Metal keeps drying up as Comex pretends otherwise


6:10p ET Tuesday, October 21, 2008

Dear Friend of GATA and Gold:

Today brought a couple more notable comments about the disparity between the price of real gold and silver in hand and the price of gold and silver futures on the New York Commodities Exchange.

First from market analyst and mining company consultant Peter Grandich, now writing daily at Agoracom (

"There's an old saying: 'Don't fight City Hall.' I have a new one: 'Don't fight the bandits on the Comex.'

"There's no rational explanation for the incredible disconnection between gold's physical demand and the paper trading of it on the Comex. Whatever doubt anyone had about GATA being right in its cause would be gone in my humble opinion if you watched Comex trading every day. A very good friend of mine says he doesn't mind losing in gold and his mining stocks, but when you can see criminals stealing it from you on the Comex, you just want to die.

"I love GATA but I'm now wondering: Can we ever fully expose this den of thieves called the Comex?

"Oh, well, time to make another donation to GATA."

Second, from Hugo Salinas Price, president of the Mexican Civic Association for Silver, quoted in GATA Chairman Bill Murphy's "Midas" commentary at

"Mexico's central bank has informed us that as of this morning they will be able to supply us with only 60,000 Libertad silver ounces from here to December.

"Banco Azteca has in stock only 15,000 ounces.

"Banco Azteca has been selling 60,000 ounces a month in August and September.

"How is it possible that a country that is either No. 1 or No. 2 in silver production (Peru sometimes exceeding Mexico) cannot supply silver coin?

"Is there some sort of agreement at a high level to restrict the amount of silver coin that the population can obtain?

"Does this measure go beyond the scarcity of silver at the present 'paper price' of silver, to a deliberate restriction of silver coins to be placed in the hands of the public?

"This restriction on supply on the part of the Banco de Mexico, which mints the Libertad ounce, is disturbing, to say the least."

Whatever the reasons, the Comex price is far below the price for real metal. Mining company shareholders have to hope that eventually the stock markets will stop taking their cues from the Comex and start taking them from real purchases of real metal. GATA will keep working for that.

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

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