 2010, (Reuters)
http://money.ninemsn.com.au/article.aspx?id=8121795

Excerpt:

CME Group said on Tuesday it will raise its silver futures trading margins by 30% to $6,500 an ounce from $5,000 an ounce effective Wednesday.

----

Exchanges often raise margins to mitigate risks as price volatility increases.


US silver margin hike, volume surge rattle markets-UPDATE 2
10 November 2010, (Reuters)
http://www.forexyard.com/en/news/silver-margin-hike-volume-surge-rattle-markets-2010-11-09T231634Z-UPDATE-2-US

[Letsbereal]

Three’s Company
9 November 2010, by James G. Rickards (King World News)
http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2010/11/9_Jim_Rickards_-_Threes_Company,_Silver_Margin_Change.html

There's been a lot of buzz about today's price action in gold and silver.  Beginning with the Monday push upwards based on the Zoellick op-ed in the Financial Times, the market surged upward through most of the day today and then hit a serious air pocket with gold falling 2% and silver falling almost 5% in a short period of time late in the trading day.

On a technical basis, there's nothing surprising about that; we've seen similar moves before and I expect to see them again.  The overall trend has been upward with higher highs and higher lows.  The market seems to find a strong bid at progressively higher levels even after sharp corrections.  Nothing too disturbing there and nothing to indicate that primary trends are not still intact.

What was noteworthy was the catalyst for the pullback, specifically an increase in margin requirements for silver futures contracts.  There was no comparable change in gold futures margin but as often happens in markets there was instantaneous contagion from silver to gold notwithstanding the different circumstances.  Again, no surprise that the markets correlate to a great extent even when the news only affects one market or the other.

This is a pointed reminder to the readers and listeners of King World News and something we have discussed before.  Most markets consist of two parties, the buyer and the seller.  But in futures markets there's a third party in every trade which is the exchange and more specifically the rule making bodies and margin setting panels on each exchange.  They act not in the best interests of buyers or sellers but in the best interests of the exchange itself and its statutory duty to maintain orderly markets.  Of course, the word "orderly" can be in the eye of the beholder.  What may be an "orderly" price spike to a long may be a "disorderly" rout to a short.  Either way, the exchange has the last word.  They have many tools at their disposal.  They can increase initial margin (what you put up when you open a contract) increase the frequency of variation margin (make you post intra-day instead of end of day) and require "trading for liquidation only" which means longs can go short and shorts can go long but no one can expand a position or increase the open interest.  Finally, an exchange can suspend physical delivery and allow offsets and rolls only.  All of these rules have been invoked many times and will be again.

Invariably the parties disadvantaged by these moves complain that the exchange is "changing the rules in the middle of the game".  That's a naive and pointless perspective.  The fact is that the ability to change the rule is itself a rule.  The exchange is not changing the rules, they are just utilizing an alternate set of rules that are already in place.  Traders should stop complaining and read the rule book.  It's all there.

What is more intriguing is what motivates the exchange officials to use these rules? Is it truly a disorderly market (the usual reason) or is it part of a larger coordinated effort involving Federal regulators and policymakers to do whatever it takes to push up prices of risky assets such as housing, stocks and junk bonds and push down prices of safe-harbor assets such as gold and silver?

The point is, when buyers and sellers transact in futures markets, they're never alone.  Exchange monitors are always looking over your shoulder.   Never ignore the power of the exchanges and regulators and always remember they will use this power when it suits them, not you.

[Letsbereal]

Asian Buyers Have Silver Shorts Checkmated
10 November 2010, by Eric King (KingWorldNews.com)
http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2010/11/10_KWN_Source_-_Asian_Buyers_Have_Silver_Shorts_Checkmated.html

Excerpt:

“There is an insatiable appetite for physical silver here and the shorts know that, the shorts know they are checkmated. The Asian buyers are layering in bids to take advantage of bear raids in the paper market which have been used to shake out the weak hands.”

Asian buyers were able to pick up silver at a discount at the lows of yesterday. They are continuing to buy today and tomorrow. People have to remember that spot trades 24 hours a day, so as the shorts raid the market, physical buyers already have orders in to buy tonnage of silver at a time on that weakness.

As I said to you the other day, the locals which were short with the banks were overrun when the price of silver stabilized just above $25.50 for a few hours. The local traders were margined out and silver moved over $1 higher later that same day.

In other words, the only entities that are left short here are the Fed backed banks. Nobody in their right mind would be short here.

Spot has been trading in front of futures here in London all day.  We have been in backwardation all day long on the LBMA.”

[Kilika]

Daily observations are a distraction and pretty much worthless unless your basing your actions on daily efforts and could care less about anything beyond maybe next week. Of course the markets are rigged and manipulated. It's the day trade mentality that has taken all these things from long term investments that they use to be, and turned them into a short-term quick cash crap shoot. It's legal gambling.

