On December 1 gold closed at $774.30, after a run higher the last half of November. A number of us in the GATA camp expected gold to really make a big move in December. While we know The Gold Cartel is capable of anything, the harsh takedown ($42 on Dec 1) was both unexpected and brutal.

But now, 4 weeks later, gold has rallied almost $100 from the Dec 1 close and is in position to do what many of us in the GATA camp thought it would do. The dollar has fallen from the 86 area to the 80 area, which has been supportive. However, one of the reasons we felt would give gold impetus to go much higher was the gradual tightening of the physical markets, with Comex gold (CBT too) the cheapest way for substantial buyers to accumulate it in any kind of size. A number of the gold commentators, like myself, urged buyers to take delivery of the December gold contract.

Thus far, there has been nothing to write home about in the delivery regard, but this late buying strongly suggests that gold is going into play, meaning some BIG PLAYER(S), have decided now is the time to make their move and do some serious accumulation, both in the physical and paper markets. It is going to be fascinating to see how the Dec contract goes off the board on Wednesday and if there are any delivery issues (the shorts have until December 31 to make delivery). IF a sizeable amount of Comex gold is taken away from the amount available to the public, it would likely be viewed as very price constructive. Perhaps it is the Feb contract which will attract some firework's action.

The move on late Friday was no fluke. It was deliberate in that the buying was designed to take gold through key technical price points, which would trigger off numerous stops. This is just what happened, with few traders around to contest the surge. In doing so, it has turned more of the pundits bullish BECAUSE of the technical action and the new chart configuration. Somebody trying to accumulate gold in size at low prices would not make a move unless they ALREADY had a substantial amount accumulated and are now ready to use extra ammo to drive up the price and attract the specs, which have presently abdicated their standard role in this market.

This will be fascinating, as the setup for gold to make a beeline for $1,000 is in place.

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My smeller tells me the biggest money in the world is accumulating, or looking to accumulate, gold in a major league way.

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What is becoming clear is that thus far the heralded US bailout is a Wall Street one, not for the "the banks" in the US. There have only been 18 bankruptcies todate. The biggest money in the US (our government) is only bailing out our country's biggest banks … and wouldn’t you know a number of them are part of the Gold Cartel, or have been allies. Citigroup, JP Morgan (Chase, now a part of Morgan), and Goldman Sachs were all part of the gold price suppression scheme and sued by GATA’s Reg Howe in 2001. Bear Stearns and Lehman Brothers were allies in that scheme.

It is very likely that giving hundreds of billions to these firms, the ones that took America down the financial drain, is likely to become a bigger scandal than the $50 billion Madoff ponzi scheme. After all, they have been given hundreds of billions of US taxpayers money without any accountability of what they are doing with the funds … just as no one knew what Madoff was doing with his funds.

The incestuous nature of it all is truly outrageous. To begin with it was the Treasury’s own Hank Paulson who, as CEO of Goldman Sachs, urged Congress to allow investment banks, like his own Goldman Sachs, to be allowed to use 40 to 1 leverage on its capital. Years later this was approved by Congress. And yes, give us another motive for The Gold Cartel to suppress the price of gold. Should US reserves be compromised, meaning gone in that they have been lent/swapped out, as GATA suspects, and were used partly to facilitate the big banks getting US taxpayer money bailouts, it could become the scandal of all scandals. The world believes the US has 8100+ tonnes of gold to back our currency. What if the world learns we only have half of that, or less? What would that do to the dollar in short order?

The entire Gold Cartel mess, and surrounding profoundly disturbing issues, could extend further into today’s market machinations and bailouts than even many in our GATA camp realize.

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He goes on with some more comments but its long. What is good for gold is good for silver. Silver is almost $11 as I write this. I will be very interested to see how the next few days pan out.