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Moolman: Silver vs. The Monetary System
More Banks in India to Import Gold, Silver
Precious Metals Prices Rally
EndlessMountain: Silver Chart Analysis 1.10.12
Gold in 2012 to Average $2,050/oz and Will Reach $2,500/oz - UBS
Morning Outlook from the Trade Desk - 01/10/12
Top analyst Gary Shilling's outlook for 2012
Two important charts to keep an eye on now
End of America: How to prepare for "difficult years ahead"
Gold Scaring Weak Hands, Hang on to Miners
Who Really Owns Your Gold Stocks?
Gold Will Make a New High on This Date
Chris Cook: Naked Oil
Precious metal prices rally
Why Has Gold Been Down?
Gold & Silver Market Morning, January 10, 2012
Seeking Direction in New Year
Jim Sinclair on Gold in the next 48 Hours
VISUALIZE: All The World's Gold
Dutch Central Bank Admits That 90% of Its Gold is Abroad: Repatriation Urged
Iran and Russia drop dollar for their own currencies in bilateral trade
The buzz builds: Reuters columnist rationalizes 'financial repression'
Alasdair Macleod: Financial repression
Ted Butler: Three elements of silver manipulation
Gold Could Hit $1,940 an Ounce in ’12: Goldman Sachs
U.S. Gold's McEwen expects investment mania in precious metals
Reasons For Gold’s Weakness
Gold Trading below its 200 Day Moving Average has Historically Meant Good Things
Gold & Silver Beat 99.8% of Wall Streets Finest
Another Look at Cheap Gold Stocks

Posted: 10 Jan 2012 03:25 AM PST

Silver In Direct Opposition to the Current Monetary System

What this debt-based monetary system has done, is to create what I call a "mirror-effect", whereby, silver (and gold) is pushed down in value, to a similar extent as to which paper assets such as general stocks are pushed up in value. This mirror-effect clearly shows up on the long-term charts of gold, silver and the Dow.

Here (in part 2), I would like to show how this "mirror effect" of silver versus the assets linked to the debt-based monetary system (general stocks in this case), shows up on the long-term charts. This "mirror effect", also reveals an interesting cycle, which provides more evidence to support my view, of the impending judgment of this system (monetary system), in terms of standards according to the Holy Scripture.

In part 1 (http://hubertmoolman.wordpress.com/2011/11/21/silver-price-forecast-why-silver-for-a-monetary-collapse-part-1/), I stated:

"We are at the edge of a major economic crisis. Our monetary system is the underlying cause of this major crisis. The massive debt bubble created by our monetary system is about to burst. The demonetization of gold and silver, has over the years diverted value from these metals, to all paper assets (such as bonds) linked to the debt-based monetary system.

The process of the devaluation of gold and silver, started by the demonetization of gold and silver, is about to reverse at a greater speed than ever before. This is similar to what happened during the late 70s, when the gold and silver price increased significantly. However, what happened in the 70′s was just a prelude to this coming rally. The 70′s was the end of a cycle, this is likely the end of a major cycle; an end of an era of the debt-based monetary system (dishonest money)."

~TVR

More Banks in India to Import Gold, Silver

Posted: 10 Jan 2012 03:19 AM PST

by Shivom Seth, MineWeb.com:

In a major fillip to the world's biggest consumer of precious metals, India's central bank, the Reserve Bank, has allowed four more banks to import gold and silver in the country. This brings the total number of banks allowed to import bullion to 35 in India. Bankers say the ensuing heavy competition is all set to bring on heavier discounts for consumers.

"Competition creates transparency in the price and could result in lower premiums. Ultimately, the customer gets the benefit, since each bank will try and woo them to their offered price," said Prateek Vyas, senior official with bullion importing IndusInd Bank in Mumbai. As if in tandem, silver spot prices on the Bombay bullion market jumped by $6.31 to touch $994.55 in the early hours of Tuesday.

Bank of Maharashtra, Yes Bank, Union Bank and ING Vysya Bank have been included in the list of banks allowed to bring in the precious metals. Gold and silver is still tightly regulated in the country with the Reserve Bank nominating certain state run and private sector banks to trade in bullion.

Read More @ CaseyResearch.com

Chris Cook: Naked Oil

Posted: 09 Jan 2012 09:55 PM PST

By Chris Cook, former compliance and market supervision director of the International Petroleum Exchange

All is not as it appears in the global oil markets, which in my view have become entirely dysfunctional and no longer fit for its purpose. I believe that the market price is about to collapse as it did in 2008 and that this will mark the end of an era in which the market has been run by and on behalf of trading and financial intermediaries.

In this post I forecast the imminent death of the crude oil market, and I identify the killers; the re-birth of the global market in crude oil in new form will be the subject of another post.

Global Oil Pricing
The "Brent Complex" is aptly named, being an increasingly baroque collection of contracts relating to North Sea crude oil, originally based upon the Shell "Brent" quality crude oil contract which originated in the 1980s.

It now consists of physical and forward BFOE (the Brent, Forties, Oseberg and Ekofisk fields) contracts in North Sea crude oil; and the key ICE Europe BFOE futures contract which is not a deliverable contract and is purely a financial bet based upon the price in the BFOE forward market.

There is also a whole plethora of other 'over the counter' (OTC) contracts involving not only BFOE, but also a huge transatlantic "arbitrage" market between the BFOE contract and the US West Texas Intermediate (WTI) contract originated by NYMEX, but cloned by ICE Europe.
North Sea crude oil production has been in secular decline for many years, and even though the North Sea crude oil benchmark contract was extended from the Brent quality to become BFOE, there are now only about 60 cargoes of BFOE quality crude oil (and as low as 50 when maintenance is under way), each of 600,000 barrels, delivered out of the North Sea each month, worth at current prices about $4 billion.