[Letsbereal]

Silver contract hits record volume: CME
10 November 2010, by Claudia Assis (MarketWatch)
http://www.marketwatch.com/story/silver-contract-hits-record-volume-cme-2010-11-10

Silver surged to a record volume on Wednesday, as 201,216 futures contracts changed hands, the CME Group said in a press release.

That handily beat the previous record of 127,890 contracts set Dec. 30, 1976. Silver tanked more than 7% on Wednesday after the CME, which owns Comex, raised margin requirements for silver futures.

The December contract settled at $26.87 an ounce on the Comex division of the New York Mercantile Exchange.

[Letsbereal]

GOLD AT $1410 LEVEL AGAIN!

Will we break the Gold All Time High from November 09 at $1423.84 o/z TODAY!?

[Letsbereal]

The great Indian Gold saga
13 November 2010, by Rutam Vora (Commodity Online)
http://www.commodityonline.com/news/The-great-Indian-Gold-saga-33440-3-1.html

Excerpt:

While global economy is struggling for a sustained recovery from the recession blues of 2008, Indian bullion market is shining bright outpacing the country’s real GDP growth at a handsome rate of 13% per year.

----

WGC notes that unlike other gold markets, the love for gold has not only spread across many generations but also across all social strata within the country.

“In India, gold is seen as a symbol of security and as a sign of prosperity. It is one of the foundation assets for Indian households and a means to accumulate wealth. In the Indian culture, gold is an integral part of daily life where purchases of gold jewellery are considered as a form of a liquid and tradable investment for the accumulation of wealth,” summarizes WGC about the Indian gold market.

For the global bullion market, India will remain pivotal, says WGC.

WGC further notes in the report that the country’s gold imports will rise at a robust rate in the current year. For past couple of years gold imports by India have been lower mainly on account of reducing demand at higher prices. India, which once imported in excess of 800 tonnes of gold annually, witnessed its imports shrinking to half in past few years.

But in past few months, India’s gold demand has been robust despite record high levels of prices. WGC report mentioned that gold jewellery demand in India, the world’s largest gold jewellery market, rose 67% year-on-year to 272 tonnes in the first half of 2010.

Despite the higher gold price, market sentiment remains positive, especially with the local gold market also benefitting from the strengthening of the rupee against the US dollar, noted the report.

Industry players noted that buying remained silent in the early part of the year as the consumers expected a correction from the peak levels. But as the high prices sustained for a longer period, buying returned into the markets in later months of the year.

According to WGC, gold jewellery and investment demand in India is expected to remain high as consumers have adjusted their price expectations upwards.

“This trend is projected to continue over the long-run as local investors are buying gold driven by wealth accumulation motives. The fact that Indian gold jewellery and investment demand remains robust, despite the rising price emphasises the enduring desire among local consumers to purchase gold driven mainly by its allure as a jewellery and its properties as a hedge to offset the effects of depreciation and erosion of both savings and income,” WGC report said.

The country currently has one of the highest saving rates in the world; estimated at around 30% of total income, of which 10% is invested in gold. Continued rapid economic growth and urbanization will create greater wealth but also inflationary pressures stimulating gold demand.

In 2009, total Indian gold demand reached USD 19 billion, or Rs.974 billion, accounting for 15% of the global gold market.

----

A market study noted that India’s gold ETF (Exchange Traded Funds) market is growing at a 100% rate for past couple of months. As the ETFs and other retail products facilitates investors to buy smaller units of gold, the participation in these markets is rising at a rapid pace.

As per the WGC report, total holdings amounted to 11 tonnes by the end of August 2010, up 77% from the same period last year, from 6 tonnes.

WGC has taken a note of India’s gold investment potential saying that India’s gold investment revolution is gathering pace.

In India, gold is viewed as a secure, liquid investment, a capital and value preserver and is the second preferred investment after bank deposits.

----

“In the longer term, we are confident that India’s favourable demographic trends, the growing affluent middle classes and declining age profile, should ensure buoyant consumption growth. The investment sector exhibits great potential for further growth and will play an increasingly important role in the domestic gold market as it overlaps with gold jewellery consumption, boosted by increasing accessibility and opportunities in new gold investment products,” said the WGC.

[Letsbereal]

For the record Gold hit an All Time High of $1424.30 on Nov. 9. (Bloomberg)
http://www.bloomberg.com/news/2010-11-14/gold-mocks-world-spooked-by-600-billion-fed-commentary-by-william-pesek.html

I had written down $1423.84 o/z but $1424.30 o/z to set it straight.

[Letsbereal]

Soros and Paulson Still Love Gold
16 November 2010, by Alix Steel (The Street)
http://www.thestreet.com/_yahoo/story/10921876/1/soros-and-paulson-still-love-gold.html?cm_ven=YAHOO&cm_cat=FREE&cm_ite=NA

Excerpt:

John Paulson and George Soros are still big believers in gold but sidestep silver, according to recent 13F filings for the third quarter.

