Bill, would it be wiser to stick with canadian listed miners as insurance against the usd delcining

Bill -

First - again, to let you know how much small investors like me appreciate your site and the always honest and forthright postings.

Obviously, as someone who got out of gold early (52) and then jumped in again impatiently (69), and the ignored my stops I am feeling some pain. But not much. I am certain that gold will be heading up soon and that what we are seeing is not a technical correction only but market manipulation. This big drop has follwed the Paulson appointment remember. And the revelation of IMF double counting. The gold cartel is on the verge of being exposed. I am sure they are driving the prices as low as possible to cover their shorts and then will turn around and buy.

I wish you would also call the goldbugs who were out there in droves screaming about $4000 gold and are no where to be found. Or handing out irresponsible advice to buy gold no matter what because it was going to go to the moon. Please name names. These people should be drummed out of journalism.
And keep doing what you are doing.Giving sober thoughtful analysis.
You didnt respond to my interest in your trading school. Is there a minimum? How else could one qualify for it?

Any response is always appreciated.
Goldilox

NY Spot market closed at $563 according to Kitco, isn't that below the $571 support?

Silver has also gotten absolutely crushed today with an 11% drop.

Where is the next support line? $550 range?

A good proxy for gold miners is the new GDX etf which tracks the GDM AMEX Gold Miners Index. Includes over 40 names, much broader than XAU/HUI. Holds most of the better-known juniors like Yamana, TRE, USGL, etc.

GDM is now -30% off highs. Similar to declines in 2002 (-38%), 2004 (-33%), 2005 (-30%). Major support for GDM is 773-799. Today's low was 874, so there could be another blast down. But maybe not.

Fazeli

Its in the range of support, the miners are not going down as much as gold, click on Bills link to Rob tv, John Embry, blood is in the street !!!!!!!

Here's another visual.

http://stockcharts.com/h-sc/ui?s=$GOLD&p=D&b=3&g=0&id=p29260012038&a=77227225

Next stop $535-$540? These are the Feb/March lows and 200 day moving average. At this rate we might be there by now...let me check. :)

tgifbipo,

I've noticed the miners are fairing better than the bullions (Silver and Gold). But I guess we have to wait and see what happens with tomorrow's CPI numbers as well. I'll watch the ROBTV replay...

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7BCC2D967E%2D5A62%2D4DAC%2D8C78%2D9DD36B3E1C09%7D&siteid=mktw&dist=

"The precious-metals bull market is officially over," said Dale Doelling, chief market technician at Trends In Commodities.

I can't wait for the COT data...

Also, Bob Pisani said on CNBC that gold, etc. are now in bear market. So, near the end of selling?

Donna

This is not just on gold but these are my thoughts from the sidelines.

If the market stays at or near these levels on Friday's close we could get the possibility of the mother of all Short term liquidity squeezes that will affect all assets. Why I think this is possible is because of the amount of derivatives being used today. If the SPX ends Friday at these levels the value of put options expiring will be above 4 billion dollars. Who are the sellers of these options and how much of a hedge do they have we won't know until next week to see how it plays out.
That 4 billion is just on the S&P tracking etf the value of market wide in the money puts will be staggering. Many of these will be hedges against stock holdings but I would think many of these will be naked with the number of people gambling and calling bottoms.

This is just my thinking right now and one of the reasons I am staying on the sidelines. I do think we may get a bounce but I would need confirmation to enter long even now after several down days.

Just my short term views, comments welcome

Andy

Jim Sinclair has posting some great information over at his site:

http://www.jsmineset.com/

Any thoughts on Jim's comments and knowledge? He thinks that this sell-off has a lot to do with program trading and has been warning of extreme volatility all the way up.

my mistake that $4 billion in the money put is on the s&p 500 not the spy etf.

Andrew

Asian stockmarkets continue to reset:

Nikkei 225 14,045.53 -173.07 -1.22%
Hang Seng 15,234.42 -387.02 -2.48%
Singapore
Straits Times 2,293.35 -45.18 -1.93%
S&P/ASX 200 4,773.70 -65.20 -1.35%

I find it absolutely amazing that our markets react so "calmly" when the rest of the world is selling down HARD. I know the safe haven argument but find it unpersuasive in the face of cash alternatives.

ALOHA !!

MarkM ... The USA as a reserve currency has had the advantage over other countries having unlimited dollar print-on-demand priviledges. With that advantage is it any wonder that we can "afford" calm markets while the rest of the World is in shear panic mode? With a PPT and the insider trading info between US banks is it any wonder Goldman Sachs has a 200% profit ... Makes Exxon look like a loser with only 100%. My bet is that Goldman Sachs will not be brought before Congress to explain their excessive profits like Exxon was. See any news of protesters outside the Goldman Sachs office on Wall Street? Goldman Sachs moves the price of gold like a game of chess. Us ordinary law abiding "investors" play the game with one king and one queen ... Goldman plays the game with a handful of kings and queens in their pockets(literally). King George being the biggest.