It is the 'Dated' or spot price of these cargoes – as reported by the oil price reporting service Platts in the 'Platts Window'– which is the benchmark for global oil prices either directly (about 60%) or indirectly, through BFOE/WTI arbitrage for most of the rest.
It will be seen that traders of the scale of the oil majors and sovereign oil companies do not really have to put much money at risk by their standards in order to acquire enough cargoes to move or support the global market price via the BFOE market.

Indeed, the evolution of the BFOE market has been a response to declining production and the fact that traders could not resist manipulating the market by buying up contracts and "squeezing" those who had sold forward oil they did not have and causing them very substantial losses. The fewer cargoes produced; the easier the underlying market is to manipulate.

As a very knowledgeable insider puts it….

The Platts window is the most abused market mechanism in the world.

But since all of this short term 'micro' manipulation or trading (choose your language) has been going on among consenting adults in a wholesale market inaccessible to the man in the street. It is pretty much a zero sum game, and for many years the UK regulators responsible for it – ie the Financial Services Authority and its predecessor – have essentially ignored it, with a "light touch" wholesale market regime.

If the history of commodity markets shows us anything it is that if producers can manipulate or support prices then they will, and there are many examples of which the classic cases are the 1985 tin crisis, and Yasuo Hamanaka's 10 year manipulation of the copper market on behalf of Sumitomo Corporation.

When I gave evidence to the UK Parliament's Treasury Select Committee three years ago at the time of the last crude oil bubble I recommended a major transatlantic regulatory investigation into the operation of the Brent Complex and in particular in respect of the relationship between financial investors and producers, and the role of intermediaries in that relationship.

I also proposed root and branch reform of global energy market architecture, which in my view can only come from producer nations and consumer nations collectively, because intermediary turkeys will not vote for Christmas.

A Meme is Born

In the early 1990′s Goldman Sachs created a new way of investing in commodities. The Goldman Sachs Commodity Index (GSCI) enabled investment in a basket of commodities – of which oil and oil products was the greatest component – and the new GSCI fund invested by buying futures contracts in the relevant commodity markets which were 'rolled over' from month to month.

The genius dash of marketing fairy dust which was sprinkled on this concept was to call investment in the fund a 'hedge against inflation'. Investors in the fund were able to offload the perceived risk of holding dollars and instead take on the risk of holding commodities.

The smartest kids on the block were not slow to realise that the GSCI – which was structurally 'long' of commodity markets – was taking a long term position which was precisely the opposite of a commodity producer who is structurally 'short' of commodities because they routinely sell futures contracts in order to insure themselves against a fall in the dollar price. ie commodity producers are offloading the risk of owning commodities, and taking on the risk of holding dollars.

So in 1995 a marriage was arranged.

BP and Goldman Sachs get Married

From 1995 to 2007 BP and Goldman Sachs were joined at the head, having the same chairman – the Irish former head of the World Trade Organisation, Peter Sutherland. From 1999, until he fell from grace in 2007 through revelations about his private life, BP's CEO Lord Browne was also on the Goldman Sachs board.

The outcome of the relationship was that BP were in a position, if they were so minded, to obtain interest-free funding via Goldman Sachs, from GSCI investors through the simple expedient of a sale and repurchase agreement: ie BP could sell title to oil with an agreement to buy back the oil later at an agreed price.

The outcome would be a financial 'lease' of oil by BP to GSCI investors and the monetisation of part of BP's oil inventory. Such agreements in relation to bilateral physical oil transactions are typically concluded privately, and are invisible to the organised markets. However, any risk management contracts which an intermediary such as Goldman Sachs may enter into as a counter-party to both a fund and a producer are visible on the futures exchanges.

Due to the invisibility of the change of ownership of inventory 'information asymmetry' is created where some market participants are in possession of key market information which others do not have. This ownership by investors of inventory in the custody of a producer has been termed 'Dark Inventory'

I must make quite clear at this point that only BP and Goldman Sachs know whether they actually did create Dark Inventory by leasing oil in this way, and readers must make up their own minds on that. But I do know that in their shoes, I would have done, particularly bearing in mind that such commodity leasing is a perfectly legitimate financing stratagem which has been in routine use in the precious metals and base metal markets for a very long time indeed.

Planet Hype

The 'inflation hedging' meme gradually gained traction and a new breed of Exchange Traded Funds (ETFs) and structured investment products were created to invest in commodities. In 2005 Shell entered quite transparently into a relationship with ETF Securities which enabled them to cut out as middlemen both investment banks and the futures market casinos, and with them the substantial rent both collect.

Other investment banks also started to offer similar products and a bandwagon began to roll. From 2005 to 2008 we therefore saw an increasing flood of dollars into the oil market, and this was accompanied by the most shameless, and often completely misleading hype, and led to a bubble in the price.

There was (and still is) no piece of news which cannot be interpreted as a reason to buy crude oil. The classic case was US environmental restrictions on oil products, which led to restricted supply, and to price increases in oil products. Now, anyone would think that reduced refinery throughput will reduce the demand for crude oil and should logically lead to a fall in crude oil prices.

But on Planet Hype faulty economic logic – the view that higher product prices are necessarily associated with higher crude oil prices – was instead used as justification for the higher crude oil prices which resulted from the financial buying of crude oil attracted by the hype.

You couldn't make it up: but unfortunately, they could, and they did.

