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Copyright 2003,


It has been a long day for me thus far. I am
back in Vancouver to make a presentation
Saturday at the World Outlook Investment
Conference. Love this town.

When I boarded the plane, gold had rallied
back to just below unchanged. As it was
rallying, this news hit the tape:

* * *

NYMEX upping COMEX gold margins
at close Thursday

NEW YORK, Feb. 6 (Reuters) -- The New York
Mercantile Exchange will raise the amount of
collateral required to trade gold futures
contracts at its COMEX Division as of the
close of business Thursday.

Margins on COMEX gold futures will be
increased to $1,500 from $1,000 for members,
member firms, and hedgers; and to $2,025 from
$1,350 for speculative customers, the
exchange said in a release issued late

* * *

The gold war is on in full fury. The "Comex
division" is loaded with members of various
bullion dealers, who are the big shorts. A
number of these folks have been part of the
Gold Cartel all these years. From the
Commitment of Traders Report, they know gold
is filled with small speculators who are very
leveraged. So Comex waited to raise the
margin requirement when it would do the
shorts the most good.

Gold reversed yesterday after reaching $390
in the futures contracts. The open interest
had increased to 245,682 on Wednesday. That
is the highest since January 13, 1981. It
went up 4521 contracts on the big spike

A 50 percent margin increase is a hefty one.
They did not raise it sharply as gold went
up, but as gold reversed sharply to the
downside, making the specs vulnerable to such
a significant margin increase.

The Gold War is heating up. The good news for
us is that all crooked cabal types are doing
is buying time. They are finished. That does
not mean we could not get a doozy of a swift,
sharp correction. Because the spec position
is so large, it could even be dramatic. My
thinking is that no matter what happens, the
drop will be a quick one and gold will shoot
right back up. There is too much power behind
the move and too much physical market demand
for gold to stay down for very long. Besides,
the massive, trapped shorts will have to
cover when they can. This may be their last
chance to do so before the inevitable gold-
buying panic kicks in.