Still looks like dead money.....

Dollar broke 74 convincingly, and gold is fighting for every tick higher. It is now up $7.50, which I think is a joke. Ben just told Congress to look for bank failures. That's healthy for an economy.


At least the gold stocks are acting well as a whole. But there are certain names the shorts are all over such as PAAS, SSRI, GOLD and MFN. Silver is ripping at 19.75!! OYYYYY....to still have those contracts I bot at $6! Oh well, I still have my phyical.

The dollar may break 74

If you remember, I wrote that gold is dead money unless something spectacular happens like the dollar index breaks 74. As I write this, the index (DXY) is hovering around yesterday's low of 74.08. If the dollar breaks 74, gold may become "live money" and really take off. Note the word "may".


Like Dan from www.jsmineset.com I watch gold tick by tick and there is none, zero, zip, doubt in my mind that it is being capped. Every rally yesterday was sold. Now that being said, every dip was being bought. Thus, the definition of dead money. You may ask yourself, "self, if Neal says it's dead money, why is the price going higher?"

Good question. I will answer "self, because if it wasn't dead money, gold would be a lot, and I mean A LOT higher. The economic numbers are downright dreadful and Ben said he plans on cutting rates even more to stoke inflation.

Gold is up about $2 as I write this which is $8 off the lows. But, IMO, way lower than where it should be.


As usual all roads point to gold, except the road is turning into a express lane on the highway only there are cops all around so you have to observe the speed limit.

Euorpe tried.......

Spot gold hit $965 coming into Europe where as usual it got the smackdown, as they hit for a quick $10 (believe it or not). However, buying came back in pushing it back up.

These guys are not going to give up until gold is convincingly through $1,000. The dollar is tanking again, and Bernanke speaks later so that means the Exchange Stablization Fund will be stepping in to prop up the dollar. Can't have the dollar at record lows (already 20bps off the lows) while Ben speaks.

Silver is on another absolute tear, hitting $19.50 before falling back a little. Oil hit $102 before falling back.


These certainly are interesting times.

Even better.....

Just took a look at the gold price....nice! Up $7 to $955 and silver over $19. SWEET.

It's a start I a guess............................

Gold, today, had an ok day, closing up $11. I say ok, because given everything else that went on, it should have been up much more. You would think with the dollar cracking to new lows, oil hitting a record high, wheat up a ton more, the CRB hitting a new high, and silver hitting a 27 year high, gold would have been up $25. This is what I mean by dead money. While not a bad day by any stretch, gold by all means should have hit a new high today, however, the looming IMF sales, IMO, puts a cap on the price, which is exactly what it is intended to do. However, anyone with a brain knows this effect will only be temporary.

Now, if you remember, last night I said, that barring anything extraordinary happening, gold gains would be limited. I think the dollar breaking to new lows (the Euro went over $1.50 for the first time) qualifies as extraordinary. Combine that with record oil and silver, along with the terrible economic data we got today, and gold, could, COULD power higher.

IBM, today raised their 2008 guidance, and that was all the market need to hear as it was off to the races as the market broke out of a recent trading range to the upside. I have two schools of thought here, the first being, that the market is a discounting vehicle usually looking out six months from now. The market is now telling us everything is going to be fine and dandy. Second, the bulls are absolutely nuts and will get crushed when the short covering and/or bullish wishful thinking ends. Put me in the latter camp. I think we get crushed. There is no way in hell stocks can keep powering higher with $100+ oil and the CRB at record highs. It's scary that so few have an idea of the food inflation that is about to come down the pike.

On top of this inflationary scenario, Fed head Fisher was out saying that growth is more important that inflation, all but guaranteeing more interest rate cuts. This is another reason the dollar tanked and gold SHOULD HAVE gone much higher that it did. Unbelievable the fed is going to cut rates again with these market conditions, but I guess the balls have to be kept in the air for as long as they can.

I have only good things to say about silver. WOW, that has been some advance over the last two days. There is a school of thought that goes when silver outpaces gold the way it has the last couple of days that gold plays catch up. You know my feelings as to why I don't think it will. Please understand that I am not saying the gold story is over and to sell everything you have. I still think gold goes to $1600+ eventually but will take that much longer now, because of the IMF gold sales. And the big joke is, we all know the gold is never going to hit the market, it will be snapped up by some country drowning in dollars. But, the black boxes, and the nervous longs don't care and will sell at any weakness.

In all, today was a good start in overcoming the IMF sales. But, including yesterday, gold is up a net of $4 and that is very disappointing given everything that went on. Well, at least the gold stocks had a nice day today. I keep telling my self, more than ever, all roads point to gold.

I still haven't decided if I am going to go to the Sinclair conference on Friday. I would love to go, as I think the information Sinclair would share is invaluable, but that would mean having to drive to JFK, which is about 90 minutes from my house, without traffic, fly to Buffalo, and drive into Toronto; it's a lot to do just for a three hour meeting. Is Toronto a cool city? I was only there once for a couple of hours, as I killed some time after seeing a client in Buffalo. Someone please let me know.

This is what I mean by dead money.....

Dollar tanking, stagflation running rampant, silver ripping higher and gold is down $2 (yes, I know it was down $8 at one point).


This is what I mean by gold is dead money until the IMF debacle is cleared up.

Strap in, this one is going to be a classic......

Gold, having been screwed yet again, bounced off of $952 in Asia, where is got flattened coming into Euorope. When the Crimex opened, gold was up a couple of bucks when all of a sudden it was decided by Treasury's undersecretary for international affairs, David McCormick, that Congress would be open for the IMF to sell some of it's gold. Well before you could say "crock of shit" gold was off $10. (The second I saw that headline, I dumped all my gold stocks except for NSU, and went short a boat load of GDX).

On how many levels is this a farcical attempt to cap gold? First, any large seller of any security in the world would not make his intention known. Why suppress the price? Second, does anyone who knows even a little about gold, really think the IMF gold is going to hit the market as I am sure China, Russia, and all the Middle Eastern CB's are drooling over buying this gold. Third, how desperate are they getting?

This is clearly meant to put a cap on gold and in my opinion they have succeeded. I think gold will be dead money until the sales are cleared up (barring anything extremely disastrous happening---like the dollar breaking 74). I think anytime gold even thinks about lifting, you will see a well planted story about the upcoming sales.