More worrying than mere hype was that a very significant amount of oil inventory had actually changed hands from producers to investors. Only those directly involved were aware that below the visible part of the oil market iceberg lurked massive unseen 'Dark Inventory'.

Greedy Speculators and Hoarding

The pervasive narrative among people and politicians, and which is spread by a campaigning press, is of 'greedy speculators' who are 'hoarding' commodities and 'gouging' consumers in search of a transaction profit.

There is no better example of this meme than the UK's Daily Mail scoop on 20th November 2009.

Here we saw pictures of shoals of some 54 shark-like tankers loaded with oil lurking off the UK coast with millions of barrels of 'hoarded' crude oil, some of them having been there since April 2009. The Mail's story was that these tankers were full of hoarded oil whose greedy owners were waiting for prices to rise before gouging the public.

The reality was rather different.

The motivation of the investors involved was not greed but fear. The Fed had been busily printing another trillion in QE dollars to buy securities and the sellers, and other investors aimed not to make a dollar profit but rather to avoid a dollar loss.

So they poured $ billions into oil index funds and similar products and the oil leases/loans which accommodated these funds' financial purchases of oil had the effect of raising forward prices and of depressing the spot price, thereby creating what is known as a market 'in contango'.

When the forward price is high enough in a contango market what happens is that traders will borrow money to buy crude oil now, and sell the oil at the higher price in the future. Provided the contango is high enough, they will cover interest costs, and the cost of chartering and insuring the vessel and its cargo, and lock in a profit for the trader at the end.

This is exactly what traders did through the summer of 2009, until the winter demand by refineries for crude oil and a reduction in the flow of QE dollars into the market combined to see the stored oil gradually delivered to refineries and the sharks depart the UK shores.

The point is that the widely held perception of high oil prices being the fault of hoarders and greedy speculators is – apart from very short term 'spikes' in the price, entirely misconceived. And even when speculators do dabble in oil markets, they are almost always pillaged by traders and investment banks with much better market information, which is probably what is happening right now.

The Bubble Bursts

In 2008 there was an influx of genuine speculators in search of short term transaction profit. The motivation of inflation hedgers, on the other hand, is the avoidance of loss, which leads to different market behaviour and the perverse outcome that they have been responsible for causing the very inflation they sought to avoid.

The price eventually reached levels at which demand for products began to be affected and shrewd market observers began to position themselves for the inevitable bursting of the obvious bubble. But those market traders and speculators who correctly diagnosed that the price would collapse were unaware of the existence of the Dark Inventory of pre-sold oil sitting invisibly like an iceberg under the water.

Traders who had sold off-exchange Brent/BFOE contracts or deliverable WTI contracts found themselves 'squeezed' because title to the crude oil which they thought would be available at a cheaper price to fulfil their contractual commitment had been 'pre-sold' to financial investors. This meant that they had to scramble to buy oil at a higher price than they had expected.

The price spiked to $147 per barrel and then declined over several months all the way to $35 per barrel or so as many of the index fund investors pulled their money out of the market in late 2008 and joined a stampede to the safety of US Treasury Bills. What was happening here was that the Dark Inventory which had been created flooded back into the market, and overwhelmed the market's capacity to absorb it.

Convergence and Futures Pricing

The oil market price is – by definition – the price at which title to dollars is exchanged for title to crude oil.

But there is very considerable debate among economists about the effect of derivative contracts on this spot market price, and whether it is the case that the futures market converges on the physical market price or vice versa.

Now, in the case of a deliverable exchange futures contract, a price is set for delivery of a standardised quantity of a particular specification of a commodity at a particular location within a specified period of time. If that contract is held open until the expiry date and time then there will indeed be a spot delivery and payment against documents at the original price. in accordance with the exchange's contractual terms.

But the key point is that this futures contract will not be held open to the expiry date at the original price unless the physical market price – which is set by physical supply and demand – is actually at that price at that specific point in time. If the physical price is lower or higher, then the futures contract will be closed out through a matching purchase or sale and a profit or loss will be taken.

I managed the International Petroleum Exchange's Gas Oil contract for six years, which was deliverable in North West Europe, and the final minutes of trading before contract expiry were Europe's greatest game of 'chicken'.

Moreover, no IPE broker in his right mind would dream (because the broker was responsible to the London Clearing House for defaults) of letting a financial investor with no capability of making or taking delivery hold a position into the last month before delivery. And if a broker was not in his right mind, it was my job to act under the exchange rules to ensure such positions were liquidated.

In other markets, the ability to own physical commodities – eg through ownership of warehouse warrants – is much more straightforward for investors. But the logistics of oil and oil products are such that financial investors are simply incapable of participating in the physical market. In my view the use of position limits for financial investors in crude oil and oil products is of little or no use if the clearing house, exchange and brokers are doing their job.

Finally, now that the US WTI contract is just the tail on the Brent/BFOE physical market dog, this discussion has moved on, since the ICE Brent/BFOE futures contract is in fact settled in cash against an index based on trading in the BFOE forward market, with no physical delivery. It is simply a straightforward financial bet in relation to the routinely manipulated underlying BFOE physical market price. ie the question of convergence does not arise.

Anything but Dollars

With interest rates at zero per cent, and with the Federal Reserve Bank printing dollars through QE, a tidal wave of money flowed into equity and commodity markets purely as an alternative to the dollar, and they did so through a proliferation of funds set up by banks.

Note here that the beauty of such funds for the banks is that it is the investors who take the market risk, not the banks, and the marketing and operation of funds has become a very profitable use of scarce bank capital.

