More commentary on the gold rally


By Bill Murphy
May 21, 2001

Gold $284.05 down $2.10
Silver $4.53 down 2 cents

First the important gold market news, which is the GATA
news. There is no doubt in my mind that some very, very
big financial types are very aware of GATA, our GATA
African Gold Summit, and Reg Howe's lawsuit.

They have been buying for more than a month now. That
is why gold has been trading differently. These big-
time money guys are taking on the Gold Cartel and they
know exactly what they are doing. They must be laughing
at the gold analysts and gold reporters, who still have
no clue why gold has rallied so sharply ever since GATA
arrived in Durban, South Africa. They are laughing all
the way to the bank.

My interview today with the South African Broadcasting
Co.'s top-rated radio show, "PM Live," went very well.
I followed Kelvin Williams, marketing director of
AngloGold, who gave his interview from Istanbul, where
he is attending a gold conference. Williams attributed
the gold rally to the big short New York positions
being taken out of the market. I concurred, but stated
that we believed that the short position was much
bigger than the gold trade acknowledged. We use Frank
Veneroso's 10,000-16,000 tonne gold loan numbers,
versus the industry standard number of 5,000 tonnes. I
said that Frank calculated these numbers many ways and
they all pointed to the same conclusion. I said this
information was presented at the GATA African Gold
Summit along with the GATA Action Plan.

I then said this is a Clinton Administration scandal,
and that as the size of the short position becomes more
known and GATA's evidence of price collusion is
studied, the price of gold will take off to $600 per
ounce. There was more and that included my request for
Africa's help in our quest for truth and transparency
in the gold market.

Coincidence or not, just after the interview the
Office of the High Commissioner of Nigeria called our
Durban headquarters and requested the action plan and
everything else that GATA could provide. Our publicist,
Rhoda Fowler, sent them even my SABC-TV interviews.

Some feedback on today's radio interview from Botswana:

"I opened your message about the live broadcast about
10 minutes before 5. I am in Botswana and the radio
reception is difficult. I maneuvered my Jeep Cherokee
into different positions around the farm in a vain
effort to improve reception. In disgust, I gave up and
parked the car in the garage -- whereupon your voice
came out loud and clear! The tin roof acted as an
additional aerial! I thought you came over very well
without getting complicated. I am sure another many
thousand people will have got the message. Regards,
Andy Brown."

The word is spreading about GATA and our claims. The
more that happens, the more buyers will take on the
Gold Cartel. It won't be long now before the
"enveloping horn" does them in. They threw everything
they had at gold today. The volume was extremely heavy
at 78,000 contracts. They know that if gold ever goes
$300 bid, there will be a buying panic.

I think that panic is coming, and sooner rather than
later. Word about what GATA has uncovered is spreading
fast. Take a gander at this:

A member of in Italy, Dave
Champeau, sent us the following email about what
happened on CNBC Europe around 6 p.m. London time
today. The legendary Harry Schultz, who has so been
helpful to GATA for two years, sent me a fax confirming
what is below:

* * *

As a regular viewer, I get CNBC Europe Market Wrap
beginning at 5 p.m. here in central Europe.

I have been a regular emailer and they call me that. I
have developed a rapport over the last few months with
the regulars. I even told them to watch gold a month or
so ago.

Sometimes they read my eamils on the air -- quite
often, actually.

Today they wanted to talk about gold and were talking
about it a lot. They asked the viewers for opinions on
why the price has risen so sharply -- inflation,
speculators, short covering, etc.

My first email, which they discussed at random, was

"Ladies and Gents, the short interest at COMEX was very
low, as open interest was very low.

"This has nothing to do with Bank of England auctions,
as the BOE "sells" very little by world standards. This
has nothing to do with inflation or speculators.

"This has everything to do with a manipulation scheme
run wild.

"Here is a piece I received last week:

"'Our intelligence sources have informed us that Alan
Greenspan has given the bullion banks until the end of
May to clear up their hedging and outstanding gold
derivative positions. Evidentally this process has been
going on for some time. Furthermore, Tony Blair will
try to make available, at the upcoming British gold
auction, additional gold that will go to banks
designated by Alan Greenspan. We were also told that
AngloGold will sell forward a designated amount of gold
to banks also specified by Greenspan. Our source for
this intelligence has been very accurate in the past.'