Like I said, this would be hilarious if it didn't prevent the gold bugs from making money. Gold is the only commodity in the world that has to go through this shit. And even though I made money in the gold arena today, it is not the way I like to do so. I hate making money from the short side, I much prefer to be long as I believe that is the correct direction in which gold should be travelling. In a few years, when the USA is on the mend, and there won't be a need for gold, then I plan on making money from the short side. But not now.

There have been many days that stand out in my memory where the gold bugs have been absolutely fucked. First and foremost is the day about a year ago, where China raised rates and gold was down $2 in the Crimex session only to fall $25 in 7 minutes in the electronic session. Second, are the jobs Friday where the news is absolutely terrible and gold goes down when the dollar reverses. I think today (actually since the IMF announced the sales) comes in third.

I will say, the fact that gold was only down $6 and HUI up $2 is a good sign. Normally, you would expect gold to have been down $20 and the HUI down 25, at least. (I had covered my GDX short for a nice profit, and was only long NSU. At the close I bot a little GOLD as that is normally up in the mornings, no matter what gold is doing--it's a trading position).

Look, I know the IMF gold sales are long term bullish, and they are morons and always sell right before a huge spike higher, or at the start of a bull market. I just hate getting robbed like this. Keep in mind, I own a lot of bullion and my retirement accounts are loaded with gold stocks as I don't trade those accounts. Those accounts get hurt. And do I mention that gold and the stocks missed out on yet another stock market rally today?

The fundamentals are so perfect for gold and getting better every day. Food prices are skyrocketing, growth is slowing, and most importantly more and more currency is being created every day. On one hand, the CB's of the world create this mess and on the other hand, they prevent the one security that should be benefiting from this mess. As usual, all roads point to gold, no matter how many road blocks they throw up.

On a side not, how many folks are schlepping up to Toronto to hear Sinclair speak? I would love to go, I just wish he gave more advance notice as airfare is an arm an a leg. If you are going, let me know.

On the bright side......

This fully planned attempt at knocking gold down has only resulted in bringing it down around $8 on the Crimex. (Even though every attempt at a lift was meant with selling).

In the past, gold would have been down at least $20 on this news.


These guys are desperate and it is showing.

They win again......Gold is dead money......

Well, they win again. It was just announced that Congress will prolly approve some IMF gold sales and of course gold is now down $11 on the news. IMO, gold is dead money until these sales are cleared up. So what that not once ounce of gold from the IMF will hit the open market. The goal of suppressing the price has been accomplished. I am short and will get shorter.


I hope anyone who had a doubt about how controlled and fixed the gold market really is now clear on how the market works.

No Reindeer games for the gold bugs.....

So, gold hit $953 overnight in Asia, however, as is par for the course, it came into NY up $1, and soon after got trounced for a quick $10 as oil took a little spill and the market got beat up. However, gold found some sack and made a nice little comeback to only down a few dollars, and in fact at one point was up a few bucks. However, this being gold, it didn't last and we were back down $5. The market was getting hammered when CNBC broke the story that Jesus Christ hisself was coming either Monday or Tuesday of next week, I mean that Ambac might be getting bailed out one of those two days. Well, like an illegal running for the border, the market reversed some 200 points in about half an hour, while gold managed to only be down $1.70. I guess that in itself wasn't terrible, but when you compare it to almost every other commodity out there that was higher, it is. Gold stocks which sucked the big one hard early, closed down a few points.

Sigh. I am getting tired of this. Why doesn't the CRIMEX just chop $300 off the POG and call it a day. It would be a lot quicker, a lot less painful, and this way they wouldn't have to pretend anymore that the market is fair and equitable. Really, I mean it. On Monday, lets just start with gold at $648 and go from there.

The gold stocks just officially suck monkey balls. Never in my years of trading have a seen such a sorry bunch of companies who's underlying commodity screams higher, while the stocks do shit. It would be laughable if it wasn't so sad.

So, if Ambac gets the bailout plan on Mon or Tues. all is well with the financial world correct? The suprime exposure will just go away as will the credit derivatives? Please, our problems are just beginning. Suprime has now affected almost every aspect of the economy from the mortgage exposure to the Auction Rate Security failures. And I am supposed to believe just because a few billion get pumped into Ambac, all is well? The bottom line is that because Ambac and MBIA get to keep their AAA rating, all this derivative shit won't go kablooey and the banks can value them at whatever rate is believable. That in a nutshell is why it's important for the mono line insurers to keep the fabled AAA rating. It is a myth.

Oh, but what about the municipal market, don't they need the insurers? No! Municipal insurance is a croc of shit[ why do you think Buffet wants in so bad on the business? Most muni bonds that are insured really don't need the insurance. Do you really think NYC is going to default on their debt? Or California. You can read all you want about municipality disasters, but the bottom line is General Obligation debt does not default. Neither do Sewers, Municipal Utility Authority's or other type government sponsored vehicles (in the muni world, that is).

Where muni insurance is needed, is in the private purpose sector, insuring bonds such as hospitals or for corporations that may want to issue tax free debt under a state's economic developments' authority.

For 15 years, I was a bond salesman selling mostly to a retail clientelle. Retail clients love insurance as they truly believe the AAA crap. No matter how hard I tried to convince them about buying state or city issued G.O's, they had to have the insurance. Let me tell you, when there was a major city like Detroit, Philadelphia, Bridgeport CT or Washington D.C., I couldn't sell enough of their G.O. bonds. I remember selling Philly G.O.'s at 9% triple tax free for PA residents. At the time, these bonds were CCC, which is about as shitty as they get. I had no worries as the smart money knew the state of Pa would not let the biggest city in the state go belly up. I was selling D.C. paper at 8% under the same premise. Would the Federal Gov't really let it's own capital declare ch 9 which is the municipal equivalent of ch 11. Of course not.

That is why everything you hear about munis is a crock. Believe me, the smart money was buying the Port Authority of NY ARS bonds at 20%. Why wouldn't they? The Authority is rated AA on their own. The bonds are dollar good. If I was still selling bonds, and the quality paper had a very nice yield on it, I would be selling it like it was going out of style. Munis are nto the problem, that situation will get itself worked out one way or the other. It is the subprime shit that has everyone freaked out, and is the reason why we need to pretend that MBIA and AMBAC are still AAA. It's to save the banks. But the banks may be beyond saving at this point.

Gold getting capped yet again....

