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Ted Butler: Watch these clues for any tapping into Comex silver stores
9p ET Monday, July 19, 2004
Dear Friend of GATA and Gold:
Appended are a couple of today's precious metals
market commentaries that may be of interest,
particularly the first, from CBSMarketWatch, which
finds a market analyst talking openly about central
bank manipulation of the gold price.
We probably should expect gold and silver to be
hit hard Tuesday and Wednesday as Federal
Reserve Chairman Alan Greenspan testifies to
Congress -- the usual drill. But maybe, as that
analyst quoted by CBSMarketWatch suggests,
people are beginning to figure this out and aren't
panicking as much anymore.
In any case, with central bank manipulation of
the gold price increasingly being taken for
granted, we can take some satisfaction no
matter what happens with the price in the short
term.
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
* * *
Gold Futures Fall But Hold Above $400;
Traders Watch Dollar Ahead of Greenspan Comments
By Myra P. Saefong
CBS.MarketWatch.com
Monday, July 19, 2004
http://cbs.marketwatch.com/news/story.asp?guid=%7B03A96253%2DAA8A%
2D44C7%2DB68F%2D311A8F7AAEC1%7D&siteid=mktw
SAN FRANCISCO -- Gold futures lost ground Monday but
closed above the key $400-an-ounce level for a
seventh-straight trading session as investors kept an eye
on moves in the U.S. dollar ahead of comments from
Alan Greenspan this week.
Gold for August delivery closed at $405.80 an ounce on
the New York Mercantile Exchange, down $1 for the
session. The contract hasn't fallen below the $400 level
since July 7.
"Despite the lack of U.S. data out this week, the
currencies are still set to have a heavy influence over the
course of the week with Alan Greenspan set to address
the Senate Banking Committee on Tuesday and the
House Financial Services Committee on Wednesday with
his semi-annual monetary policy testimony," said James
Moore, an analyst at TheBullionDesk.com in London, in
a note to clients.
Ahead of Greenspan's remarks the dollar was mixed,
gaining ground against the euro, but weakening against
the Japanese yen. That provided little near-term direction
for gold.
"The gold is usually weak going into Greenspan's
testimony," said John Stafford, editor of Stafford's
Investment Strategy Letter.
But "since we all 'know' that Greenie must reflate, and
now actually has a vested interest in reflating, [gold
has] recently been stronger than normal after he
finishes speaking," Stafford said, adding "there is a
lesser fear of central bank manipulation of gold to
keep a 'lid' on it -- whether warranted or not."
Taking a look at the bigger picture, gold is "quietly"
inching back up to $410, but this time it's taking it's
time and filling in all the cracks in prices," said Kevin
Kerr, a senior trader at Kwest International.
Kerr estimates that $425 is the next key level for gold
after it moves past resistance at the $415 level. "More
downward pressure on the dollar and continued 'flight
to quality' are continuing to support the gold above
$400," he said.
Other metals futures closed mainly lower. September
silver ended at $6.60 an ounce, down 12.5 cents,
September palladium shed $2.55 to close at $227 an
ounce, and September copper fell 0.55 cent to end
at $1.305 a pound. But October platinum rose $3 to
close the session at $824 an ounce.
Tracking inventories, copper supplies were down 305
short tons at 87,132 short tons as of late Friday,
according to Nymex. Silver stocks were down 1,041
troy ounces at 116.0 million troy ounces. An update
on gold inventories wasn't available.
Taking their cue from gold futures, mining shares
closed lower Monday, even after some indexes for the
sector lost as much as 4 percent last week.
"We believe the current weakness affecting gold shares
is being caused by the looming [second-quarter 2004]
earnings period," said Michael Jalonen, an analyst at
Merrill Lynch, adding that despite a higher
year-over-year gold price, he doesn't expect strong
earnings-per-share growth for most companies.
After the results are released, "gold equities should
start moving forward again," he said in a note to clients.
Tracking the sector as a whole, the Philadelphia Gold
and Silver Index fell 1.6 percent to close at 88.26 and
the CBOE Gold Index also lost 1.5 percent to end at
78.33.
Meanwhile, the Amex Gold Bugs Index closed at
190.36, down 1.9 percent.