As gold prices hurdled to new highs in the investing period from July through September, legendary investor Paulson retained his position as the No. 1 holder of the SPDR Gold Shares(GLD_) exchange-traded fund with 31.5 million shares. Soros, on the other hand, dumped 547,689 shares of the GLD reducing his position to 4.7 million shares, making him the eighth largest holder from the seventh.

Although Soros made headlines this year by saying that gold was the "ultimate asset bubble," he is still a believer in the precious metal. Soros initiated a new position of 5 million shares in the iShares Gold Trust(IAU_) making him the fifth-largest holder.

IAU attracted a variety investors recently when it lowered its expense ratio from 0.4% basis points, which is how much it costs to buy shares of the GLD, to 0.25%, making it the cheapest gold ETF. BlackRock is the biggest holder with 12.3 million shares and added a modest 230 shares in the past quarter.

JPMorgan(JPM_) was the second biggest buyer of the IAU adding 3.8 million shares bringing its total holdings to 3.9 million. JPMorgan didn't stop there. The large investment bank, custodian of the GLD, was the biggest buyer of the GLD adding 5.47 million shares for a total of 10.3 million making it the third-largest investor behind Paulson and Northern Trust.

The gold ETFs lost some big names as well with Eton Park Capital Management reducing its holdings of the GLD by 2 million shares and Royal Bank of Scotland closing out its position of IAU.

[Letsbereal]

Soros increased gold positions in third quarter
15 November 2010, by Alistair Barr (MarketWatch)
http://www.marketwatch.com/story/soros-increased-gold-positions-in-third-quarter-2010-11-15

Excerpt:

Soros Fund Management LLC, headed by George Soros, increased gold positions during the third quarter, according to a regulatory filing late Monday.

Soros held 4,697,008 shares of the SPDR Gold Trust and 705,000 call options on the gold ETF at the end of September, the filing showed.

Soros also owned 5,000,000 shares of the iShares Gold Trust at the end of the third quarter, according to the filing.

Three months earlier, Soros held 5,244,697 shares of the SPDR Gold Trust, a portion of which was a shared position.

----

Such regulatory filings don't include all positions held by investment firms. Many derivatives, direct commodity holdings and short positions aren't included.

[Letsbereal]

Gold falls on margin requirement increases – Rising dollar, low inflation also crimp market
16 November 2010, by By Claudia Assis and Laura Mandaro (MarketWatch)
http://www.marketwatch.com/story/gold-futures-tap-a-nearly-two-week-low-on-globex-2010-11-16

Excerpt:

Gold futures tumbled to their lowest in nearly two weeks Tuesday as investors learned they will have to pony up more money to trade the metal as well as silver, platinum and palladium.

Signs that U.S. inflation remains at bay and a rising dollar also contributed to gold’s fall.

----

The CME Group, which owns Nymex, late Monday raised margin requirements for its most popular gold, silver, platinum and palladium futures contracts.

A margin requirement is the money investors must put up to trade, and in the case of silver the exchange raised the maintenance requirement after a 30% increase last week.

----

For the 100-ounce gold contract, the most popular, initial and maintenance requirements rose 5.9%.

Silver maintenance requirements increased nearly 12%, while silver initial requirement rose 11.5%.

The increases come a week before investors will have to choose to roll over their contracts to February or March or take delivery. Some may choose not to put up more money and liquidate their positions.

“It’s going to be shoot first and ask questions later,” said George Gero, senior vice president at RBC Wealth Management in New York.

Prices for gold are likely to find some support around $1,320 an ounce, Gero said.

Earlier Tuesday, investors digested data showing an increase in U.S. producer prices at half the pace economists had anticipated. Prices rose a seasonally adjusted 0.4% last month, mainly on rising energy prices, the Labor Department said. See more on U.S. wholesale-level inflation data for October.

----

The SPDR Gold Trust declined 0.9%. Late Monday, several large U.S. hedge funds — part of a wave of relatively new financial speculators in gold — disclosed their holdings in the largest bullion exchange-traded fund.

Paulson & Co. disclosed that it held a SPDR Gold stake of 31.5 million shares, affirming the status of the fund firm run by John Paulson as the largest owner of the ETF. Read more on Paulson's GLD stake.

Soros Fund Management LLC increased its gold positions during the third quarter, a separate filing showed. Read more on Soros' holdings.

[Letsbereal]

* Which fund managers are loading up on GLD:
http://www.businessinsider.com/the-60-second-guide-to-hedge-funds-biggest-trades-right-now-2010-11#buy-gold-1

– Chris Shumway bought GLD – ~$270 million (~2 million shares)

– Julian Robertson bought GLD – ~$247 million (~2 million shares)

– Daniel Loeb bought GLD -~ $15 million (115 thousand shares)

– Peter Thiel bought GLD -~ $11 million (100 thousand shares)

[Letsbereal]

$53,957 in Circulation for Every Ounce of Gold
16 November 2010, by Eric King (King World News)
http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2010/11/16_$53,957_in_Circulation_for_Every_Ounce_of_Gold.html

Excerpt:

What King World News readers globally need to realize is that is does not matter whether gold is trading at $1,300 or $1,400, the fact is that gold is dramatically undervalued by any metric, and everyone should be exchanging their fiat money for gold because of that fundamental undervaluation.