"Also remember, Alan Greenspan is a defendant in a
lawsuit by Reg Howe in Boston along with the Federal
Reserve, U.S. Treasury, William McDonough of the New
York Fed, and JPMorgan/Chase, Deutsche Bank, Citibank,
and others about manipulating the price of gold using
the U.S. Exchange Stabilization Fund, a semi-secret
slush fund set up by FDR to help support the dollar in
the 1930s.

"This all goes back to former Treasury Secretary Robert
Rubin and his strong dollar policy. Now it is time to
clean up the mess from massive gold loans, leasing, and

"GATA was just in South Africa spreading the
information they have on this manipulation, because the
African countries have been devastated by the
suppressed gold price.

"Why do the bankers want to do this? Because they are
creating paper money at a rate never before seen. If
gold was trading freely, it would reflect this paper
money creation.

"Remember I told you a few weeks ago to watch gold.

"Ask someone who authorized the BOE to sell YOUR gold.
Neither Tony Blair nor Gordon Brown has ever taken
responsibility for this decision. You Brits are being
robbed blind. The vaults have been cleaned dry.

"Ask: Who has been buying all this gold the central
banks are selling? No one ever talks about that.

"Regards, David."

* * *

My second email, after the CNBC people said "alleged
lawsuit," went like this:

* * *

"This lawsuit has been filed in the U.S. District Court
in Boston. The next step takes place at the end of May.
That's why Greenspan needs to get things cleaned up. If
this goes to discovery he will be found guilty of lying
under oath to Congress. The gold shorts from the
central banks/bullion banks have been estimated to be
short by as much as 20,000 tonnes.

"They read this VERBATIM. I almost fell out of my
chair. They started talking about Greenspan's

"It is truly different from the U.S. CNBC group.

"Regards, Dave."

* * *

Is it any surprise then about this post at

* * *

uponroof (05/21/01; 13:13:10MT - msg#:

As my friend says ... another dot to connect .....
Interesting rumors from the London floor..... 1. The
FED is selling gold today. 2. The FED has asked the BoE
to sell 100 tonnes to selected banks. If you fit these
into the previous Chapman "rumor," which is gaining
credibility daily, it all makes sense. Greenman made a
mistake thinking he could control the time of rising
POG. He then compounded the mistake by announcing to
several banks that they had until the end of the month
to clean up their hedges.

The plan leaked out (Chapman/GATA) causing Friday's and
last night's spikes. Greenman had to sell Fed gold
today to protect the major banks. He must be feeling
like the stupid accomplice who is always getting
screwed, involving himself with repetitive criminals.
To make matters worse, I doubt he consulted with
O'Neill prior.

You can be sure the ultimatum (given to banks to clean
up hedges) included higher orders (from O'Neill) for
Greenman to stop selling Fed gold. But not enough time
to get everyone in the loop today (as gold was headed
for 300) so Greenman had to act decisively ... and out
of line. IMHO the countdown has started. Today's help
from the Fed a final act of kindness from a pissed-off
"nice guy." Don't look for such favors after the end of
the month.

* * *

I look forward to what John Brimelow has to say every

* * *

Bombay ex duty premiums: AM $2.88, PM $2.19, with world
gold at $287.45 and $289.25. Below legal import level,
although still positive. Considering the Indians faced
an unexpected world gold price increase of $15-20 this
morning, this is quite a robust performance. With the
wedding season in full swing and dealer credit lines
contracted (following the scandals of last month) it
will be difficult for the dealers to stay out of the
import market long.

The savagery of the gold price moves in the past 24
trading hours, particularly the $11.50 spike to $297.50
this morning when Asia opened, gives rise to the
following reflections:

1) Obviously this is not a market dominated by large
numbers of small price-sensitive physical buyers. To
exhibit this style of volatility, there have to be
large, vulnerable, and closely monitored positions of
some type out there somewhere.

2) Rumours are starting to circulate of hedge and
option books being in trouble. Given the persistent
high and inverted gold lease rate curve, followed now
by a large and abrupt increase in price volatility,
this is very plausible. From Mitsui:

"With gold in Australian dollar terms now over 550,
more producers from that part of the world may also be
experiencing pain on their hedges. Vols are well-bid,
with one-month at-the-moneys trading in the mid-20s,
double the doldrum levels of 13-ish seen early last
week. The LBMA's get-together in Istanbul today is no
doubt experiencing a few no-shows given the flurry of

This follows their hint of last Thursday:

"We also believe that most option books have negative
gamma, which essentially means that option books have
upside buying. "

3) For gold to take off late on Friday after London's
close, on huge Comex volume (53,000 contracts traded in
the last 90 minutes), with many prominent dealers away
for Friday's World Gold Council meeting and this week's
Conference, suggests the bullion community may have
been ambushed by some well-informed player (or players)
who understands option volatility. In that case
excitement in the gold market may well continue for
some time.

