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Thread: weekend commentary - 'manipulation' of the gold market ???

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    Default weekend commentary - 'manipulation' of the gold market ???

    from

    (snip)"The U.S. Mint today supplied to U.S. Rep. John B. Larson, D-Connecticut, the statement appended here about its suspension of sales of one-ounce gold coins. GATA requested Larson's help on Monday after two days of calls to the Mint failed to elicit the responses that were promised each time GATA called. As of this hour the Mint still seems to have provided no statement on the subject to the public, nor to have posted any statement on its Internet site:



    Today's story in The Wall Street Journal quotes from a memorandum reportedly distributed by the Mint to coin dealers, but it's not known if that statement is the same as the one extracted by Representative Larson.

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

    * * *

    STATEMENT BY U.S. MINT

    August 21, 2008

    FACT SHEET ON ONE-OUNCE GOLD BULLION COIN DEMAND
    MENTIONED IN THE WALL STREET JOURNAL TODAY

    The United States Mint does not sell bullion coin products directly to the public but to "authorized purchasers" who then sell these products to the public and price the bullion based on market factors. Authorized purchasers are required to meet high standards and must guarantee to maintain a two-way market for their customers to ensure the liquidity of these investment-grade coins.

    By law, the United States Mint must mint and issue gold bullion coins in quantities sufficient to meet public demand. Therefore, the sale of bullion products takes precedence over other "numismatic" products made by the United States Mint. Accordingly, obtaining bullion blanks from our vendors and producing bullion products to meet demand takes priority over other uses and product lines that may use the same metals.

    Because our vendors are not able to supply enough one-ounce gold bullion blanks to meet the unprecedented demand we are experiencing, the United States Mint notified our authorized purchasers on August 14, 2008, that we must temporarily suspend sales of the 2008 American Eagle One-Ounce Coin.

    However, one-half ounce, one-quarter ounce, and one-tenth ounce 22-Karat American Eagle Gold Bullion coins are still available to authorized purchasers and are in stock at the United States Mint. In addition, one-ounce American Buffalo 24-karat gold bullion coins are still available to authorized purchasers and are in stock at the United States Mint.

    The United States Mint is currently working diligently to build up our inventory and hope to resume sales of American Eagle Gold Bullion coins shortly.

    If you need any additional information, please call us and the United States Mint will be happy to help you."(snip)


    - question #1 - why is the US Mint having problems obtaining gold from which to mint needed 1oz American Eagle coins ? Isn't there supposed to be tons of gold in the government vaults at Fort Knox ?

    - question #2 - with the gold price having fallen over $200 from its recent high, a fall in price that is supposedly attributed to the actual SALE of gold in greater volumes than buyers are willing to absorb at the same price, where did all of this recently sold gold go ?

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    Veteran Member StuartL's Avatar
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    Default Re: weekend commentary - 'manipulation' of the gold market ???

    As you know, I keep a reasonably beady eye on the gold and silver markets. It has struck me for serveral weeks that with the recent news about increased inflation and the wild currency market swings, the prices of gold and silver should be rising fast.

    They have risen in anticipation of these events for some time, but now that the events are starting to show themselves, the prices fall. Makes no sense...

    At first I put it down to the recent 'better' news from the US. But that news can't be this good.

    Answer 1 - Maybe they have been selling it on the quiet. Who knows? The currency isn't pegged to gold in any meaningful way, so perhaps it has been sold. Or maybe it has been transferred to another state as part of a transaction or purchase. China? Saudi?

    Answer 2 - I can't for a moment believe that the price has dropped because THAT MUCH gold has been sold. I'd guess that there is massive short selling holding the price down as opposed to actual selling. Again, who knows?

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    Default Re: weekend commentary - 'manipulation' of the gold market ???

    ^^^ I would agree with your Answer 2 if 'naked' short selling was involved ... i.e. speculators selling 'paper gold' futures contracts that don't actually have one ounce of gold behind them. This would explain why the gold price is down, but at the same time there doesn't seem to be any REAL gold available for delivery. If the US Mint or other investors were to 'force' the issue i.e. actually start demanding deliveries of physical gold, this would potentially lead to an 'emperor has no clothes' scenario !