So a flood of financial purchasers of oil were looking for producers willing and able to sell or lease oil to them.

Producers in Pain

Producing nations who had massively expanded their spending in line with a perceived 'sellers' market' paradigm where they had the whip hand, were badly hurt by the 2008 price collapse and OPEC took action to restrict production.

But might some OPEC members or other producing nations have gone further than this?

What is clear is that the price rose swiftly in 2009 and then remained roughly in a range between $70 and $90 per barrel until early 2011 when twin shocks hit the oil market. Firstly, there was the supply shock in Libya which saw 1.5m bbl per day of top quality crude oil leave the market, and secondly, the demand shock of Fukushima, which saw a dramatic switch from nuclear to carbon-fuelled energy.

My thesis is that Shell, directly, and others indirectly were not the only ones leasing oil to funds. I believe that it is probable that the US and Saudis/GCC reached – with the help of the best financial brains money can rent – a geo-political understanding with the aim that the oil price is firstly, capped at an upper level which does not lead to politically embarrassing high US gasoline prices ; and secondly, collared at a level which provides a satisfactory level of Saudi/GCC oil revenues.

The QE Pump Stops

In June 2011 the QE pump which had been keeping commodity and equity markets inflated and correlated stopped, and price levels began to decline. Consumer demand – as opposed to financial demand – for commodities had also been affected not only by high prices, but by reduced demand from developed nations for finished goods. In September 2011 more than $9bn of index fund money pulled out of the markets for the safe haven of T-bills.

What happened as a result was that the regular rolling over of oil leases, and the free dollar funding for producers of their oil inventory ceased. So the leased oil returned to the ownership of the producers, while the dollars returned to the ownership of the funds.

Since the 'repurchases' were no longer occurring, the forward oil price fell below the current price, and this 'backwardation' was misinterpreted by market traders and speculators . They believed that the backwardation was – as it usually is – a sign that current demand was high and increasing relative to forward demand, whereas in this false market the current demand is unchanged but the forward demand is decreasing.

As in 2008, speculators and traders were again suckered too soon into the market, and this led to profits at their expense to those with asymmetric information, and a 'pop' upwards in the price as they were forced to close speculative short positions. My information is that a major oil market trader was successfully able to 'squeeze' the Brent/BFOE market on at least two occasions in late 2011 precisely because they were aware of the true situation of inventory ownership, and the rest of the market was not.

As an insider puts it……

You can't have proper price discovery when half of the inventory is being sold elsewhere at a different price. On exchange physical doesn't even exist. Futures are converging to physical, but only the physical which is visible for Platts assessment.

….pointing out that transactions in respect of physical ownership of oil do not take place on an exchange, and that there is effectively a 'two tier' market. Only a proportion of spot or physical Brent/BFOE transactions therefore actually form the basis of the Platts assessment of the global benchmark oil price.

Enter Iran

In my view there is little or no chance of military action against Iran, and having been to Iran five times in recent years, and as recently as two months ago, there is much I could write on this subject.

While financial sanctions have been pretty smart, and increasingly effective so far, the medium and long term effect of the proposed EU oil embargo – which will in fact affect only a pretty minimal and easily accommodated amount of demand which is evaporating anyway – is more apparent than real.

While there would undoubtedly be a short term price rise – cheered on by the usual suspects – in the medium and long term the embargo will act to reduce oil prices. This is because Iran will necessarily have to sell oil at below market price to China and others, and since the market is over-supplied, particularly in Europe, this will undercut market prices generally.

Mexico has routinely hedged oil production for years, and Qatar – who are very shrewd operators – began to do the same in November 2011 since they expect the price to fall this year. In the short term the Iran 'crisis' is in my view being hyped for all it is worth to entice yet more unwary speculators into the oil market so that other producers may sell their production forward at high prices while they last before the inevitable and imminent collapse.

Current Position

If you believe the investment banks – who all have oil funds to sell to the credulous – Far Eastern demand is holding up, supplies are tight, and stocks are low, so prices are set to rise to maybe $120 or above in 2012, even in the absence of fisticuffs involving Iran.

I take a different view. I see real demand – as opposed to financial demand and stock-piling, such as in the copper market – declining in 2012 as the financial crisis continues at best, and deepens at worst, particularly in the EU. Stocks are low because bank financing of stock is disappearing as banks retrench, and it makes no sense for traders to hold stocks if forward prices are lower than today's price.

As for supplies, US crude oil production is probably higher, and consumption lower, than widely appreciated. Elsewhere, there is plenty of oil available now that much of the Dark Inventory has been liquidated, and this liquidation was probably why in November 2011 we saw the highest Saudi monthly deliveries in 30 years.

Finally, we see North Sea oil being shipped – for the first time since 2008 – half way around the world to find Far East buyers. We also see Petroplus, a major independent Swiss refiner, crippled by inflated crude oil prices, and shutting down three refineries because demand for its products has disappeared, and it can no longer finance crude oil purchases now that banks have pulled its credit lines.

In my world, refineries closed due to reduced demand for their products imply a reduction in demand for crude oil: but not, apparently, on the Planet Hype of investment banks with funds to sell.

History does not repeat itself, but it does rhyme, and my forecast is that the crude oil price will fall dramatically during the first half of 2012, possibly as low as $45 to $55 per barrel.

Then What?

As the price collapses we will see producer nations generally and OPEC in particular once again going into panic mode, and genuinely cutting production. We will also see the next great regulatory scandal where a legion of risk-averse retail investors who have lost most or all of their investment will not be pleased to hear that they were warned on Page 5, paragraph (b); clause (iv) of their customer agreement that markets could go down as well as up.