After hitting an overnight high of $953, gold is now flat with the dollar falling apart and crude ripping.


I gave a lot of thought about Dan's blurb about GLD lending out gold, and the more I thought about it, the more I agreed. Where else, would the cartel get the ammo to keep shorting the market? Why hasn't GLD's tonnage risen along with the price? Inquring minds want to know NOW!

And so the bailouts begin.........

http://www.nytimes.com/2008/02/22/business/22homes.html?hp


No surprise here. If this comes to pass, it is extremely dollar negative.

Read Dan's latest post.....

Over at www.jsmineset.com


There was always something that I did not like about GLD. I think Dan has hit the nail on the head.

This is a pain in the ass........

And I am not talking about the bullshit action in gold and the gold stocks today. No, I am talking about how Kitco is no longer using the CRIMEX trading hours to price spot. They are now ending the trading day at 6pm and it is a royal pain in the ass to tell what is what. For example, I was showing gold up $12 for the April contract, yet "spot" was up $3. It is annoying, I wish they would go back to showing spot beginning at 8:30am and ending at 1:30pm.

Anyway, today was another cluster fuck in regards to the gold stocks as for the most part they acted their usual shitty selves, again. The standouts were GG and AUY along with a nice performance by MFN. GG, AEM, ABX all had nice earnings for once. Not so much for NEM.

Gold almost hit $960, but as usual got capped midway through the day when oil started to sell off dramatically. Of course the desperate bears painted gold to close below $950. Silver, went over $18 but it too closed the day lower at $17.90.

The dollar was getting blasted when the Philly Fed was announced to be the worst in 18 years. It was a disaster, and another example of the financial Armageddon that is coming. The number only made the dollar fall faster. I would assume as the Euro approaches $1.49, yet again, the ESF will step back in. This of course will get the morons on TV saying how the dollar is rebounding because the Fed cuts will give the economy strength it needs to pull itself out of the doldrums. It will be some line of bullshit like that.

By any measure gold should be well over $1000 by now and the HUI should be at record highs. The fact that both are not, is testament to the bullshit that goes on in both markets. I know, I know, you are tired of reading this, as I am writing it. But, am I wrong? Is there a reason why gold keeps getting capped? Today, as per usual NY activity, gold gave back 2/3 of its gains? Why? Oil? Weak market? Gold should be standing on its own. I didn't see Plat or palladium give back the bulk of it's gains, why did gold?

In other news, T. Boone Pickens, who is basically the Jim Sinclair of the oil world, was on CNBC this morning and announced that he is now short oil as he expects it to fall back to around $85 in the second quarter. He should prolly be listened too since he called $100 oil since it was at $60.

Speaking of CNBC, my boy Guy Adami, once again slammed gold tonight, saying that he still doesn't like the gold story but if "you had to be in gold" he would be long GLD. He also slammed NEM as being too expensive. Funny, but no mention of how his gold $700 call was dead wrong, no his recommendation of NILE some 25 points higher.

Sighhhh................maybe one day gold and the gold stocks will stand on their own two feet. (Hey whaddya know, my spell checker is working!!)

Capped again.....

A little late on this but, gold was capped under $950 on the CRIMEX. These assholes never give up do they?

Now at 3:10pm gold has given back almost 2/3 of it's gains. It never ends, does it?

Once again, screwed hard......

Real quickly, dollar getting crushed, inflation running rampant and gold up $10 on the April contact, and thats $11 off the highs. Gold stocks are acting their usual shitty selves with AEM, which at one point was up $2, now down $1. GOLD has been down all day. The shorts really never give up do they? Oh yeah, SSRI decided to milk the teats of the shareholders with a $120mm covertible.

Still grumpy.....

I don't know what it is, but I am still grumpy about this move in gold and in particular the gold stocks. Why in the world was gold down $13 earlier in the day? Why the F' was the dollar screaming higher today? Why couldn't the gold stocks catch a bid until late in the day? These are questions I want answers to! I am not overlooking the important fact that gold hit an all time high today, but it still galls me that we are so far way from an inflation adjusted high.

So the morning started off with gold crashing hard once the CRIMEX opened; no surprise there as they capped the market under $930 last night so they prolly thought, what the hell, let's run the stops. At one point gold was down $13, the dollar was screaming on nothing, and oil was down $1+

Maybe the dollar took off when the CPI came in very hot. The thinking is, I guess, that with the higher CPI, the less the Fed would cut. Are they serious? This Fed has already proven what everybody knew, inflation be damned, we need the growth. Say hello to my little friend, stagflation.

When the stock market opened, my latest gold stock tell, AEM, was nicely higher and some other stocks were doing well given that gold was getting squashed. However, as the morning progressed gold made a very nice comeback and around 11:30 gold was flat for the day.

At this time, oil started to catch a bid and that ignited gold higer. After all was said and done, gold was up $16 to close at a new record of $943. The minutes from the last Federal Reserve meeting were released, and to nobody's surpirse, more rate cuts are a comin.' This was like throwing gas on an open fire and really helped gold get to the highs.

Now for the gold stocks. They sucked pretty hard in the early going. At one point, PAAS, announced they had replaced and added to their total reserves and the stock went down on that news! That had to be the biggest joke of the day. GG, NEM, MFN were just several stocks that were down when gold was up $10+. They did finally catch a bid and closed higher when the market took off at the end of the day. However, with gold up $16+, the HUI up 11 on a fairly good market day, is somewhat depressing.

The shorts, CB's, CABAL, and DA BOYZ are trying their hardest to keep this market down. Today, they got a feel of what its like when the market reverses hard against them. Let's hope they may have learned a lesson. HA HA HA, they will be back.

The shorts are all over the place....

Great turnaround in gold. I guess the longs realized that stagflation is gold bullish.

Anywho, gold is now up $7, but the I find it laughable how the gold shorts are attacking several gold stocks. Amazing. PAAS, comes out and says they have increased their proven reserves and the stock goes down on that news? And that's with silver up .25! Give me a f'ing break!

Full jam job in effect.....

Dollar up a ton on absolutely no news, the second the CRIMEX opened gold's losses doubled to the lows of the day (gee, who woulda thunk that?). Strap in kids, they are in full suppres gold move today. (So far anyway.)

Oh, the inflation numbers just came in and were extremely bearish (high). And gold goes to the lows?