[Letsbereal]

China Business Daily Reports China Is Considering Raising Gold Reserves
17 November 2010, by Tyler Durden (Zero Hedge)
http://www.zerohedge.com/article/china-business-daily-reports-china-considering-raising-gold-reserves

Excerpt:

The country which has languished in 6th position in the world, with combined gold holdings of 1,054 tonnes (just behind the GLD ETF), may have finally awoken that it needs to buy about 7,000 tonnes of gold to catch up with the US, and its 8,133 tonnes (or even France with 2,435).

China daily 21st Century Business Herald has just reported that: "China is considering raising its gold reserves, a move which would push up gold prices in the future, a person providing consulting services to the Chinese government said."

Conveniently, China can now buy gold notably cheaper courtesy of a $100 dip in gold price as recorded over the past week, precipitated by... China inflation concerns.

When next month the politburo reports below consensus inflation (as the number is imaginary to begin with), look for gold to surge, but not before China manages to load up at depressed prices.

From CBH:

The source told the 21st Century Business Herald China may gradually increase gold holdings as it is not possible for the country to buy large amounts of the metal within a short time.

[Letsbereal]

Gold Imports by India Already Top 2009 as Consumers Boost Jewelry Buying
17 November 2010, by Madelene Pearson (Bloomberg)
http://www.bloomberg.com/news/2010-11-17/gold-imports-by-india-the-metal-s-largest-consumer-surpass-2009-levels.html

Excerpt:

Gold imports this year by India, the largest consumer, have already exceeded 2009 levels as consumers boost jewelry purchases, according to the World Gold Council.

Imports totaled 624 metric tons by the end of the third quarter, compared with 559 tons in all of 2009, according to data released in a report by the London-based industry group today. India bought 214 tons in the third quarter, up from 176 tons a year earlier, it said.

Jewelry demand in India surged 36 percent in the third quarter even as gold prices gained, the council said. Bullion futures in New York reached a record $1,424.30 on Nov. 9 and are up 22 percent this year.

[Letsbereal]

India gold ETF volumes almost double in Oct on yr
17 November 2010, (Reuters - News Center)
http://www.moneycontrol.com/news/commodities/india-gold-etf-volumes-almost-doubleoctyr_499784.html

Excerpt:

India's gold collections under exchange traded funds almost doubled in October to 13.999 tonne on year, indicating sustained interest in the yellow metal from investors, data from the funds showed.

----

Though gold collections under ETFs are growing, they remain miniscule against India's imports of about 400-800 tonne annually.

Gold ETFs, instruments that can be traded like shares and are backed by physical gold holdings are more than three years old and the segment may get crowded with some other funds planning to enter.

[Letsbereal]

Why People Don't Buy Gold
http://www.youtube.com/watch?v=Yjr7NtntWeQ

[Letsbereal]

World Gold Council Releases Third Quarter Gold Market Outlook
17 November 2010, by Tyler Durden (Zero Hedge)
http://www.zerohedge.com/article/world-gold-council-releases-third-quarter-gold-market-outlook

Excerpt:

The WGC has released its complete Third Quarter gold market outlook.

To summarize: major demand is seen out of China and India, whose surging populations will buy ever more PM due to "rising income levels, high savings rates and strong economic growth."

Demand is seen coming from the jewelry sector, as well as from institutions, including central banks, and a jump in industrial demand "on the back of renewed growth in the electronics industry, due to the majority of semi-conductors being wired by gold."

Nonetheless, even as demand continues growing, supply is rising as well: "On the supply side, we reiterate our projection that total mine supply is likely to trend higher.

This is due to mine project expansions, a ramping up of production to meet the recovery in gold demand and the diminishing scope for producer de-hedging in 2010.

Higher supply is also expected to come from China, Australia and US, although this  may be partially offset by lower output from countries such as South Africa and Peru due to declining ore grades and rising costs."

Ultimately, the only important question is whether QE will ever end.

Anything less than a Yes answer, means there is virtually no upside limit to gold, absent an occasional correction.

[Letsbereal]

SocGen Explains How To Value Gold And Why You Want To Own It
17 November 2010, by Gregory White (Business Insider)
http://www.businessinsider.com/societe-generale-explains-how-to-value-gold-2010-11

Societe Generale have put together a report on how to value gold, in comparison with a variety of other assets and market influencers.

The breakdown looks at the relationship between gold and multiple currencies, between gold and dollar debasement, gold and inflation, and gold and the bond market.

For anyone interesting in investing in the asset, the breakdown offers a clear view of the reasons you may want to invest in gold and some of the influencers you need watch before you jump in.