At this point, I hope and expect that consumer and producer nations might finally get their heads together and agree that whereas the former seeks a stable low price, and the latter a stable high price, they actually have an interest – even if inte

Precious metal prices rally

Posted: 09 Jan 2012 09:15 PM PST

Precious metal prices continue to face headwinds in the form of gains in the US dollar against other major currencies, though in trading this morning all the metals have logged decent gains. Platinum ...

Why Has Gold Been Down?

Posted: 09 Jan 2012 09:00 PM PST

Gold & Silver Market Morning, January 10, 2012

Posted: 09 Jan 2012 09:00 PM PST

Seeking Direction in New Year

Posted: 09 Jan 2012 08:42 PM PST

Looking further ahead, we can see this market rising to an annual top at the end of April before the spring-May sell-off.

Dow Jones Industrial Average: Closed at 12359.92 -55.78 as we see new support at 12,250 on our forecast with new resistance at 12,500 on both the price and new technicals. Volume was normal and momentum was up. Price is solidly above all moving averages, which is bullish. Two channel lines and three moving averages are all converging in a somewhat bullish continuation triangle covering over three months. We can see this rally in the Dow extending until the middle of February. If that forecast is correct, the Dow will have a chance to touch 12,750. Looking further ahead, we can see this market rising to an annual top at the end of April before the spring-May sell-off. That pivot reverse to selling should be -12 to 15% from the end of April's high. The news and daily action during the March Brussels meeting, if perceived to be of any value, would drive the Dow higher. If it solves nothing, or is negative, the Dow could go flat in later March and turn into choppy protracted selling for several sessions. For now we get up-markets for 4-5 weeks.

S&P 500 Index: Closed at 1277.81 -3.25 on normal volume and up-momentum. Price has broken-up and through the top of the long, continuation triangle on our forecast. Next higher resistance is 1290 and 1318. Price is bullish above all moving averages. The price is in a tight coil somewhat like the Dow chart. Usually this pattern, when seen after a breakout, is quite bullish. Support is 1275 and we can see this pattern taking the 500 Index to 1325-1350 before mid-February selling on a normal over-bought correction. New support is 1275. Volume was about -10% under the 50-day moving average as markets move back-up post-holiday normal. Expect more buying on higher volume and trading next week.

S&P 100 Index: Closed at 580.53 -1.83 on normal volume but on faster rising momentum than the Dow and 500 index. This means the big funds are beginning to buy and should continue to buy more shares as we go deeper into the first quarter. This is important as they are the foundation and provide the largest volume for all the indexes. New resistance and support it 580.00. There is a top-down sloping channel line that shows the next higher resistance. That line is near 595 and when broken through, the price should only pause briefly at 600 and keep rising. The annual top for 2011 was near 620 and we could see that price touched in February, or after the next correction at the end of April. Expect more buying next week.

Nasdaq 100 Index: Closed at 2356.17 +7.19 on normal volume and sharply rising momentum similar to the 100 index. The price, after breaking up and out of the triangle pattern, gapped up after New Years holiday and closed in the top of the trading bar for today. This shows a bullish trading day but more importantly signals some real heavy up-side pressures for the week. New support is 2350 and resistance is 2400. Expect more buying next week and if the effort is very strong, this would signal additional upside leadership for all the stock indexes, which we do forecast.

30-Year Bonds: Closed at 142.02 +0.75 on gently falling momentum. The price pattern is showing a sloppy, selling, head and shoulders top. Bonds remain firm about 140.00 but, they are ready to sell more as stocks rise. Importantly, the bond price fell under the 45 degree up-sloping support channel line. The close was above the 50 and 200 day averages but is now nearly ½ point under the 20-day moving average. The price is still trying to cling to the bottom of the channel support line but we can see that support slipping away next week. For our second week of trading this month, the 30-year bonds should sell to 140.00 support, which is quite strong. That's a two point drop in five trading sessions next week.

XAU: Closed at 187.17 -1.85 on momentum just beginning to cross-over from negative to positive. We saw many of favorite juniors, seniors and intermediates go green this week. But the stronger buying power has not yet arrived. Price is on the 20-day average, but closed on a down bar. Price remains under the 50 and 200 day moving averages. The metal-to-shares ratio, so useful for predicting trends, is still bottom crawling with no signs of perking-up as yet. Until the gold and silver can provide a stronger rally, the shares are flat to down for the next two weeks. Look for the base to arrive on January 20 with a new rally to start on Monday, 1-23-12. On that date, we should see rallies in gold, silver and the related shares. Meanwhile, the XAU can sell to 180 support first, and then do a pivot reverse up on 1-23-12.

Gold: Closed at 1616.50 after touching 1626.50 on the February most active futures today. It was the end of the week and we now see firm gold support at $1550. The price is under all moving averages but remains supported just above the 200-day average at 1614.69. I would call the close of 1616 and 1614.69 both support and resistance at 1615.50. Seasonally, we are seeing gold sell until the last week of January. After that date, gold should begin a longer range rally from the end of January all the way to this fall.

Gold Continued: We should look for more selling over the next two weeks taking price back to a bull double bottom of $1,550-1565 followed by a 300 point rally to the end of April. This would take us back to an end of April double top at $1,923. Between the end of April's 1,923 and a pause; the end of July-first of August rally could add another 300- 350 points taking gold to a $2,012 high of $2,226 to $2,275. This new technical projection matches our next higher price forecasts of $2,000, $2,226 (interim) and then $2,275, $2,400-2,450. Note that these are technical numbers. Should some geopolitical event arise and we are expecting a whole list of things that could happen; this would temporarily move these numbers either up or down. However, should that occur, the prices tend to return to track those technicals we have just provided.