-- JB

* * *

GATA appreciates all those who bought Durban Deep stock
today in support of the company's supporting GATA. Even
though many Canadians were off for a holiday, the
volume was very heavy at more than 4 million shares. It
went up 13 percent in price too. When gold goes to $600
per ounce, and it will, Durban Deep will be one of the
biggest gold share winners of all.

Mark Wellesley-Wood, chairman of Durban Deep, was on
South African Broadcasting Co. TV this afternoon.

Dennis Birch of Dennis Birch's Resource Stock Digest
sent out the following yesterday to help the cause:

* * *

Special Situations Hot Alert - 36 Update

May 20, 2001

Gold Rockets Up $12.65 Friday to Close at $286.50!

The price of gold has been moving up significantly
since our last Hot Alert of May 9, 2001. The wild card,
GATA, which was discussed may very well be the
catalyst. Our recommended gold stocks closed on Friday
as follows:

Agnico Eagle Mines closed at $$9.26, up 6%. Durban Deep
closed at $1.24, up 5%. Francisco Gold Corp. closed at
C$6.20, up 9%. Freeport McMoran Copper & Gold
Preferred B Shares closed at $23.15, up 6%. Homestake
Mining closed at $7.88, up 10%. Everyone following our
strategy should be up very nicely with much more to

It recently came to light that one of our recommended
stocks, Durban Deep, has been a supporter both
financially and morally of GATA. You will find comments
from Durban's chairman in a piece from sent out today by the site's
editor, Bill Murphy, who is also chairman of GATA. Bill
has called for all-out buying of our recommended Durban
Deep shares to support their efforts on behalf of GATA.
His current posting has been pasted
at the end of this alert and will give you his current
take on the outlook for the price of gold and other
pertinent events. Many events that are off the radar
screens of the mainstream media and other relevant
information will be found on his site. Previously I
have suggested that you subscribe to Bill's Internet-
delivered newsletter. If you haven't, log on and get a
free two-week trial subscription and I'm sure you will
subscribe after the trial period.

Monday will be a key day and we may get early
directional indications when the Monday Asian gold
market opens Sunday afternoon in the U.S. Check the site for prices as described in the last
alert that has been re-posted here for your
information. The war is definitely on in the gold
market and there will be many battles. The PTB have had
the weekend to formulate their action plans on gold and
should they decide to defend a lower price they will
have to be heavily shorting gold on Monday for it to
retreat. On the other hand, it is possible that they
will pick another price point, probably under $300 to
defend. In any event, Monday should prove to be a very
interesting day. At some point, they will have to
capitulate, and gold will move up several hundred

Up or down, I will be looking to add shares Monday as
the downside risk is limited both in time and in price
while the upside potential is of proportions.

-- Dennis Birch

* * *

I could not agree more with Dennis. The gold shares
have potential that will last, especially the

Based on the gold market commentaries, the mainstream
investment world has no clue what is happening to gold
now and why. By the time they "get it," gold will be
$380 bid.

This South African gets it and his feedback is much

* * *

Dear Bill:

I was fortunate to hear one of your interviews on SAFM
and read a number of articles in the press. I think the
recent major escalation in the gold price is evidence
of the success of the summit in Durban and your work
and that of others, like Reg Howe, at GATA.

Best wishes and congratulations on the breakthrough!

-- Steve Archibald

* * *

Gold shares around the world continue to move higher.
Even though gold sold off in the U.S., the XAU closed
at 65.79, up 52.

The Johannesburg Stock Exchange's gold index hit a year
high and ended up 5.1 percent on the day, shadowing the
earlier 5.56 percent increase in Australia's gold
mining index.

Canada was closed for the Victoria Day holiday.

I called up the New York representatives for Germany's
Focus magazine to find out what happened to the GATA
story that was due out this morning. She was very aware
of the gold market excitement and didn't know why they
did not run it. She assured me that she would get back
to me.