    Of course, there IS a bit of hard evidence as to where some of the 'paper gold' has actually come from - . And if this is true, we can probably expect the price of gold to start skyrocketing again in the near future as the short term leases approach expiry (say right after the November 7th US election ?).


    and if your Answer #1 is true, it confirms just how broke and desparate the US government is becoming !

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    Default Re: weekend commentary - 'manipulation' of the gold market ???

    Who can say eh?

    I would say though that the major markets are all - in my humble opinion - going through their once every 4 year ritual of completely ridiculous reactions. Whatever news there is, it seems to be interpreted as positive.

    But of course, I do not for a minute think that they are being manipulated. That wouldn't happen in a free market.

    I'm expecting all hell to break loose in the markets once the US election is out of the way. Suddenly the world will realise that mass bankruptcies and reposessions mean bad things...

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    Default Re: weekend commentary - 'manipulation' of the gold market ???

    ^^^ 100% agreement with your last statement. Especially the case when you consider that the dollar amount of Alt-A mortgages due to reset over the next 3 years vastly exceeds the amount of 'subprime' mortgages, when you consider that credit card defaults have just recently started to increase parabolically, when you consider that MASSIVE state and local gov't budget deficits are about to translate into equally massive tax increases plus layoffs of public sector employees etc.

    My crystal ball is whispering 'Swiss Franc' ( and gold by implication ).

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    Default Re: weekend commentary - 'manipulation' of the gold market ???

    speaking of which ...

    (snip)"Aug. 28 (Bloomberg) -- Rand Refinery Ltd., the world's largest gold refinery, ran out of South African Krugerrands after an ``unusually large'' order from a buyer in Switzerland.

    The order was for 5,000 ounces and it will take until Sept. 3 for inventories to be replenished, said Johan Botha, a spokesman for Rand Refinery in Germiston, east of Johannesburg. He declined to identify the buyer."(snip)

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    Default Re: weekend commentary - 'manipulation' of the gold market ???

    Melonie, I think you have more market background than I, but I think you're both right about the forecast. Stuart, I wonder how "immediate" the realization will be that this one might not be a "market correction" in magnitude.

    I too want little to do with currency, stocks or bonds, but I think there are tons of options for contrarian (sp?) investment and hedging. I'm not about to try to predict how close the R/E market is to bottom, but gotta believe there are some bargains out there. Don't throw things at me, but I'm even buying some 1st print / 1st pressing signed books.

    Bankruptcies, bank closures, foreclosures - commercial and residential, lots of empty retail and manufacturing space, huge reduction in property values. The "big 3" seemingly finally approaching "death by legacy costs. (a beautiful example of killing the goose that lays the golden eggs).

    I don't have a crystal ball, but I got an educated gut feeling that it's gonna get a lot worse before it gets better.

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    Default Re: weekend commentary - 'manipulation' of the gold market ???

    I happen to agree with your educated gut feeling. Arguably these 'irregularities', i.e. the official price of gold being driven down while at the same time supplies of gold are not available, are symptomatic of a situation where something BIG is going on behind the scenes.

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    Default Re: weekend commentary - 'manipulation' of the gold market ???

    Ima back from overseas

    Actually, of course, GATA's position is that quite a few insiders have testified to the gold price suppression scheme. Though Shedlock purports not to notice it, GATA has been publicizing their admissions for years. It would be decent of Shedlock and those who share his views to familiarize themselves with and respond to these admissions
    http://www.gata.org/node/6542
    Once again, the conservative, sandwich-heavy portfolio pays off for the hungry investor
    - Dr John Zoidberg

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    Default Re: weekend commentary - 'manipulation' of the gold market ???

    Quote Originally Posted by Melonie View Post
    symptomatic of a situation where something BIG is going on behind the scenes.
    Understatement of the year!!

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