Silver: Closed at $28.73 -0.56 beneath all moving averages. While momentum just turned up this week, we are forecasting silver to sell again and form a new bull double bottom over the next two weeks. The low could be $26.48 followed by a new and very strong rally. Last year from the end of January to the end of April, silver rallied over $20 to $49.62. We are expecting another powerful silver rally in that same time cycle as silver has been so oversold. A 50% positive retracement would take silver to $38.00-$38.85 on our recent and previous forecast. After that goal is achieved and we have a minor correction, silver should continue to rally to at least $43.85-$44.85 and perhaps higher going into the end of April. Then, depending upon numerous other factors, silver could resume its run to $48.48-$49.48 followed by a breakout to $59.85; perhaps in the fall of 2012 in September.

US Dollar: Closed at 81.24 +0.35 on flat to mildly rising momentum. Price had a breakout from the 80.00 magnet number this week. With the Euro tumbling under 130 and now at 127.22, the dollar should rise to 81.50, 82.00 and then 82.50 by the end of January or sooner. New support is 81.00 and resistance is 81.50. We can see another four point rally to 85.85.50 with 2-3 weeks. If this occurs the Euro will sell to 125.50 and then 123.50. Expect the dollar to rise to 82.50 next week as the Euro seeks 125.50.

Crude Oil: Closed at 102.00 +0.63 on both fundamentals and technicals. Iran news continues to support oil and reserves have been short to adequate over the past 3-4 weeks. The 20-day moving average is support at 99.71; and resistance is 102.50. We are seeing a double top near $104. Seasonally on the cycles, oil can sell the last two weeks of this month before finding new support for the next rallies. Those could begin in mid-February with the spring rise going to $115.00 as a minimum. Iran has a $10 premium on oil with most built in at this juncture. February is the top for heating oil demand at refineries followed by shutdowns to change-over for the spring gasoline build. OPEC would like to see a steady price near $85.00. We say they get their wish and then some with a higher crude oil low for the first of half of 2012 at 92.50. Next week we get some light buying. The last two weeks of January should see some more buying.

CRB: Closed at 309.48 +0.94 on the 50-day moving average. Price is above the 20 day at 307.27 but under the larger, 20-day average at 320.71. The CRB should sell back to 300 support this month followed by a new rally in the last week of January. We can see a repeat of last years' first half taking the CRB to 370 resistance. New support is 307 with resistance at 320. -Traderrog

This posting includes an audio/video/photo media file: Download Now

Jim Sinclair on Gold in the next 48 Hours

Posted: 09 Jan 2012 08:35 PM PST

Jim Sinclair talks with Ellis Martin about a big surprise that awaits the gold market in the next 48 hours.

~TVR

VISUALIZE: All The World's Gold

Posted: 09 Jan 2012 08:34 PM PST

Enjoy this elaborate infographic titled All the Worlds Gold.
from numbersleuth.org:

CLICK IMAGE FOR LARGER VIEW

~TVR

Dutch Central Bank Admits That 90% of Its Gold is Abroad: Repatriation Urged

Posted: 09 Jan 2012 08:24 PM PST

¤ Yesterday in Gold and Silver

The gold price got sold down the moment that trading began in New York on Sunday evening. The low of the day [about $1,605 spot] was in shortly after 9:00 a.m. Hong Kong time...and from there the price rallied pretty sharply going into the London open.

Then about 8:15 a.m. GMT, the high of the day was in...and the gold price came under pressure for the balance of the Monday trading session. Gold attempted a rally at the Comex open...but a willing seller was waiting...and every subsequent rally attempt after that, ran into more selling.

Gold's high of the day was around $1,623 spot at 8:15 a.m. in London...but closed at $1,611.00 spot...down $5.60 on the day. Volume, net of all roll-overs, was not overly heavy at 105,000 contracts.

Silver's price path on Monday was the just about the same. Silver's low price tick came just before 1:00 p.m. Hong Kong time and, like gold, the price rallied strongly into the London open...but ran into a willing seller shortly after 8:30 a.m.

Then it followed gold price pattern almost exactly...rally beginning just before the Comex opened...capped shortly after 9:30 a.m. in New York...and every subsequent rally attempt got sold off.

The only real difference was the silver managed to close in the plus column at $29.05 spot...up 30 cents on the day. Net volume was pretty light at around 27,000 contracts.

The dollar index spiked up about 25 basis points right at the open at 6:00 p.m. on Sunday night...and that would certainly account for the gap down in the gold price at the open as well.

But the sell-off in gold around 8:30 a.m. in London preceded the 5:40 a.m. Eastern time low in the dollar by a good two hours...and after that, the dollar chopped higher until about 11:10 a.m. in New York, before heading lower.

The dollar finished down about 25 basis point from its Sunday night New York open...and although the gold price followed the dollar move closely, it certainly didn't follow it exactly...as gold was the only precious metal that posted a loss on Monday.

Here's the 3-year dollar chart. Reader Scott Pluschau pointed out that the dollar fizzled out again at the current high price point. If I had to bet ten bucks at this juncture, I'd say the dollar may get sold down from here...but the exact timing of this event is uncertain.

The gold stocks pretty much followed the price pattern of the underlying metal...but managed to close in the black, as the HUI finished up 0.41%.

Even though silver closed up 30 cents on the day, the silver stocks as a group didn't do much...and Nick Laird's Silver Sentiment Index was up only 0.31%.

