Gigem77

Metals Manipulation - Or Simply Deleveraging?

It's a gutsy call to say buy gold today. Hurricanes in the gulf don't help oil. The dollar is rocketing higher. Money is flooding out of commodity funds as redemptions hit. Financials are attracting the speculative money. Mining shares were sold today on heavy volume. Many hit new 52 -wk lows and ended on those lows.

Dichotomy in W. European Gold and Silver Prices

Los Pepes, let me suggest another possibility. Dealers were buying silver at 17.50 at the end of July. Then the price cratered very quickly. Nobody with inventory wants to sell it for 13 bucks. So they are waiting for a bounce. The large dealers will find sources of supply and begin selling again. Tulving, Apmex, and others are selling again today. The smaller local guys have to buy at these new lows before they will sell again.

Dichotomy in W. European Gold and Silver Prices

The gold and silver markets are made by large dealers in 100 ounce bars (gold) and 1000 ounce bars (silver). The bars have to meet standards for weight and purity. A comex contract for gold is 100 ounces. For silver it's 5000 ounces. There is no shortage in these markets. Anyone can buy a contract and take delivery.

The retail market for things like eagles or krugerrand depends on fabricators taking delivery of bullion and then turning it into the k-rands or eagles or bars. A shortage at the local coin store or on ebay is not the same thing as a shortage at the comex. It just means that the retail demand has temporarily outstripped the ability of the fabricators and they have a business opportunity to ramp up their operations.

EBAY by itself is not evidence of anything. EBAY USA has plenty of gold and silver at high prices.

The comex has over 8 million ounces of gold and 138 million ounces of silver on the books as of yesterday.

When you can verify that the comex refuses to deliver gold or silver against a contract, then you have a shortage.

Interest Rates and the Mineral Bubble: The Hidden Parameter

The fed has been decreasing interest rates for some time. So your first premise is wrong. Bernanke has cut rates 3 full percentage points. Commodities have risen in price throughout the period of those cuts. But Greenspan raised rates 14 times between 2004 and 2006 and commodities rose in price during that time frame also. Go back and do your research again.

Name a miner that is "hoarding reserves". Copper is nearing $4.00 per pound and every miner with a pick and shovel is digging as fast and as hard as they can. High prices are a strong motivation to over produce, not hoard.

Crude oil prices soared because demand grew to nearly equal production. Chinese consumption of oil is growing 7.5% per year. The lack of spare production capacity is the key to understanding higher prices.