Now down $9+. This is going to be the type of day where:

1. Any sort of lift will be met with selling.
2. Gold prolly closes on the low
3. Make me think yesterday was a mirage.
4. As usual, no follow through
5. Reminds me why I hate this F#$$% so much.

I dunno, something seems, well, not right.....

First, before I begin my rant, gold had a terrific day, closing up $21 to slightly below $930 on the April contract. It had traded as high as $934 before da boyz came in for a moral victory of knockng the price below resistance at $930. The reasons for this incredible rise were many, pick the one you like most: Oil up $4, China reporting runaway inflation, The Nationalization of Northern Rock, or was it Plat and Palladium continuing their tear to all time highs?

So why do I feel that something wasn't right today? Let me say, I am the kind of guy that like my beer cold, my burgers hot, and my homsexuals falaming! (copyright Homer Simpson) Today, the dollar started the day in the doldrums and for whatever the reason, but par forthe course, rallied to only finish down a few ticks. I would have thought with all that was going on, the dollar would have been crushed. But that's me, I get willd like that. It felt weird to see gold up that much with the dollar basically flat.

The market, for whatever the reason started the day like a ball of fire. However, it was quite clear that the rally would not last as the financials were not rallying along with the rest of the market. The market was nicely higher until oil hit $100 and then the market gave up its gains and finished slightly down. It was very nice to see the gold stocks finally have a nice day as the HUI was up 19 and only two points off its high. However, once again we missed the trifecta of gold, the market and the gold stocks all screaming higher together.

So, was today the start of the push that finally brings gold over $1000? Who knows? Tomorrow we have CPI coming out as well as the Fed minutes so we have to wait and see how those numbers play out. In addition there is still the little matter of resistance levels. I already mentioned how it was capped at below $930 today, so gold has to break and close above that number before we go much higher. The final level of resistance would be the double top of $942. If gold can break that number along with a lower number, I would feel more comfortable.

I dunno, maybe it's because I'm tired that I feel this way, but I know gold had a great day, but it didn't feel like it. And, I had a pretty good day trading, I guess I need to see gold get over $942 convincingly. Either that or a good night's sleep.

Just get it over with......

There are certain things that are just a fact, there is no black or grey areas. For example, if you are a member of the KKK, you are a racist. If you weigh 500lbs, you are overweight. If you never trade a stock from the long side, you are a dedicated short. There is no pretense here, it is, what it is.

Now lets look at the gold market. Over the last few weeks, gold has had every opportunity in the world to break higher, yet it keeps getting capped at whatever level is convient for the CB's and the shorts. What is especially galling is the power situation in South Africa is going to leave the gold market at with a minimum of a 400,000 ounce deficit for 2008. Silly me, but I kinda remember in my college economic classes something about supply demand price type of thingy. Something like a lower supply with equeal or higer demand means higher prices. I guess the gold market never went to college.

But, I guess Platinum and palladium did go to college as those prices are on a constant tear higher. Plat today went over $2100. Now, obviously, plat has gone parabolic and this move will not last. However, where it ends, I have no idea. I have sold some of my palladium rounds into this rip higher. I had been long palladium since $300. Thanks Dave. (With the exception of stealing my neighbors catalytic converters, I have no platinium. My wife won't let me sell her platinum jewellery as she hopes to one day be a sugar momma to Ricardo, our pool boy.)

My point in all this is to get rid of any notion that the gold market is fair, balanced or natural. Take any 100 daily charts of the gold market from 12am to 12pm and you will notice several things. First, the market sells off around 2am. Second, the market sells off around 6am. Third, the market sells off around 8:30am. Fourth, the markets sells off around 1:20pm. Fifth, the market rallies around 2pm. And sixth, the market rallies around 7:30pm. (All times EST).

When a person can accurately time a market to almost the minute, is that an open or controlled market? When all the fundamentals in the world point for a security to go higher ON A
CONSTANT BASIS, and that security fails at several key levels ON A CONSTAINT BASIS, is that a fair market?

I know what a lot of you are thinking: "Neal the gold market is over $900 and you have been spouting the same crap since $600, give it up already!!!!!" I will come back and say, yes it's at $900, but it should be at least at the inflation adjusted price of $2100, and the fact that it's not, given the worldwide economic condition, shows the problems in the market.

Should we know talk about the constant crap that is thrown against the market. First, the announcement last week that the IMF is once again going to sell their gold. No matter that this prolly won't happen as Congress needs to give its approval, the main idea was to put the thought of a 100 tons of gold hitting the market and how that would suppress the market. Mission accomplished.

Second, the constant top callers in the gold market. Jeez, the way I just want to pummel these morons who have absolutely no clue as to why gold is this high in first place and now call for gold's demise. These are the same idiots who have been saying the same things since $400.

Finally, the way gold is portrayed in the media as an investment for morons as it pays nothing and actually costs a few bucks for storage. I dunno, but like I have said, I have been involved with gold since around $375. I am very happy with my bullion and numismatic purchases. In fact my gold, coin, and palladium positions have prolly been my best long term investments ever.

My entire point in this rambling mess, is unlike the KKK guy, who we know is a bona-fide asshole racist, we don't know, officially how controlled the gold market is on a daily basis. And why does this bother me so much? As I have often said, the action in the gold market on a daily basis is akin to someone coming into my house and robbing me. I don't like when either happen.
The market should just get it over with and either sell off back to $400 or just an adopt the bear as their official logo.

A question for y'all........

Now before you answer think about the question.

I am going back forth with a friend about who is in control of the gold market, the bears or the bulls. He says that because we are at $900, the bulls. I say, that $900 in unadjusted inflation terms is a joke. I then listed all the reasons as to why I think the bears are in control"

1. Days/weeks like this where gold can't do anything vs. the fundies.

2. Horrible gold stock action

3. Typical and predictable daily trading patterns of gold


You know what I am talking about.

Under the comment section, please let me know what you think.


Thanks!

Strap in kids, I've got a lot to say......

This has the potential to be a classic Traderneal rant, so strap in and if cursing offends you, skip today's column. You have been warned.

I have been saying for the last couple of years that all roads point to gold and right now the tanks are flying to the endpoint where gold should be exploding to well over $1,000 ounce. Should be is the key word.

Since jobs Friday, we have seen a complete operation in gold where the only purpose is to keep a lid on the price from exploding to above $1000. The Cabal, CB's Da' Boyz, or clueless assholes are running this operation in order to give an appearance that all is well with the worlds finances as a runaway gold prices gives away all the lies that have been foisted upon us.