Click here for the charts >

[Letsbereal]

Bob Chapman: http://www.theinternationalforecaster.com/International_Forecaster_Weekly/Gold_Silver_And_Commodities_Likely_Safer

"Conservative analysts and economists are thinking in terms of $3,000 gold, and $100 silver and a CRB of 400.

Why shouldn’t they? Official inflation since 1980 would reflect gold at $2,400. Real inflation based on 1980s formula would mean gold should be selling at $7,700 an ounce"

[Letsbereal]

Gold miners dehedge by 2 mln ounces: report
18 november 2010, by Claudia Assis (MarketWatch)
http://www.marketwatch.com/story/gold-miners-dehedge-by-2-mln-ounces-report-2010-11-18

Precious-metals miners took 2 million ounces of gold hedges off their books in the third quarter, bringing hedges to 5.5 million ounces, according to a report published Thursday by VM Group/Haliburton Minerals Services and ABN AMRO.

Dehedging -- unwinding contracts to sell gold a set price in the future to take advantage of higher prices -- was led by AngloGold Ashanti, which closed much its gold hedge positions earlier in the quarter.

"The hedge book would have fallen by another 1.37 (million ounces) had AngloGold managed to close out all its positions, but this occurred in the first week of October and will therefore show in our (fourth quarter 2010) Gold Hedging Report," the companies said.

Little new hedging took place in the third quarter, the report added.

[agentbluescreen]

Bob Chapman: http://www.theinternationalforecaster.com/International_Forecaster_Weekly/Gold_Silver_And_Commodities_Likely_Safer

"Conservative analysts and economists are thinking in terms of $3,000 gold, and $100 silver and a CRB of 400.

Why shouldn’t they? Official inflation since 1980 would reflect gold at $2,400. Real inflation based on 1980s formula would mean gold should be selling at $7,700 an ounce"

But to monetize-away their $18 trillion in debts down to something even remotely manageable a 50¢ rented, private Federal-Rothschild ducat (=$3k gold) would only devalue it away by half when they really need at least a 25¢ rented casino-ducat to even come close.

$6k gold= a 75% monetary labor exchange currency pay-cut folks...

[Letsbereal]

James Turk - Delta-Hedging to Cause Gold Price to Explode
18 november 2010, by Eric King (King World News)
http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2010/11/18_James_Turk_-_Delta-Hedging_to_Cause_Gold_Price_to_Explode.html

Excerpt:

With gold and silver taking off to the upside, King World News interviewed James Turk today out of Spain. Turk commented, “What we are seeing right now is the breaking apart of the gold cartel.  They are losing control of the market just like they did back in the late 1960’s when gold began trading above $35 in the cash market in London, even though the price was still officially fixed at $35.  The market was simply saying, we just don’t believe this $35 price anymore.”

Turk continues:

“The same principle applies today.  The same group that is trying to hold the price down is being overrun just like they were in the late 1960’s. Normally you would expect the gold market to fade into next week’s options expiry.  The fact that we are so strong today is an indication that the shorts are being overwhelmed and I am looking for higher prices as a result.

This could be explosive over the next few days if the shorts have to start buying because of delta-hedging on the calls that they have written. In other words, the more the price of gold rises, the more they have to buy.  This can be a vicious cycle that feeds upon itself causing prices to explode.

----

What Turk is saying is the the gold cartel is on the verge of suffering a major defeat in the gold war. With regards to silver, let’s just say they have been defeated and are now in the process of a full retreat.

[Letsbereal]

It's Not Just The West Buying Gold, China And India Are Driving Demand Too
18 November 2010, by Frank Holmes, U.S. Global Investors (Business Insider)
http://www.businessinsider.com/india-and-china-continue-to-drive-gold-demand-2010-11

Excerpt:

The World Gold Council’s (WGC) latest quarterly recap shows global gold demand is getting stronger despite rising gold prices.

Gold rose 28% to record the highest average price for a quarter ever at $1,226.75 an ounce, while gold demand jumped 12% on a year-over-year basis to 921.8 tons during the quarter.

Jewelry demand, which increased 8% on a year-over-year basis, accounted for 57% of overall demand, while investment demand rose 19% to account for 31% of total demand.

It appears consumers and investors, especially in India, China, Russia and Turkey, are growing accustomed to higher gold prices.

At the end of the third quarter, gold demand in India had already exceeded that of 2009 and demand levels in China are ahead of last year’s pace.

----

Investment demand rose despite a 7% decline in investment in ETFs, which has been the biggest driver in investment demand of late.

Chinese investors seeking protection from rising interest rates directed a considerable portion of their savings into gold products, causing demand for gold bars to jump 44%. Net retail investment in China reached 45 tons, breaking the previous record of 40 tons set in the first quarter of 2010.

We’ve said this many times, as the economy recovers and per capita incomes in countries such as China and India rise, consumers and investors within those countries will likely see gold as a key investment vehicle because of the cultural connection carried over thousands of years.