How low can gold go? As low as Goldman Sachs and our elected leaders need it to go!

CPI ... PPI ... just made up numbers to spin a hidden agenda. If you have a pulse you have known price inflation has been biting your wallet for as long as you've been alive. What sort of fantasy drugs must one take to believe that inflation is just now "rearing its ugly head"? Whats more it is an excessive money supply not rising prices that cause this hidden tax, inflation. More to the point ... the US Dollar buys less because too many IOUs exist! Have prices risen or does the US Dollar purchase less? Bernake wants you to blame it on HIGH PRICES so therefore they created an INDEX to measure high prices as evidence it is not money supply! CPI ... tomorrow ... boy am I worried that prices might start to rise this year!!!!

The power of the US Dollar's total demise and destruction does not even lie with an American any more. Asians own us and any country that sells us oil.

Here is an "outside-the-box" scenario that has more merit than not ... from a New Zealander no less ... Those Kiwis !!! While I do not buy the entire script here, I do believe that there is always more than meets the eye when it comes to a corrupt monetary system, from which all other corruption is borne ... The power to print has historically always been abused ...

READ ON:
The Plot to Murder Gold

The following exercise, plainly, I must confess, without merit, evidence, tables or fancy charts is the result of one too many glasses of fine New Zealand wine while sitting beside a fire on a cold wintry night. It all began…..

On December 17th 2005 when Frank Barbera, on the Financial Sense Newshour, made one of the worst calls a market technician could make. He predicted that Gold would fall from $506 to $470 or lower by February 2006 and that the Gold shares would fall from 122.30 on the XAU index to around 100.00 or lower. He said we were entering a Bear trend and possibly a Primary Correction and that he personally had gone to cash when the XAU was between 116-117. He remained bullish long term and was hoping to reenter the market at lower levels. Needless to say, by the time the FSN resumed broadcasting after the New Year's break, Frank had a lot of egg on his face and apologized to his listeners for his bad call. Over the following weeks, analyst after analyst repeatedly called a Gold top only to be quickly humiliated by a surging spot price.

Meanwhile, reports (planted or otherwise) were circulating trying to explain the surge. It was Russian buying, or perhaps Chinese, Iranian, Korean or maybe the shorts were finally covering. Hedge Funds were at the center of the speculation and given their size it is hard to imagine that at least some of them didn't join the party. At the same time, the Eurozone Gold sales under Washington II had dropped off to well below average levels. The Fed raised rates, then talked of pausing, then raised them again, then talked about pausing and still the Gold price went higher.

The conclusion: the Gold Cartel, consisting of Central Banks and their Bullion Banks cousins, had lost control of Gold. Or so we were led to believe…..

And then suddenly everything changed. We all know the horrific details. I don't for a moment think there can be a single, simple explanation. But there may be an angle to all this that we haven't yet considered:

For the past six years I‘ve noticed an odd pattern in the daily spot price as it moves from time zone to time zone around the globe. Gold opens in Sydney, Australia and then follows the sun west to Tokyo, Hong Kong, Singapore and so on to London and finally ends the day in New York. Almost all the daily fluctuations occur in London and especially in New York. Almost nothing ever happens in the far east. Almost nothing. Occasionally however, I first noticed this in early 2000, mid February I believe, there is a steep price rise while New York sleeps. This gain is maintained around the world until New York. The Gold shares open sharply higher, bets are placed and then WACK, out of the blue the spot price is knocked down to below the previous day's close as are the shares.

There may be an innocuous explanation for this unusual trading but I don't think so. The pattern fits other trading patterns that are the signature of the Gold Cartel. Run up the price, let the shares follow, short the shares, then wack Gold using the very Gold purchased during the runup. The profits from shorting the shares easily cover any costs involved in running up Gold during the relatively illiquid Asian trading period. In fact it may be so profitable that someone dreamed up the idea of scaling up the exercise to something really big. Like running Gold to $725 in four months. But why? There are obvious dangers such as losing control of the whole Gold market.

Enter Barrick. The Gold cartel's best friend. We know that Barrick bought Placer Dome. We know that Placer had a potentially toxic hedge book. We have now learned that during the first quarter 2006 Barrick closed out 4.7 million oz of their combined Gold Hedges (almost all from the Placer books). And that Barrick has since closed a further 1 million oz from the Placer books (that is, before Gold crashed from $725/oz) and finally that the remaining 2 million oz will be closed this year. In addition from Ian Telfer we learn the following about Goldcorp's share of the Placer Hedgebook:

Ian Telfer:
"The way the hedging adjustment was calculated was we announced this deal November 1, I think, and because Goldcorp was unhedged and always wanted to be unhedged, we made an agreement with Barrick that when they got 66% of the shares of Placer, we would put a pin in the hedge book that day and we would be responsible for 13% of the hedge book….When we initially made the calculation, we thought that the hedge book would cost us about $100 million to take our share of. With the rise in the price of gold, which of course was good for all of us and good for all the reserves we were buying, our ultimate cost on the hedge book was about $175 million, and then it stopped right there. Of course, since February 15th, the price of gold has gone up even higher, but we have been protected from that point in time. So the final number that we paid on Friday just included the adjustment in the hedge book to February 15th."