Today was a classic. Ben goes in front of Congress and says we are willing to cut deeply if we have to. What more does gold need than this? Between Ben's speech today, and Paulson's yesterday where he said that the US gov't is ready to deliver more stimulus if necessary. Well, we all know that more stimulus is going to be necessary and we should all start realizing that rates are going to 1% if not zero. The US is will be Japan in the 90's.

So, a rational, sane person would think this would be extremely bullish for gold, right? No, silly, this is the world's most manipulated, controlled, market on the planet. Yesterday, at it's worse, gold was down $10 while all this crap was going on. And, this was after being nicely higher in Asia the previous night. Guess what, gold, once again, got the smack down delievered to it in Europe. So, after being down, gold managed to claw back to the flat line before closing down around $4.

Today, before Ben's speech, gold once again got the crap kicked out of it as it came into Europe and was down about $5 before Ben spoke. As it became quite clear he was living up to his "helicopter Ben" nickname, gold started to reverse and at its highs was up $5 before giving everything back and closing flat.

Now if gold's action viewed in a vaccum wasn't bad enough, consider almost every precious and non precious metal has been roaring over the last couple of weeks. Platinum has gone over $2,000 an ounce, and palladium is at record highs. Oh yeah, while not a precious metal, oil, which has always been closely linked to gold, is at a five week high, closing over $95 today. Plat, oil, palladium, wheat are all examples of what can happen when markets are allowed to progress unfettered.

In additon to this nauseating action, we have all the top calling morons out saying the top in gold is in. I am so sick of hearing from these people who have absolutely no clue as to what gold is about. It's sickening. At least my boy, Guy Adami, has had zero to say about gold. (BTW, his pick of Blue Nile, which he first recommended at $65, closed today around $40; no word about that either). I can't stomach the reasons they use, from lack of Indian physical buying to deflationary pressures, it makes me crazy.

Now let's talk the other abortion associated with gold, and that would be the gold stocks. In additon to the operation to supress gold, I believe the shorts are having a field day keeping a lid on the gold stocks.

Since the market lows, the gold stocks have squandered countless good days in the market to rally. In fact, there have been several times where gold has been higher and stocks have been whacked. And, god forbid gold has been down a few bucks, well that was cause for the gold stocks to have the shit kicked out of them.

When this ends, I have no idea, but as I said yesterday, I am getting tired of fighting the fight. I really am. It's really not worth the aggrevation anymore. I'm not saying I am selling my bullion or anything drastic like that, but I may stop trading the stocks and the metal itself. It would save me a lot of grief and this way I don't have to be a slave to the price, as I know where it's going long term. I am getting weary of having to play thier games.

You know what, fuck them. At some point these morons who are doing this are going to be the huge losers. They can pull all the bullshit games they want, but they are not powerful enough to fight China, Russia, and the Middle Eastern Central Banks. Hell, they are not even powerful enough to fight the weakness of the US economy.

As usual, all roads point to gold, but this time, all the roads are express lanes.

Ugghh....where to start........

First I have 101 fever, so I was in no mood for gold to be anything other than up $20 let alone down $18 on a completly bullshit day.

First, I knew we were in trouble, when driving in I heard gold was down $8 on a weaker dollar. What up with that? Second, I was thilled, when Savior Buffet offered the world his bailout plan to save the monoline insurers. Someone else put it best when they wrote, "this is like Buffet being an ambulance driver, driving to an accident and taking away the healthy people." The way CNBC was slobbing all over Buffet's knob was downright disgusting.

Soon after the announcement, the S+P futures took off like a bat out of hell, and gold sank even more. But when people realized this plan was only good for Buffet and not the insurers, the dollar started to tank and gold actually came back so it was only down $2. I thought this might not be a bad day after all. How wrong I was.

From the get go the market roared but the gold stocks, as usual, tanked. They tried a brief rally but had absolutely no strength whatsoever. Business as usual in the gold world.

Then all hell broke loose. Gold basically fell off a cliff as the shorts ran through all the sell stops as this was a complete operation, again. I guess the absent minded shorts thought that with Buffet's rescue plan, all was well with the economy. I can't even begin to tell you how many "this is the top in gold" stories I read today. But funny, silver, plat, and wheat had horrible days also, but no articles about them. I am getting tired fighting this fight.

So where to now? The shorts are firmly in control and judging by the action of the gold stocks, I would guess down to prolly retest $890.

Please exscuse me as I am in a Nyqil induced haze. Hopefully, when I come out of this, today will be just a Nyqil dream.

And yet another day where the fix is in.....

Dollar nicely lower, oil flat, market ripping, and gold is down $6, which I guess is better than when it was down $11, but not as nice when it was only down $2. Gold stocks are flat. Once again, the gold stocks miss a chance to rally with the overall market.

Why, besides the obvious capping, is gold down today?

And yet another attempt to suppress gold.....

So the IMF has announced they plan to sell thier gold. For some reason I see this as more of a ploy to try and knock gold down rather than a serious attempt at selling the gold, simply for the reason that if any large holder of a security announces publicly that the holding is for sale, wouldn't that bring a lower price? Does Warren Buffet announce what he is buying before he buys it insuring he pays a higher price? Does he announce what he is selling before he does it to make sure he will get a lower price? This is nuts and clear just another attempt by the CB's of the world to knock gold lower. Jimmy S. has a great response to this maneuver.

Before any of this can happen, the United States Congress must give it's blessing, and that means it first must be presented to them. For whatever the reason, Congress has been very reluctant to sell any gold whatsoever.

Now what happens on Monday? Who knows, but should be interesting. But I think this is clear that the CB's of the world are getting desparate

Jimmy S.: http://www.jsmineset.com/home.asp?RQ=EDL,1&ARFG=1&GID=0&linkid=6

IMF article: http://in.reuters.com/article/businessNews/idINIndia-31847320080209?sp=true

In the IMF article, notice the comment by the Morgan Stanley analyst who says that when the IMF sells the gold they can invest in financial vehicles that give them a cash flow. Man, is gold hated by those that don't understand it at all. Does a six year old bull market mean nothing?

Screw Gold...Get me some Wheat......

For the fifth day in a row, the wheat future contract was lock limit up or .30 higher, that's $1.50 for the week or 12.50% higher. Platinum and palladium also had huge runs this week. See what can happen in an unfettered market?