[Letsbereal]

Joe Weisenthal: Why I Was 100% Wrong On Gold
19 November 2010, by Joe Weisenthal (Business Insider)
http://www.businessinsider.com/why-i-was-100-wrong-on-gold-2010-11

Excerpt:

"The gold hater."

That's what Robert Wenzel of EconomicPolicyJournal calls me, and a lot of commenters here feel the same way because over time I've voiced skepticism about the role of gold in a modern monetary system, and I don't have a blood-curdling hatred for the Fed.

----

So where did I go wrong? After all, all those pro-gold arguments make a fair amount of sense.

The problem is, I misunderstood the real nature of the real way the precious metal is trading. It's a high-beta stock.

Here's an update to the chart we posted yesterday, comparing the silver ETF to Apple (also a big high-beta name). That's kind of weird, isn't it? Gold is similar



Here's the GLD vs. the S&P 500. Notice some similarities:



So my being wrong about gold was basically a function of misunderstanding how it was trading.

Historically gold probably moved in some ways with the money supply and other aspects, but thanks in large part to the outsize presence of ETFs, it's basically a high-beta stock. Not so mysterious.

Click here for SocGen's guide to valuing gold >

[Letsbereal]

Jim Sinclair - This is Late 1979, Gold Will Rise Violently
18 November 2010, by Eric King (King World News)
http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2010/11/18_Jim_Sinclair_-_This_is_Late_1979,_Gold_Will_Rise_Violently.html

Excerpt:

With gold heading higher today, King World News interviewed legendary trader Jim Sinclair. When asked about the action in gold Sinclair stated, “We have to be right in front of a major move in gold. Today the gold market had all of the indications of what would be considered by the old-time traders (Bert Seligman & Jesse Livermore) as a major turn. This would be a sign to them that the bulls are gaining strength in the market, and given any excuse it will rise violently.”

Sinclair continues:

“The strategy now would not be to run after spikes and strength, but to begin to take in those periods which will certainly come, of weakness that exist during the day. This is really the first time since we came off of the high, that it’s starting to show a character of wanting to make a new high.

----

Getting back to gold, this is late 1979.  It’s got all of the characteristics of late 1979. If people will go back and look at the long chart they’ll see that there was one violent flip right before it took off and never looked back.  And it’s getting very close to that point now.  I think what you have seen is a major shake of the tree right before gold takes off.”

Well there you have it from Jim Sinclair, who’s father was business partners with legendary Jesse Livermore. The green light has been given to the upside by one of the great ones, so sit back and enjoy the show.

[Letsbereal]

While The U.S. Prints And Spends, Russia Loads The Boat With Gold...
20 November 2010, by Dave (The Golden Truth)
http://truthingold.blogspot.com/2010/11/while-us-prints-and-spends-russia-loads.html

Excerpt:

This chart is sourced from Casey Research, Ed Steer's Gold and Silver Daily. The Russian Central Bank purchased another 600k ozs of gold in October (some is purchased on the open market, some is purchased from internal mining production). I think the message of this chart, combined with China's demure announcement about accumulating a lot more gold, is pretty clear:

Get ready for some kind of gold-based currency standard at some point down the road.



(click on chart to enlarge)

[Letsbereal]

Gold Price Suppression Part 1 - Peter Schiff Radio - Adrian Douglas Interview - 11/19/10
http://www.youtube.com/watch?v=7BQAQyXZJXU

Gold Price Suppression Part 2 - Peter Schiff Radio - Adrian Douglas Interview - 11/19/10
http://www.youtube.com/watch?v=VoztjUbIRxk

[Letsbereal]

Jim Rickards Discusses $4,000 Gold on CNBC
http://www.youtube.com/watch?v=St7TF8q0T18

[Amos]

that's low,

[Letsbereal]

Gold Bubble Expands as ETPs Hold 9 Years of U.S. Output
22 November 2010, by Nicholas Larkin and Pham-Duy Nguyen (Bloomberg)
http://www.bloomberg.com/news/2010-11-22/soros-gold-bubble-expanding-as-etps-hold-9-years-of-u-s-output.html

Excerpt:

Gold’s 23% surge this year to a record is proving no deterrent to George Soros, John Paulson and Paul Touradji, whose investments signal more gains for the longest winning streak in at least nine decades.

Securities and Exchange Commission filings this month by Soros Fund Management LLC, Paulson & Co. and Touradji Capital Management LP listed investments in gold as their biggest holdings. Exchange-traded products own 2,088 metric tons, equal to nine years of U.S. mine supply, data compiled by Bloomberg show. Precious metals will produce the best commodity returns in the next year, Goldman Sachs Group Inc. said in a Nov. 9 report.

The purchases show how investors are snapping up hard assets as governments and central banks led by the Federal Reserve pump more than $2 trillion into the world financial system. Gold in exchange-traded products, as much as half of which may be held by individual investors according to BlackRock Inc., is equal to more bullion than the official reserves of every country except the U.S., Germany, Italy and France.