(Click on image to enlarge)

The CME's Daily Delivery Report showed that only 1 gold, along with 42 silver contracts, were posted for delivery tomorrow. The only short/issuer once again was Jefferies...and the only two long/stoppers were the Bank of Nova Scotia and JPMorgan. The link to what little activity there was, is here.

There were no reported changes in either GLD or SLV yesterday.

The U.S. Mint had another sales report. They sold another 4,500 ounces of gold eagles...and 410,000 silver eagles. Month-to-date the mint has sold 79,000 ounces of gold eagles...3,500 one-ounce 24K gold buffaloes...and 3,957,000 silver eagles.

Friday was another busy day over at the Comex-approved depositories. They reported receiving 595,036 troy ounces of silver...and shipped a chunky 1,010,029 ounces out the door. The link to all that action is here.

Here are a couple of free paragraphs from silver analyst Ted Butler's weekend commentary to his paying clients...

"Changes in the visible stocks of silver have garnered attention this week...and over the past month or so. COMEX silver warehouse stocks have surged higher while there have been some notable withdrawals from the big silver ETF, SLV. Whether there is a direct connection for silver moving from the SLV to the COMEX warehouses is hard to say, but I suppose it's possible. As I indicated recently, there are always many possibilities for why silver would come into or out from the COMEX warehouses and it is usually near impossible to know for sure. I also wrote recently that it would not surprise me to see COMEX silver inventories rise by 10 or 20 million ounces and we are now more than half way to the upper level of that range. Even if the COMEX silver inflow is not directly related to the decline in SLV holdings, my main point is that any increase in COMEX totals should not automatically be interpreted as representing a surplus and being bearish on price. That's because there are so many possible explanations."

"Sales of Silver Eagles appear to have caught investors' favor again, based upon strong sales from the US Mint for the New Year. Obviously, it's too soon to reach definite conclusions about the state of silver retail demand, so the situation must be monitored. A new report confirmed a recent observation of mine that sales of Silver Eagles for 2011 accounted for the entire US mine production for the year. This is quite shocking when you think about it, as the US is the world's seventh largest silver producing country. (The report also confirmed that Canada's entire silver mine production was consumed by the sale of Silver Maple Leafs last year.) The US is considered to be the largest silver consumer in the world (although I think China may now be larger). Since all the silver produced by US mines was consumed by the sale of Silver Eagles that means the US import reliance on foreign supplies of silver has never been greater, even greater than for petroleum. That might be something to keep in mind when thoughts of silver oversupply crop up on increasing COMEX warehouse totals."

I also received a full commentary about last Friday's Commitment of Traders Report from ewfresearch.com. Along with his excellent graphs and analysis in that report, he has also included commentary headlined "Extreme Silver Probabilities". The link to that...and the gold and silver COT reports...is here.

Here's another nifty chart that's courtesy of Washington state reader S.A...and it needs no further embellishment from me, as it's self-explanatory.

It was a busy weekend for stories...and I have quite a few for your reading pleasure today.

It seems likely that the only way that the 'big 8' Commercial traders in silver are going to doing any more serious short covering is to the upside.

Ted Butler: Three elements of silver manipulation. Gold Will Make a New High on This Date: Jeff Clark. U.S. Gold's McEwen expects investment mania in precious metals.

¤ Critical Reads

The Never Ending MF Global Story: Regulators Block The Truth

Instead of looking out for MF investors – and customers who are still waiting for their money – it looks like regulators and the bankruptcy trustees are busy suppressing information. Instead of full transparency, regulators and the trustees are holding onto crucial details that might tell us all who was asleep at the wheel when the broker/dealer and futures commission merchant (FCM) headed over the cliff.

Bob English, an independent trader and contributing editor to the blog, Economic Policy Journal, published a post Monday morning that raises serious questions about the Securities and Exchange Commission's program of regulation for broker/dealers and, in particular, the agency's role in keeping the truth from the public about what went wrong at MF Global. We're also being kept from the truth about other broker/dealers who may be putting risky trades on their books or whose controls over segregation of customer assets may be weak or non-existent.

Like I told Dr. Dave Janda in my radio interview on Sunday...all of Wall Street is a criminal organization, including the 'regulators'.

Reader 'David in California' sent me this story that was posted over at the forbes.com website yesterday...and the link is here.

View full GSD edition

From East and West, Foreclosure Horror Stories

The authorities have fallen silent lately about a possible settlement over foreclosure abuses at big mortgages servicing companies.

The talks began in earnest last March, and people keep whispering that a deal is nigh. But last week, a spokesman for Shaun Donovan, the secretary of Housing and Urban Development and a lead negotiator, said that there was nothing new to report.

That's probably not a terrible thing. After all, no deal is better than a bad deal. State and federal authorities jumped into these talks without conducting serious investigations into foreclosure shenanigans. Why strike a deal — one that would, say, shield banks from new litigation over toxic loans, flawed securitizations and the mess at MERS, the registry that has made such a jumble of land records — without knowing what happened?

If you're caught up in the mortgage fraud web in the U.S...this Gretchen Morgenson story in the Sunday edition of The New York Times is a must read...and the link is here.

View full GSD edition

Alasdair Macleod: Financial repression

Economist and former banker Alasdair Macleod, who spoke at GATA's London conference last August, examines "financial repression" today in his new essay at GoldMoney. "Financial repression" involves various forms of market rigging by government, and while it appears to have worked for a while just after World War II, Macleod is doubtful about its prospects today. His commentary is headlined "Financial Repression" and it's posted at the goldmoney.com website.