Gold had a pretty good day yesterday up some $12 on the April contract. Plain and simple, the shorts and naysayers got it wrong. They both thought that when the dollar strengthened, gold would come cracking on down. They were obviously wrong and paid the price and were forced to cover higher. Not to say they didn't try after the CRIMEX opened, but all attempts downward were thwarted by the skyrocketing price in oil and falling dollar.

As for the gold stocks, they certainly did act a lot better. I thought on Thursday, they might be changing their course as they acted better, especially AEM. However, I came in relatively light on Friday, but bot some NEM in the premarket. Needless to say, you can imagine how thrilled I was when NEM tanked on the open as all the other gold stocks went much higher. However, the stocks did "feel" higher, so I acutally doubled down and the ensuing action put a smile on my face.

The shorts have been having a field day with the gold stocks, and like their fellow breathen in the gold shorts, they got shellacked yesterday. Now, the entire non participation in the gold stocks is prolly for two reasons, the first being the short selling and th second is prolly the non believing of the general public that gold is going to stay this high. The gold/XAU ratio is at .20, and that usually indicates a huger rally should start in the stocks. If gold, which, in spite of all my bithing, really has done a wonderful job of not giving back its gains, can stay at this level and move higher, than the gold stocks will follow in suit.

Oh yeah, silver made another new contract high. Silver has been acting quietly great and has really not been noticed by the media.

As usual, all roads still point to gold.

Begrudginly higher....

So driving in this morning, I heard the BOE cut their rates and the ECB did not as apparently Trichet is still talking tough on rates. Not for a second did I think that the dollar wouldn't be lower on these decision. Nevermind the fact that the Fed Funds rate is 3% and the ECB rate is 5%, why let the facts get in the way of a grand operation. However, I also wasn't surprised to hear that gold was up $6 as I have been saying at some point we would see the dollar and gold going higher at the same time. Whether this is the start of that trend, I don't know.

Of course, almost every retailer and his mother reported pretty bad January sales, this coupled with CSCO's blow up from last night had the market looking rather gloomy. Gold of course, at this point, about 10 minutes from the CRIMEX open, was now almost down on the day. (So predictable.)

There is no other way to describe the economy other than it's a complete mess and getting worse. January, over the last few years, has usually been a better month for retail as all the gift cards that were given for Christmas are redeemed. However, this year there are many reports that these gift cards are being used for staples such as food. Not the picture of a robust economy.

Pending home sales were released around 9am and, relativley speaking, they weren't a disaster. This put a bid under the market and off we went.

Gold, flipped and flopped all day. At one point it was up $8, only per the course, it gave it up and was quickly down $4. But later in the day, gold, against the shorts who fought it all the way higher, managed to close up $6, about $4 off the high.

Now the gold stocks on the other hand, acting pretty piss poor the entire day. I still maintain that gold is not through its correction just yet. Call me old fashioned, but I will not change my opinon on this matter until either the gold stocks finally rally or gold corrects more. Both are possibilities. If I miss the initial move, then I miss it. When you trade, opportunities are much easier made up then losses.

Back to the dollar for a second. All I heard today, in print and on TV is how the dollar has bottomed and should go much higher from here. I honestly don't see how it can go higher other than a short squeeze, IMO, we got since the operation began last Friday. I just can't see how the fundamentals of the economy coupled with Helicopter Ben will allow for the dollar to go higher on a sustained basis. Yes, I know things are poor in Europe, but for now, Trichet is still saying that keeping inflation in check is the goal via interest rates. I guess, for now, I believe him. But like any goood CB head, he will prolly cut rates the second the shit really hits the fan.

Speaking of paper tigers, another Fed head came out and hinted that the Fed was done cutting rates. After I recovered from my laughing fit, I read the details, and like every other Fed speaker who is trying to show that the Fed has balls, the speech said that the Fed has to be vigilent when it comes to inflation and that rates are fine where they are.

I am getting tired of saying this every single time, but if the Fed was serious about rates, it WOULD NOT HAVE CUT RATES 1.25 POINTS IN A WEEK WHEN SEVERAL MAJOR COMMODITIES ARE AT ALL TIME HIGHS!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! The Fed would not cut rates in order to just save the stock market.

I will take all wagers that before this is said and done, the Fed Funds rates will be at 1% or lower before this is all said and done. Who is the Fed trying to kid, they are Wall Street's bitch and they know it.

What the hell one more thing.....

Warren Buffet is considered an investing legend. When reports come out that he has taken a stake in a company, that company's stock usually soars. The oppisite happens when he sells out of a company's shares.

Today, Buffet basically came out and said the US dollar, becasue of the US's debts is toast. How did the dollar react to that? It yawned. Another possible point to the dollar getting a little help from its friends?

In a few hours the BOE will decide whether it will cut rates or not. The smart money says they cut as Europe is almost as bad as we are. After that, Trichet will prolly ease up on his hawkish tone on rates and cowtow to the markets. Now, in theory both events are extremely bullish for gold as yet even more liquidity is going to rain down on the planet. But, my playbook for tomorrow, as I am flat all gold stocks with the exception of NSU, if for gold to have a down day, as I would suspect all this "great" news out of Europe will be dollar bullish and we know that means pain for gold. Just another example of the natural element of this market at work.

However, at some point, I would think the dollar and gold will rise up together one day as the liquidity just keeps a comin'. But not just yet.

Is the glass half full or half empty....

You all know my long term views on gold and that my price objective is over $1600. However, I still think that gold could be in a corrective mode short term.

Today, was a classic up day in gold, and by that I mean, gold at it's highs was up $21 only to give back 1/3 of its gains to close up $14. Now, yesterday, gold tried hard to make a stand from the depths, but in the space of 20 minutes or so, slipped $10 to close on the lows of down $18.

This is not the stuff of a natural market. I'm sorry, call me crazy, but I still think this market has teh unseen hand working against it. You can see it in the trading. Did you notice that platinum closed near its highs and palladium closed at the high. Those are perfect examples of true unhindered markets.

Why do I think the gold market constantly has a lid on it? I am glad you asked that. First, look at the trading pattern. Usually higher in Asia to get beat up in Europe and then in NY. Gains almost always seem to be halved, or erased. Losses are almost added to and the close on a bad gold day is on the low. Bad economic news is sometimes bad for gold, and good economic news is almost always disasterous for gold. A free trading security usually has various daytrading patterns.