“People who are selling gold here are making a big mistake,” said Michael Pento, a senior economist at Euro Pacific Capital Inc. in New York who correctly predicted gold’s highs the past two years. “The gold bull market will end when real interest rates become positive and we’re very far away from that. The Fed believes it’s going to have to print more money to keep real interest rates from rising and rescue the economy.”

Interest Rates

Gold gained 87% since September 2007 when the Fed began cutting benchmark interest rates and global credit markets started to falter. The Standard & Poor’s 500 Index of shares is down 21% since then, even after last year jumping 23%, the most since 2003. The Fed has kept its benchmark interest rate near zero since December 2008 and plans to pump another $600 billion into the economy through June by purchasing government bonds, a program known as quantitative easing.

The central bank bought $1.7 trillion of securities in a first phase that ended in March. The U.S. Dollar Index, tracking the currency against six counterparts, slumped 8.5% in the third quarter, the most in eight years.

“QE2 just further strengthens the already strong market for hard assets like gold,” said Michael Cuggino, who helps manage $9 billion at Permanent Portfolio Funds in San Francisco, and has about 20% of his assets in gold. “Real short- term interest rates after inflation are still negative and until that changes, commodities are going to continue to make higher highs.”

Record Price

Gold, which doesn’t pay a dividend, reached a record $1,424.60 an ounce in London on Nov. 9 and was at $1,351.65 at 3:47 p.m. Prices are heading for a 10th consecutive annual gain, the best performance since at least 1920. The S&P 500 Index returned about 9.5% with dividends reinvested, according to data compiled by Bloomberg, and Treasuries returned 7.3% by Nov. 19, a Bank of America Merrill Lynch index shows.

Other precious metals have done better this year. Silver futures rose 61% through Nov. 19 and would have to gain another 85% to reach the record $50.35 an ounce reached in New York in 1980. Palladium advanced 72% in London and would need to add another 60% to match the all-time high of $1,125 an ounce reached in 2001.

Investors bought shares of ETPs representing 1,081 tons of silver worth $945 million since the end of September, according to data from four providers compiled by Bloomberg. Gold in ETPs such as the SPDR Gold Trust, the biggest, fell 9.5 tons. Investors may have considered silver cheap relative to gold and bet that it would benefit from the economic recovery, said Daniel Briesemann, an analyst at Commerzbank AG in Frankfurt.

‘Biggest Drawback’

Industrial applications account for 9% of gold consumption, while for silver it’s about 50% of demand, according to GFMS Ltd., a London-based research firm.

Speculators in Comex gold futures cut their net-long position, or bets on higher prices, by 11% to 218,479 contracts in the week ended Nov. 16, data from the Commodity Futures Trading Commission show. That’s still about 40% more than the average over the last five years.

[Letsbereal]

James Turk - Developing Banking Crisis Bullish For Gold
22 November 2010, by Eric King (King World News)
http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2010/11/22_James_Turk_-_Developing_Banking_Crisis_Bullish_For_Gold.html

With gold and silver consolidating recent gains, King World News interviewed James Tur out of Spain. When asked about the action in both gold and silver Turk stated, “The speed at which the sovereign debt crisis in Europe is accelerating is truly staggering.  The insolvent European governments are causing problems for many banks because of all of the government debt that they own. So, what we really have developing here is a banking crisis which is always bullish for gold.”

Turk continues:

“What should happen here is that the market should hold support and start to rally at the end of the day. The key support is $27.30 on silver and $1,355 on gold. 

You have the cash market constantly trading above futures, so silver is in backwardation which is very bullish. It’s an indication of intense physical demand.

We should be attacking the old highs soon, in a matter of days. I expect the previous highs in both gold and silver to be taken out in short order.”

We have hit your target for the 50 to 52 area on the gold/silver ratio, what is the next target James?

“The next target has to be 40 to 42 which is the level reached after Warren Buffett announced his big silver purchases in 1998. The fact that the ratio has dropped so quickly is an indication that silver is definitley continuing to lead.  Look for $30 soon as as a first stop to higher prices.”

Turk continues to note the intense physical demand which has kept that silver market very tight in terms of supplies.  This has been a classic bull/bear battle, and in the end the underlying physical market has been and will continue to be the determning factor.

[agentbluescreen]

The good Mr. Turk is seldom wrong

Time to pawn off some of that silly gold and get into a nice satchel of silver for a bit...

the gold will still be there...

[Letsbereal]

How gold and not platinum or zinc became our favorite element
(google trans from Dutch) http://tinyurl.com/22uhug2

http://translate.google.com/translate?u=http%3A%2F%2F925.nl%2Farchief%2F2010%2F11%2F22%2Fhoe-goud-ons-favoriete-element-werd&sl=nl&tl=en&hl=&ie=UTF-8

[agentbluescreen]

If what the indicators indicate is true, savers now have the powerful option to consider the resource commodity assets that are most susceptible to a bubble tipping point against debt (bankstas) in the markets. Holders of gold now have a genuine physical leverage advantage against the futures price fixers in precious metals savings markets.