I borrowed this commentary from a GATA release on Sunday...and I thank Chris for writing the preamble. The story is must read...and the link is here.

View full GSD edition

The buzz builds: Reuters columnist rationalizes 'financial repression'

No sooner had Alasdair posted his comments regarding the BIS paper on 'financial repression' when an article showed up in a Reuters column on Sunday saying that this was, all in all, a wonderful idea.

As Chris Powell added in the GATA dispatch where the story was imbedded..."Gold price suppression [and silver - Ed] can't quite yet be mentioned in this propaganda, but it fits perfectly. Indeed, it's the keystone of the operation."

That is indeed the case...and I suppose that a little strychnine in your drinking water wouldn't do you any harm, either. The link to this must read Reuters story is here.

View full GSD edition

Dr. Dave Janda interviews your humble scribe

The good doctor was kind enough to interview me on his Operation Freedom radio program over at WAAM 1600 All-Talk radio out of Ann Arbor, Michigan on Sunday afternoon. It lasts about twenty-five minutes...and the link to the mp3 file is here.

View full GSD edition

Iran and Russia drop dollar for their own currencies in bilateral trade

Iran and Russia have replaced the U.S. dollar with their own currencies in their trade ties, a senior Iranian diplomat announced on Saturday.

Speaking to FNA, Tehran's ambassador to Moscow, Seyed Reza Sajjadi said that the proposal for replacing the dollar with the ruble and rial was raised by Russian President Dmitry Medvedev in a meeting with his Iranian counterpart, Mahmoud Ahmadinejad, in Astana on the sidelines of the Shanghai Cooperation Organization meeting.

"Since then we have acted on this basis and a part of our interactions is done in ruble now," Sajjadi stated, adding that many Iranian traders are using the ruble for their trade deals.

This story was posted by the FARS News

Iran and Russia drop dollar for their own currencies in bilateral trade

Posted: 09 Jan 2012 08:24 PM PST

Iran and Russia drop dollar for their own currencies in bilateral trade

Iran and Russia have replaced the U.S. dollar with their own currencies in their trade ties, a senior Iranian diplomat announced on Saturday.

"Since then we have acted on this basis and a part of our interactions is done in ruble now," Sajjadi stated, adding that many Iranian traders are using the ruble for their trade deals.

The buzz builds: Reuters columnist rationalizes 'financial repression'

Posted: 09 Jan 2012 08:24 PM PST

The buzz builds: Reuters columnist rationalizes 'financial repression'

That is indeed the case...and I suppose that a little strychnine in your drinking water wouldn't do you any harm, either. The link to this must read Reuters story is here.

Alasdair Macleod: Financial repression

Posted: 09 Jan 2012 08:24 PM PST

Alasdair Macleod: Financial repression

I borrowed this commentary from a GATA release on Sunday...and I thank Chris for writing the preamble. The story is must read...and the link is here.

Ted Butler: Three elements of silver manipulation

Posted: 09 Jan 2012 08:24 PM PST

Ted Butler: Three elements of silver manipulation

Silver market analyst Ted Butler explains why silver market manipulation would be easier to prove than Bart Chilton of the U.S. Commodity Futures Trading Commission may think, and he wonders why the commission's latest investigation of the silver market has gone on for 3 1/2 years without result.

The contents of this GATA release...along with the Bart Chilton interview over at the financialsense.com website, imbedded in Ted's commentary...are all absolute must reads and must listens...and I urge you to give these commentaries the time that they richly deserve.

The link to the GATA release is here.

Gold Could Hit $1,940 an Ounce in ’12: Goldman Sachs

Posted: 09 Jan 2012 08:24 PM PST

Gold Could Hit $1,940 an Ounce in '12: Goldman Sachs

Goldman Sachs Group Inc. is staying "overweight" on commodities as a rebound in demand revives speculation of shortages, with gold a favorite for 2012 as investors seek a hedge against Europe's debt crisis.

Gold futures traded on the Comex in New York may climb to $1,940 an ounce in 12 months as U.S. interest rates and inflation are expected to remain low, Jeffrey Currie, head of commodities research, said at the company's Strategy Conference 2012 in London today, repeating the bank's December forecast.

U.S. Gold's McEwen expects investment mania in precious metals

Posted: 09 Jan 2012 08:24 PM PST

U.S. Gold's McEwen expects investment mania in precious metals

Mining entrepreneur Rob McEwen sure didn't sound discouraged in his interview with King World News yesterday. McEwen, founder of gold monster Goldcorp and now CEO of U.S. Gold, says money printing will carry the precious metals into an investment mania. An excerpt from the interview is posted at the King World News website...and the link is here.

Reasons For Gold’s Weakness

Posted: 09 Jan 2012 08:24 PM PST

Reasons For Gold's Weakness

Bron Suchecki over at The Perth Mint has a comment about Jeff Clark's article posted above. In it he states..."I agree with Jeff Clark from Casey Research, who says investors should not "confuse short-term volatility with long-term forces" and stay the course. In this article I discuss the short-term factors Jeff identifies, and also analyse the recent decline in Indian consumer demand, another significant issue in the gold market."

This blog, posted over a the perthmintbullion.com website, is a must read as well...and the link is here.

Gold Trading below its 200 Day Moving Average has Historically Meant Good Things

Posted: 09 Jan 2012 05:39 PM PST

Gold & Silver Beat 99.8% of Wall Streets Finest

Posted: 09 Jan 2012 05:22 PM PST

Another Look at Cheap Gold Stocks

Posted: 09 Jan 2012 05:19 PM PST