Second, an out of control gold price signals that something is seriously wrong with the world's economy and the CB's of the world simply cannot let that pass without some serious fight. Why do you think the ECB is constantly dumping gold on the open market? In this type of environment, you would think they might either slow the sales and take advantage of the higher prices. Yeah, yeah, I know they need to sell in order to finance the government, but that's not the only reason. They sell in order to cap the price and slow the ascent.

It's not a secret amongst the world CB's and govt's that we are on the brink or already in a worldwide recession. The situation because of the subprime/derivative situation is only going to get much, much worse. Just look at what's going on, everyday, brings some sort of tale of woe from a major financial institution somewhere. The fact that MBIA and ABK have AAA ratings are a joke. Who doesn't know that the rating aagencies (jokes themselves) are holding off cuting the ratings until some sort of bailout plan is reached. Who doesn't expect that eventually the government will guarantee all the crap that was insured by these companies? Does this sound like something that is not friendly to gold? Does gold have anywhere to go but up over the long term?

The Fed over the last week has cut 1.25 points and that still has not comforted the market. Today, Philly Fedhead had the balls to come out and say the Fed is concerned about inflation. Please, don't insult the Wall Street intelligence like that. That's like the guy who weighs over 400lbs ordering a quarter pounder with cheese but with a diet coke because he is concerned about his weight.

Back to my orginal gloominess about gold. Since last week, I have been warning the readers of this blog that gold was due for a fall because the gold stocks were acting crappy and did not confirm the recent new highs that gold was making on a daily basis. I thought gold would come in like any other overbought security. Then the jobs number hit on Friday and we had all the associated bullshit that went along with that since then (the dollar reversal, yada, yada, yada). Now I am convinced that gold is coming in, not on its own valition, but because some type of program is in operation. What else could explain the drop on absolutley positive news for gold? You tell me.

One other thing that really pisses me off are these jackoffs who are constantly calling for gold's demise. And to make matter worse, most of these topcallers are people who have absolutely zero true knowledge of the metal and how it works. The only things more terrible than these morons are those who profess to be friendly to gold, only to keep calling the tops at every correction. I have seen too many gold experts literally say the move is over when this or that happens. Love me or hate me, I have made it well known and have not wavered from the opinon as to where I think gold is headed over the next few years.

Anywho, I guess being out of the office and working from home does gold well, as overnight, gold was nicely higher coming into NY and built on those gains throughout the day before the typical NY 1/3 giveback. As usual, the gold stocks acted ok, but nothing great. They still are not confirming the move in the metal.

On the positive side, it was nice to see gold give a nice F you to shorts and quickly regain the $900 level so quickly. Whether it can hold that level is another question.

Sell Mortimer SELLLLLLLL................

It is 11:20 pm and gold is up $4.20. Ask me if I don't feel overjoyed. If I had to bet, gold will get the smackdown delivered to it when it hits Europe and then get ole' boot in the ass when it hits the CRIMEX.

But, gold does have one thing going in its favor and that is I will not be in the office tomorrow. Historically, whenever I have been out of the office, gold has done well. We shall see. But, there is a wrinkle in this plan. From about 11am on, for the first time, I will be working from home. I have no clue how gold will react to that.

So, if gold is nicely higher until around 11am, then feel free to blame me.

Gold and the dollar: The one sided markets.......

I really don't even bother to check gold before I go to bed anymore. What's the sense? For the last few weeks it has done what it ever it wants when it comes into Europe and lately it has done nothing but get beat up.

I knew gold was in huge trouble when the first thing I heard driving in this morning was how weak economic conditions are in Europe. That told me the ECB was going to cut and of course that meant the euro was going to be weak. Right I was, as the dollar was very strong and gold was getting clobbered for $15.

So, I arrive at work and I see the futures are down about 3 points, the dollar ripping and gold tripping. Beyond pissed off would be an understatement as to how I felt. Now keep in mind, the only gold position I have on is NSU, as I believe that to be a take over candidate, in fact, I came into the day short. No, I was pissed off because we are in the period where all news is dollar bullish and disasterous for gold. So, if Europe is weak,and the ECB is going to cut, doesn't that mean even more money being poured into the system and isn't that gold bullish? Obviously not.

Ok, the futures were down 3, then all of a sudden they started to tank hard as evidently the ISM number was "leaked" early. Before you could say, "manipulation" the futures were down 12 and falling hard. The ISM was released an hour early and it sucked monkey balls to put it midly. The futures were now down 20.

Now in a rational, natural market, a number this weak would cause the dollar to weaken, as the number clearly indicates the economy is in recession and the FED will have to cut even more. (In fact Merrill came out and said the Fed will cut intra-meeting; forget the fact they cut 1.25 points over the last week). So, did the dollar give up all its gains. No, of course not, remember this is not a natural freely traded vehicle. The dollar gave back a tiny fraction of it's gains. (I bet a coworker a dinner that the dollar would go out on its highs. I can't wait to collect.) That lasted for about five minutes and the dollar weakness was reversed and gold sunk to the lows. The S+P futures were now down 20.

Gold pretty much stayed on its lows for the day until about noon where it slowly tried to crawl out of the pits of zool. It actually was doing a pretty good job and the gold stocks were acting pretty well all day in the face of a market down over 200. Around 1pm, it looked like gold was going to rise to the occassion as it was only down $9 and above $900 while the HUI was only down 6. Then the gold market showed its true colors. Around 1:15pm, the floor fell out of gold. The gains that the market had amassed over the last two hours were gone in 12 minutes. At the close gold finished a hair off the lows of the day, down $18 and gold stocks shit the bed with the HUI down 13+.

What are you going to do? The shorts, the CB's and bullion banks are clearly in control of the market now. This is the part of the gold market that truly embarrasses me. Not only do I have to look at the action today and be disgusted by it, I have to listen to every moron on TV tell me how I should be selling gold here as in a slowing economy gold is useless. Whenever I hear these clueless idiots, I want to through a brick through the TV.

Back to the dollar for a second. On Friday, the jobs number was god awful and the dollar tanked. That was the correct action until five minutes later it was flat. A little later, the ISM came out, slightly better than expected and the dollar took off never to look back for the day. Today, on and attrociously bad number the dollar did not react at all. This is not natural for any type of security. You cannot have a security react, in a natural, freely traded market, react the same way to good and bad news. It is an impossibility.