I do not have the exact number that Goldcorp inherited from Placer but a rough estimate is one million ounces. Add this to the Barrick share and we get a combined figure of 6.7 million oz closed out during the first four months of 2006. This works out to 208 tonnes. To dramatize the size of this new demand consider its relation to mine supply. A new buyer entered the market demanding 25%+ of mine supply during that four month period. Obviously the price had to rise.

And rise it did, as we know. As did the Gold shares. Except the shares acted strangely. On the best days for bullion the shares did not react. Fresh buying was met with resolute sellers. Anyone brave enough (or plugged in enough) to short the shares has done extremely well. Tens of billions of Dollars have been wiped off the Market Cap of the Gold shares. More than enough to pay for closing out the Placer hedge book. And miracle of miracles the NET result is that Gold has hardly risen.

So what is the Plot to Murder gold?

Well imagine you are the Gold Cartel. Late last year, looking forward to 2006, certain realities stand out:

1) The Fed must stop raising rates by mid year at the latest and then begin easing
2) because the housing market is rolling over and with that the economy.
3) which will upset those seeking reelection in the November Congressional elections
4) This will cause the Dollar to fall
5) and the Gold price to rise
6) The Placer Dome hedge book has to be closed out increasing demand just at the wrong time.

The Plan:

a) Counter intuitive as it may seem, run the Gold Price up not only by closing out the Barrick/Placer hedges but by covering short positions. Notice that the Placer hedge book could have been closed at 600,000 oz per month spread over the whole year. Instead they bought 1,500,000 oz per month over a shorter period.

b) Encourage the bought Press to feature Gold, draw in as many suckers as possible, especially into the shares.

c) Short the shares massively and then WACK. Stop buying Gold, stop the Barrick covering, short Gold and dump any Central Bank Gold contributed to the cause. Encourage the bought Press to feature Gold's demise, the end of the bull run, the panic among shareholders and longs, the success of the Fed's antiinflationary policies.

d) Let the Dow and other share indices (by talk of the Fed pausing) run up to levels well above the line in the sand (at 10,000 on the Dow) knowing full well that the propaganda campaign to discredit Gold will by way of collateral damage also slam the Dow. The Dow will recover when the fed eases.

e) Make lots of Money, stealing it from anyone dumb enough to buy Gold or the shares.

Let's return for a moment to Frank Barbera and the Gold Analysts. Despite what I wrote above, I consider Frank a very knowledgeable and experienced analyst. The amazing thing about the recent runup was that just about everyone got it wrong. Many missed the move completely, others who were bullish missed calling the top and subsequent correction. The mistake technical analysts are making is that the Gold market has a participant that doesn't play by the rules. In fact they make the rules. They have unlimited funds. If they lose money it costs them nothing to replace it. They have a large staff of experts with access to market info and a comprehensive understanding of technical analysis and the power to make the charts say things that are in their interest. They now seem to have the power to read emails, faxes, tap phones and see trading positions in real time all in the name of national security.

What if Frank Barbera and the other analysts were right and Gold had corrected in early 2006. And then proceeded to rise gradually. We might be exactly where we are today without the fantastic volatility we've experienced. It is precisely these spikes and fast drops that gives the Cartel Members their huge profits. Money stolen from the little guy trying to protect his savings from confiscation. As Greenspan said:

"In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal,"

Why make it illegal, when it is so profitable for the Cartel. And at the same time the volatility discredits Gold, discourages investment, distorts valuations.

What about Russian and Chinese buying? Well except for the (planted?) rumors what evidence do we have? Yes, certain spokesman have stated that they plan to (as in the future) diversify their foreign exchange holding and add Gold, but if so, if they really were buyers at $550, $600, $650, and $700, why did they suddenly stop on May 12th? Why aren't they buying now when Gold is so much cheaper?

Where do we go from here?

Well the plan is to break Gold technically? To get the charts to look like a giant bubble has burst. To break the long term trend lines. To get the technical analysts to state that the Gold bull market is over.

To get YOU to sell the only asset that protects your savings from compensation.

Things to watch for:

a) Barricks quarterly report. Did they close out the Placer hedge book after the price break or not. If not, wouldn't that be strange. Buy back Gold at ever increasing prices and then stop just when the price breaks. Remember they were buying Gold at the rate of 1.5 m oz per month. They should have completed their Placer Hedge cover by the end of May.

b) Eurozone Gold sales. They have been running at well below a 10 tonne per week rate as indicated by the 500 tonnes per year Washington Agreement limit. They are now well below target. Have they been saving up this unsold Gold for a rainy day to dump all at once? Or will they really miss their target.

c) Reports that China or Russia have in fact added to their Gold holdings.

Cheers from Auckland and hold on to your Gold no matter what the charts prove.
Ed Wener