Among the biggest index-component losers, shares of
South African miner Durban Deep fell 3.2 percent.
Shares of Harmony Gold Mining lost nearly 3 percent,
and Bema Gold and Hecla Mining lost 2.2 percent.
* * *
Gold Seen Holding Above $400
This Year and Next
By Reuters
Monday, July 19, 2004
http://www.reuters.co.uk/newsPackageArticle.jhtml?
type=businessNews&storyID=549651§ion=finance
LONDON -- Gold prices are seen holding an average
above $400 an ounce for the foreseeable future as
the dollar stays weak and world security worries
keep big investors hedging their bets on where
money is safe, a Reuters poll shows.
The global survey of 24 analysts pointed to an average
gold price of $404.50 a troy ounce in 2004, up 11.2
percent on 2003. Gains were then seen being pared
to an average for 2005 of $402.50, up 10.6 percent
on the 2003 level of $363.83.
Analysts' predictions for 2004 were down around 3.5
percent compared with a similar survey conducted in
January as expectations of broader investment flows
had disappointed.
"2004 promised so much and simply failed to deliver,"
Ross Norman of TheBullionDesk.com said.
Gold's broad uptrend started in 2001, when the metal
was near 20-year lows.
The advance gathered momentum as dollar weakness,
global security worries, and producer buy-backs of
reserves in the ground that they had sold on forward
markets pushed world prices to a 15-year peak in early
January 2004 of $430.50.
Producer buy-backs have since slowed, but the market
should remain firm as the spotlight concentrates on the
dollar, where weakness makes gold less expensive for
holders of other currencies.
"We are dollar bears, despite the fact that the second
quarter of 2004 saw the dollar improve. ... We remain
bullish on the gold price -- tempered to be sure,"
economist Martin Murenbeeld said.
"Issues such as debt -- government and household --
factor into our longer-term thinking and are gold-positive,
while terrorism and its potential impact on oil prices are
on average also gold-positive," he added.
Investment funds piled into commodities, including gold,
in 2003 against the backdrop of a struggling dollar and
heightened geopolitical tension.
But analysts said the market had been only partially
successful in its efforts to attract new investors with
products such as gold-backed securities traded on stock
exchanges.
"The expectation of a sustained rally was based on the
assumption that a retail and wholesale investment market
would be launched and indeed gather momentum,"
TheBullionDesk's Norman said.
"The market has failed to inspire the investment
community and so the indomitable laws of supply/demand
are reasserting themselves and gold is re-establishing
itself in a rather uninspiring trading range."
Average 2004 price forecasts for gold in the poll range from
$376.00 to $422.25, but even the low was above the average
forecast for 2004 of $350 when a similar poll was conducted
in July 2003.
Frederic Panizzutti of MKS Finance said economists'
expectations of a slow but almost confirmed world economic
growth cycle -- plus moderate, but increasing inflation --
should be positive for commodities prices.
"Geopolitical instability and concerns will be another source
of support, in particular for precious metals," he added.
"These few but major factors should enable demand for
precious metals to grow over time and generate additional
price strength mainly in the last quarter of 2004," he said.
Silver was expected to be the top-performing precious
metal in 2004, with forecasts for an average price of $6.31
an ounce, up almost 30 percent from 2003. It was seen at
an average $6.10 in 2005.
Analysts said silver was also prone to highly volatile moves
given the level of speculative activity in a market where
fundamentals were weak.
Strong fundamentals were expected to keep platinum prices
firm in 2004, but the market was not seen revisiting the
24-year peak seen in April at $942.00, while palladium might
be capped by its dependence on speculators.
Platinum supply shortfalls might ease, but speculation
about the possible use of palladium as a substitute for
platinum in catalysts for diesel-powered cars was seen as
premature.
"Platinum remains the metal with the strongest fundamental
background. Nevertheless we consider it will get closer to a
balanced market. Since industrial consumers already
purchased during the recent corrections they are not forced
to buy at any price," Dresdner Kleinwort Wasserstein said.
Analysts forecast an average platinum price in 2004 of
$834.00 an ounce, up more than 20 percent on 2003, before
a drop to an average $805.00 in 2005.