So where to from here? Prolly down to retest $850, thats where it bottomed two weeks ago before it reversed. However all the fundamentals, more than ever point to gold. When can we look for a turn? My guess is when the gold stocks act better. They acted shitty when gold was doing well, so no reason they shouldn't act well (one day) when gold is puking.

I have made another wager with the same coworker, that is the Fed will bring the Fed Funds down to 1%. Let's see the dollar rally on that.

Sorry for any spelling mistakes, but the spell check seems to be on the fritz.

A dime....a stinkin' dime.....

So, spot manages to close up a dime (the April contract was down $4). So let's review: Gold was higher all night in Asia, gets beat up in Europe as usual, tries a comeback in NY and then gets whacked with the ugly stick to the tune of being down $15. Now, keep in mind, oil was higher all day and the dollar weaker. It was around 1pm, when gold got its mojo going and started to move. The gold stocks have acted better today. Maybe this is the end, but who knows?

Ahhhh...to be in palladium and platinum, those are true natural markets.

Just to be clear....

Just to be clear that this is a complete operation in gold and the dollar; Bush just announced the federal deficit is going to be 3% of GDP, and for 2008 and 2009 the deficits are going to be at record highs. The dollar did not budge on that news and gold is at the lows of the day.

Any questions?

ENOUGH!!!!!!!!!!!!!!!!!!!!

If it wasn't bad enough on Thursday having to read the WSJ article that was screaming gold is the next best thing, I am now starting to read how the Fed rate cuts are good for the dollar as it will eventually lead to a stronger currency. I call shenanigans on this.

The economy, is in horrible shape. housing and the associated subprime/derivative situation is the sword that is going to slice it through the heart. Fed chairmains usually don't cut rates 1.25 points just for shits and giggles. They do it because they see huge problems in the macro economic enviroment. This, is the not the makings of a strong dollar, especially, when for now, the ECB is still talking tough on rates. Now, when the ECB is proven to be a paper tiger also, and they cut rates, then as previously discussed, both the dollar and gold should rise.

The media tried this tact in December, when they also suggested that rate cuts are good for the dollar. At the time, CNBC was the cheerleader for this novel idea; now Bloomberg is suggesting it. Both news outlets completely forget the US government wants a weak dollar in order to lessen the defecit. No matter how many times you hear Paulson rattle on how a strong US dollar in the nations best interests, secretly he is praying for a nice orderly sell off. Orderly, being the key word.

It will never, ever, be proven, but Friday was a jam job by the Exchange Stablization Fund. No way in hell, would the dollar have ever regained its footing on its own, without some outside help. While, the gov't wants to see a weaker dollar, they want it in orderly fashion. It looks bad when the world's lead currency is in freefall. To better understand what happened on Friday, look at it this way. Assume XYZ (the dollar) is a pharmacy company working on cure for cancer. On Friday morning it was announced by the FDA that their cure is no better than a placebo (the bad jobs number). XYZ starts tanking. Now in the real world, XYZ would keep plunging and not stop until some lower level and maybe it might regain a part of its losses from lower levels. But not the dollar, it immediatley plunged and came right back and was already postive by the time the ISM report came out. Disagree with my explanation? You think of something better.


Friday's action in gold and the dollar was already planned out well in advance. I have often screamed that gold is not a natural market and is controlled by the CB's and the bullion banks, as well as Da Boyz at the Comex. Days like Friday prove me right. If you want to see examples of natural markets, look at Platinum, Palladium and wheat. Those are natural markets, they keep making highs as the fundamentals support those highs. Gold can't even get to an inflation adjusted high.

I hate it when I am this right.....

Driving in this morning, I had a feeling that gold would be in trouble when I heard it was up $11 on slight dollar weakness. As soon as the god awful jobs number was released the dollar tanked hard, almost taking out it's 40yr low of 74.75 while gold shot up to $941+. I knew right then and there gold was dead for today as the dollar would reverse. This was jobs Friday, and that's the way it plays out. There is no rhyme or reason, it's just the script "they" play.

As sure as the pimples on my ass, within a few minutes the dollar "magically" got back half it's losses and when the ISM number came in slightly better than expected the dollar took off like the subprime/derivative situation had been cured. I saw gold started to come in to only up $5 and went into action. Like I said yesterday, I only had a few gold stocks in my trading account, what I did have, I immediatley sold at nicely higher levels. I also shorted GOLD which was trading up THREE DOLLARS!!(That in it self is a joke).

When the stock market opened, it looked like I made the wrong decision as the gold stocks shot up as the HUI was up 8+. The stocks I had sold were higher where I had sold them. Oh well, that's the way it goes, I was ahead on my GOLD short though.

After a few minutes, gold went south, hard. I immediately shorted GLD and GDX as I knew we would be in for a rough day. I really thought gold would be down $20-$25 as I had seen this action on many a jobs Friday and knew what was coming.

To make a very long day short, gold at it's worst was down about $20, before rallying back to close down $15+. GOLD gave back it's entire three point gain, plus another point on top of that. However, for the most part, the gold stocks acted ok, in the face of such a shitty gold day. However, the gold stocks managed to piss away yet another good stock market day. The HUI closed down 7+, which, when compared to yesterday's down 11 when gold was higher, is not too bad.

Today, was clearly an operation by the ESF (Exchange Stablization Fund) and the bullion banks. Gold was in danger of taking out it's 40 year low and that was unacceptable. Like I have been screaming, this happens every single jobs Friday whenever there is a bad jobs number. Gold was clearly capped by the bullion banks at $941 as was evidenced by the hard sell down from that number. All it took was some selling to take out the stops.

Today goes down as one of the top 10 manipulated days since I have been following gold. This action today shows why the gold market is one that is never to be trusted. It is not a fair and natural market. I am embarassed to call myself a particpant. It is shit like this that makes other people laugh at us. It is not a question that gold was down $15, but rather the way it was down. Gold need to come in, but not like this. In addition, we now get to hear from every idiot, who had no clue as to the true reason for the gold bull market, tell us how the gold bull is dead, and that they knew it was going to end poorly like it did today.

Where does gold go from here in the short term? I haven't a clue. On Sunday night, the CB's in Asia and Middle East could be buyers. Or, they can join the train and start selling. I do know though, that after today's joke of a jobs number, all roads still point to gold more than ever.