But all was not lost on the publicity front. Wish I
could read Italian regarding the following article that
appeared in the Italian magazine Borsa & Finanza on
Saturday, May 19, on Page 29. The author is Guido

For fun I have laid it all out for our Italian-speaking
friends. I can see enough recognizable words to know
the journalist did his homework. A little more ink for
Mr. Greenspan!

* * *

Il Tesoro USA tra gli imputati di "manipolazione"del
libero mercato.Rischi per le borse internazionali
(Guido Bellosta.)

Un processo che si tiene a Boston monopolizza
l'interesse di centinaia di migliaia di risparmiatori ,
finanziatori e minatori . Sul banco degli imputati il
Tesoro degli Stati Uniti,accusato di aver per troppi
anni "manipolato" il prezzo internazionale dell'oro con
sofisticate operazioni finanziarie.

Il principale teste dell'accusa potrebbe essere
addirittura Alan Greenspan,accusato di aver palesemente
dichiarato il 24 luglio 1998,davanti al "House Banking
Committee" che le Banche Centrali" erano pronte a
prestare tutto l'oro necessario in caso di ascesa della
quotazione del metallo giallo"

Tale frase era stata nuovamente ripetuta sei giorni
dopo dallo stesso illustre governatore al Senate
Agricultural Committee.

Da molti anni gli osservatori notano che la quotazione
dell'oro scende con implacabile regolarit. Il prezzo
del metallo giallo,dopo il massimo di $ 860 segnato
venti anni fa, ha iniziato una lenta, regolare,
implacabile discesa.Attualmente il prezzo staziona
attorno a $ 265.Su questo livello molte miniere sono
state costrette a chiudere. Centinaia di migliaia di
minatori sudafricani,canadesi,australiani sono stati

Il sospetto di possibili manipolazioni nei prezzi ha
spinto investitori e minatori a coalizzarsi fondando
G.A.T.A ( Gold Anti Trust Action Committe), una
organizzazione senza fine di lucro.(
presieduta da Bill Murphy. G.A.T.A riconosciuta dal
governo americano come ente che tutela i diritti
civili.Le donazioni fatte a G.A.T.A. sono infatti
deducibili fiscalmente per il contribuente

Secondo G.A.T.A. le leggi economiche sulla domanda e
l'offerta di oro sono continuamente calpestate. La
domanda annuale di oro supera infatti stabilmente
l'offerta per oltre 1500 tonnellate.La continua vendita
di oro posseduto dalle Banche Centrali aveva supplito a
tale deficit all'inizio degli anni ' 90.. Con tali
vendite pero' le Banche Centrali affossavano ancor piu'
la quotazione diminuendo l'incasso previsto con queste

Il 26 Settembre 1999 quindici Banche Centrali europee
decisero percio' di limitare la cessione del metallo
posseduto ad un massimo di 400 tonnellate all'anno.Tale
accordo varr per cinque anni. Il mercato reag con un
forte rialzo a tale annuncio.Ma si tratto' di un fuoco
di paglia. Le vendite tornarono ad avere il

Il prezzo dell'oro,affossato con il palese utilizzo
degli strumenti derivati,ha continuato infatti a
scendere.La causa di questa continua discesa,non
giustificata dalle compravendite fisiche di metallo,
da imputare infatti alla speculazione effettuata con i
derivati. da note banche internazionali.

L' uso di tali strumenti,secondo l'Office of the
Controller of the Currancy,dovrebbe avere superato nel
1999 gli 87 miliardi di dollari,una cifra superiore al
valore delle riserve americane.

L'entit delle riserve americane dovrebbe infatti
aggirarsi attorno a 8,140 tonnellate.

Veneroso Associates stima che i prestiti ottenuti
contro oro ammontassero a fine 1999 tra le 9000 e le
10.000 tonnellate.Tutto questo mentre la produzione
mineraria toccava solo 2579 tonnellate.