Palladium -- which briefly rose to $300 an ounce earlier this
year on fund buying fuelled by news of new technology to
boost its use in the auto sector -- was seen rising 20.9
percent to an average $240.00 in 2004 and then rising
further to $250.00 in 2005.
"Though fundamentals have brightened up to some extent
after news came out that palladium can be used in
catalysts for diesel engines, the picture remains mixed. In
our eyes, the upside is therefore limited," Dresdner said.
----------------------------------------------------
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RECOMMENDED INTERNET SITES
FOR DAILY MONITORING OF GOLD
AND PRECIOUS METALS
NEWS AND ANALYSIS
Free sites:
http://www.cbs.marketwatch.com
http://www.capitalupdates.com/
http://www.silver-investor.com
http://www.thebulliondesk.com/
http://www.goldismoney.info/index.html
http://www.minersmanual.com/minernews.html
http://www.a1-guide-to-gold-investments.com/euro-vs-dollar.html
http://www.investmentrarities.com
http://www.kuik.com/KH/KH.html
(Korelin Business Report -- audio)
http://www.plata.com.mx/plata/home.htm
(In Spanish)
http://www.plata.com.mx/plata/plata/english.htm
(In English)
Subscription site:
http://www.lemetropolecafe.com/
Eagle Ranch discussion site:
http://os2eagle.net/checksum.htm
Ted Butler silver commentary archive:
http://www.investmentrarities.com/
----------------------------------------------------
COIN AND PRECIOUS METALS DEALERS
WHO HAVE SUPPORTED GATA
AND BEEN RECOMMENDED
BY OUR MEMBERS
Blanchard & Co. Inc.
909 Poydras St., Suite 1900
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888-413-4653
http://www.blanchardonline.com
Centennial Precious Metals
3033 East 1st Ave., Suite 403
Denver, Colorado 80206
www.USAGold.com
Michael Kosares, Proprietor
US (800) 869-5115
Canada 1-800-294-9462
European Union 00-800-2760-2760
Australia 0011-800-2760-2760
cpm@usagold.com
Colorado Gold
222 South 5th St.
Montrose, Colorado 81401
www.ColoradoGold.com
Don Stott, Proprietor
1-888-786-8822
Gold@gwe.net
El Dorado Discount Gold
Box 11296
Glendale, Arizona 85316
http://www.eldoradogold.net
Harvey Gordin, President
Office: 623-434-3322
Mobile: 602-228-8203
harvey@eldoradogold.net
Investment Rarities Inc.
7850 Metro Parkway
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http://www.gloomdoom.com
Greg Westgaard, Sales Manager
1-800-328-1860, Ext. 8889
gwestgaard@investmentrarities.com
Kitco
178 West Service Road
Champlain, N.Y. 12919
Toll Free:1-877-775-4826
Fax: 518-298-3457
and
620 Cathcart, Suite 900
Montreal, Quebec H3B 1M1
Canada
Toll-free:1-800-363-7053
Fax: 514-875-6484
http://www.kitco.com
Lee Certified Coins
P.O. Box 1045
454 Daniel Webster Highway
Merrimack, New Hampshire 03054
www.certifiedcoins.com
Ed Lee, Proprietor
1-800-835-6000
leecoins@aol.com
Miles Franklin Ltd.
3015 Ottawa Ave. South
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1-800-822-8080 / 952-929-1129
fax: 952-925-0143
http://www.milesfranklin.com
Contacts: David Schectman,
Andy Schectman, and Bob Sichel
Missouri Coin Co.
11742 Manchester Road
St. Louis, MO 63131-4614
info@mocoin.com
314-965-9797
1-800-280-9797
http://www.mocoin.com
Resource Consultants Inc.
6139 South Rural Road
Suite 103
Tempe, Arizona 85283-2929
Pat Gorman, Proprietor
1-800-494-4149, 480-820-5877
Metalguys@aol.com
Swiss America Trading Corp.
15018 North Tatum Blvd.
Phoenix, Arizona 85032
http://www.swissamerica.com
Dr. Fred I. Goldstein, Senior Broker
1-800-BUY-COIN
FiGoldstein@swissamerica.com
----------------------------------------------------
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