The conversion rate of 50:1 gives gold inestimable physical-mass silver-resource leverage against debt and allows us savers to destroy the short-paper ponzi schemes of the private Fed's fiat-chip casino owners. If gold savers were to massively abandon the pursuit of gold savings-metal now and switch a larger portion of their savings holdings into silver savings-metal we can bankrupt the bankster's corrupt labor-exchange currency "future paper-debt" metals price fixing scheme forever.

The resulting silver "ballon" value-explosion would immediately pop the banksters corrupt, parasitic "debt-currency bubble" slavers-debt currency schemes forever.

Max Keiser may have hit upon the Silver Bullet here...

   BUY SILVER!!

When the ratio gets to 40:1 that portion of your savings will have profited immensely, but more importantly you will have driven a stake into the tyrannical heart of this psychotic, parasitic noble NWO's war-debt empire.

[Letsbereal]

James Turk - Gold Separating From the Dollar
23 November 2010, by Eric King (King World News)
http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2010/11/23_James_Turk_-_Gold_Separating_From_the_Dollar.html

Excerpt:

With gold and silver consolidating recent gains, King World News interviewed James Turk out of London.  When asked about the action in both gold and silver Turk stated, “I think the important point today is that gold has moved back above its short-term moving averages. This should bring a great deal more buying into the market. I was very impressed today that gold was strong in spite of the fact that the US dollar was up a full point.  Jim Sinclair has been bringing up this point, and it looks like he nailed gold separating from the dollar in terms of the action.

----

All in all Eric, problems in Europe have a long way to go. So expect more people to look for safe haven alternatives. This will be yet another catalyst to propel gold and silver much higher.

Silver had a bit of a breather today, and the gold/silver ratio went back up to test resistance at 50. It may work sideways for another day or two, but look for 48.5 to be taken out soon on the way to 40 to 42. I am watching that 48.5 level carefully because when we see that fall it will most likely occur as silver is making a new high above $29.30.

The important thing here is that gold was up significantly today, and as I see it that strength is an indication that both metals are ready to rocket higher. I want people to focus on the fact that as good as it has been for everyone who has owned gold and silver, there is still a lot left on the upside.” 

As always, keep things simple and continue to accumulate gold and silver on weakness. When you are scheduled to make monthly purchases, don’t worry about the price or timing the market.

[Letsbereal]

BIS gold records may facilitate double counting, study concludes
24 November 2010, by Chris Powell (Gata)
http://www.gata.org/node/9331

Dear Friend of GATA and Gold (and Silver):

The gold records and accounting procedures of the Bank for International Settlements, the central bank of the central banks, are ambiguous and confusing and seem to facilitate the double counting of central bank gold amid gold shortages, GATA researcher Robert Lambourne concludes in a study presented to the Gold Symposium in Sydney, Australia, on November 9. Lambourne's study Doc here: http://www.gata.org/files/Lambourne-BISGold-11-09-2010.doc

[Letsbereal]

“You cannot find a bank safe deposit box in Germany because every single one has already been taken and stuffed with gold and silver.

It is like an underground Switzerland within our borders.

People have terrible memories of 1948 and 1923 when they lost their savings.”


From: EU rescue costs start to threaten Germany itself
26 November 2010, by Ambrose Evans-Pritchard (The Telegraph)
http://www.telegraph.co.uk/finance/financetopics/financialcrisis/8160999/EU-rescue-costs-start-to-threaten-Germany-itself.html

[Letsbereal]

“… his comment on his long-term gold point-and-figure chart, which shows that he issued a “buy” signal in November 2008, is unflinching:

“We’re still riding out all declines as buying opportunities.” ”


From: Coming competing currency devaluations – Letter that was right about rare earths offers another big idea
25 November 2010, by Peter Brimelow (MarketWatch)
http://www.marketwatch.com/story/coming-competing-currency-devaluations-2010-11-25

[Letsbereal]

Gold will explode and financial system will be rearranged, McEwen tells KWN
26 November 2010, by Eric King (King World News)
http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2010/11/26_Rob_McEwen_-_Gold_Mania%2C_Then_a_Re-Writing_of_the_System.html

Excerpt:

“The consumer, the government and the corporations are loaded up with debt.

The tax base is weak, and we have one creditor that is very nervous, Asia.

China and Japan are looking at the issuance of currency, and the monetary expansion and saying to Washington, ‘You’ve got to slow down because the dollars we are holding, and we hold a lot of them, you’re making them worth less.’

And there could come a day when those lenders will say we will no longer accept the dollar, and you get into a situation where the government ends up and it has already started buying its own debt.”


The Beginning Of The Ponzi End: As Of Today, The Biggest Holder Of US Debt Is Ben Bernanke
22 November 2010, by Tyler Durden (Zero Hedge)
http://www.zerohedge.com/article/today-biggest-holder-us-debt-united-states-america

Well, folks, it’s official – mark November 22, 2010 in your calendars – today is the day the Ponzi starts in earnest.