La diminuizione del prezzo ha permesso alle grandi
banche che operano nel settore aurifero di ottenere
prestiti a tassi bassissimi,spesso inferiori all' 1%.
L'oro,ottenuto in prestito dalle Banche Centrali viene
venduto.Il controvalore per venti anni stato
impiegato con profitto sui mercati finanziari. La
diminuizione del prezzo del metallo ne permetteva
successivamente l'eventuale riacquisto. Questa pratica
stata perseguita con successo da parte di note
istituzioni finanziarie. Tassi cos bassi erano
possibili in quanto il prezzo dell 'oro puntava
stabilmente al ribasso. I profitti di queste
istituzioni significavano pero' la perdita di decine di
migliaia di posti di lavoro nel settore minerario ove
anche le miniere marginali venivano implacabilmente
chiuse. Lo Standard Equities di Johannesburg ha
previsto un crollo del 35% della produzione aurifera
nel 2008 se le quotazioni dovessero rimanere sugli
attuali depressi livelli.

La discesa del prezzo dell'oro offriva,secondo G:A.T.A.
la falsa impressione di un "super dollaro",scudo contro

Il Governatore Alan Greenspan ed il segretario del
Tesoro Lawrence Summers hanno risposto alle inchieste
promosse da G.A,.T.A negando interventi della Fed o del
Tesoro sul mercato. Ma non hanno chiarito se tale
smentita concerneva anche lo strumento piu' sospetto :
l 'Exchange Stabilization Fund,controllato direttamente
dal Segretario del Tesoro

G:A.T.A non si limita a portare in Tribunale le piu'
alte autorit statunitensi con l'accusa di manipolare
il prezzo dell' oro. Punta il dito sui rischi di una
"crisi dalle epiche proporzioni" causata dall'enorme
consistenza del mercato dei derivati. La bolla
speculativa potrebbe infatti scoppiare,alimentata dall
'ingente quantitativo di derivati in circolazione.
Questa bolla minaccia la solidit delle piu' note
banche internazionali e la stessa forza del dollaro.

Bill Murphy, presidente di G.A.T.A inoltre chiede ad
Alan Greenspan,in una lettera aperta,la quantit esatta
dell'oro posseduto dagli Stati Uniti. L'ultima stima
sulla sua consistenza risale ai tempi di Eisenhower.Sul
mercato aleggia infatti la voce di una possibile
diminuizione dell 'oro posseduto dagli Stati Uniti.

Qualsiasi sia l'esito del processo l 'opinione pubblica
conosce ora i rischi esplosivi insiti nell' eventuale
manipolazione del prezzo del metallo giallo Una crisi
finanziaria devastante potrebbe sorprendere i mercati..
La possibilit di un esito positivo del processo ha gi
prodotto le prime conseguenze sul mercato azionario
americano. Le piu' note miniere ( Barrick,
Newmont,Placer Dome,Homestake)hanno messo a segno
consistenti rialzi.I gold-bugs iniziano a sorridere
dopo venti anni.

* * *

Another USA Gold post. It confirms what you have
already been presented about Friday's action -- with a
special twist:

* * *

Breaking News On gold......from last week's

(dowjonesbubble) May 21, 18:18

The reason gold broke out is pretty simple. On the
charts, we got to the 275 level on the futures and a
firm called Goldman Sachs tried to sell futures.

In fact, I heard that Goldman was taunting the guys on
the floor to try and take the other side of the trade.
Their attempt to keep the price from rising was simply
cabal of investors took the other side of the trade
many times as Goldman continued to sell gold futures
contract. By late last week, Goldman continued to sell
and buyers overwhelming outweighed all Goldman selling.

Eventually, floor traders became shocked as Goldman
could not push the price any lower and that prompted a
flurry of short-covering. The rumor has it that Goldman
has not unwound all of their short position and they
still may attempt to sell futures but so far the "other
cabal" has stepped up to the plate and matched Goldman.
Again, to repeat, Goldman was taunting traders at 275,
almost laughing and mocking those that would try and
take the other side. Well, somebody their size took the
challenge and fended off the Goldman selling. They were
cocky and got it handed to them. Folks, there is a
group on your side. They are long gold it seems and
they're willing to absorb all of Goldman's selling.

This is what I hear happened last week and the scare
shorts got when they saw that Goldman could not control
the gold futures price. The shorts are now fully aware
that the longs mean business. The game may have
changed. This is all a rumour but I believe it to be
true. Take it for what it's worth. Later.

* * *

This is exactly what I think is going on and have
alluded to recently. Some very strong hands are taking
on the Gold Cartel. Call it what you may, there is VERY
BIG MONEY now on the long side of gold and they have
perfectly timed their big move to GATA's South African
efforts and Reg Howe's lawsuit.

A gold cartel on our side! Yes!