Rob McEwan Now Agrees With GATA's Bill Murphy: $5,000/oz. Gold is Coming!

The gold price wandered around its Tuesday morning opening price right up until the Comex open in New York yesterday morning. Then, about 8:50 a.m., someone either sold a pile of physical gold, pulled their bids... or put on a huge short position, as gold 'fell' eight bucks in minutes. That was its low of the day [$941.40 spot]. From there, an enthusiastic rally started that took the gold price up to its high of the day [$1,011.00] at precisely 2:00 p.m. in electronic trading in New York. Then, either the buyer withdrew, or a not-for-profit seller showed up. From there, gold was flat for the rest of the trading session.

Silver had quite a different day from gold. The Far East peak price was at the Hong Kong open, and from there the price declined to its low of the day at 11:00 a.m. in London... 6:00 a.m. in New York. From there, silver was on its way to a gain of over 50 cents on the day... plus it managed to close above $17 for the first time on this rally... and virtually on its high of the day.

The CFTC changed their open interest reporting method on their website yesterday... and it was a bust... so they had to withdraw the information completely. So I stole the numbers from Bill Murphy's commentary over at lemetropolecafe.com. Yesterday's small declines in gold and silver prices resulted in an open interest drop of 12,038 in gold to 461,154 contracts. Silver o.i. dropped 2,102 contracts to 120,902 total open interest. These are pretty big declines considering the price action, and I doubt that it was short covering. Hopefully the CFTC will have the kinks worked out of their data presentation tomorrow so I can check on the accuracy of these numbers. Without a doubt [unless there was big short covering] open interest numbers for yesterday's price rises in both metals, will show another big increase in o.i. when the numbers are released later this morning.

The Comex Delivery Report showed that 28 gold and 65 silver contracts were delivered yesterday. This report is also a 'new and improved' version from the CFTC, and I'm just hoping these numbers can be believed. Despite these new high prices for gold and silver, neither GLD or SLV showed any changes in their alleged holdings. I'm really starting to wonder what's going on over at these ETFs. However, at the Zürcher Kantonalbank in Switzerland they reported the changes to their gold and silver ETFs for the week ending September 11th. Another 10,000 ounces of gold was added to their gold ETF... and a whopping 588,295 ounces of silver were also added. That's a lot! There was a report from the U.S. Mint on Monday which I neglected to report yesterday... so here it is today. Another 17,000 gold eagles were minted, but nothing for silver eagles, which I find unusual. Over at the Comex-approved warehouses, they reported adding 586,101 ounces of silver to their inventories.

The usual New York commentator did not file a report until 2:00 a.m. New York time this morning, and he had a lot to say... "Tuesday's Indian ex-duty premiums: AM [19 cents] PM [89c], with world gold at $999.32 and $998.19. Below, and probably too narrowly above, legal import point. The rupee firmed slightly. The stock market rose 1.48% to close at a 15-month high. India not falling behind in this move in world gold suggests the biggest bullion importer in the world will block any material decline in the gold price. It is the worst possible news for the Bears."

"Local Vietnam gold early on Tuesday stood at a $4 discount to world gold of $999.40 [Monday $4.46/$1,002.40]... and the TOCOM continued to accumulate on Tuesday. Open interest rose 2.35 tonnes [754 Comex contracts] and the public added 1.8 tonnes to their long."

"This week's European Central Bank statement of condition reported a €56 million [2.62 tonne] decline in 'gold and gold receivables' said to be caused by the sale of gold by one captive Central Bank, net of the 'purchase of gold coin' by another. Last week, two CBs sold a total of 1.49 tonnes. This is the largest sale in some time--but still, of course, modest."

"Today, Comex gold broke out of a day-long sideways move to rise throughout the NY floor session. December gold closed up $5.20 at $1,006.30--and got as high as up $10.40 in the aftermarket. The gold shares were delighted: the HUI closed up 3.02% and the XAU up 2.43%... not far off their intraday highs."

"MarketVane's Bullish Consensus for silver, interestingly, despite the metal's spectacular performance lately, gained only 2 points to stand at only 69%. When gold spent 3 weeks in the 90s in Feb/March of last year, silver was in the upper 80s and the 90s. On this basis, general precious metals sentiment is still fairly cool."

A lot of gold-related stories. The first one is about Barrick Gold, and I promise that this will be the last one for a long time. It's a piece that Ted Butler wrote that I said I would stick in my commentary the moment it showed up on the Internet. It has, so here it is. It bears the title "The Dumbest Trade Ever?" Not only is the story worth your time, but the preamble written by GATA's secretary treasurer, Chris Powell, is a must read as well. All of this is contained in a GATA press release linked here.

The next story is the only non-gold story of the lot. I 'borrowed' this news item from Bill King's daily missive, and I know he won't mind. It's from the pages of The Telegraph in London... and is, as usual, by Ambrose Evans-Pritchard... their International Business Editor. It is definitely worth the read... and the headline states "US credit shrinks at Great Depression rate prompting fears of double-dip recession" and the link is here.

The next two stories come from perennial gold bears... always wanting to turn a silk purse into a sow's ear at the drop of a hat. Yesterday it was Jeff Christian of CPM group, and today the first gold bear, Martin Murenbeeld, spoke to the Denver Gold Forum yesterday. In his speech he said "Slowly but surely, gold is going back to its days where it was being held in a precautionary form by people worry about currency debasement, inflation, whatever you worry about," His speech was picked up by Reuters and the headline reads "Gold seen above $1,100 in 2010 on central bank buying". The link is here.

The next comment from the forces of darkness in the anti-gold camp comes from John Dizard over at the Financial Times in London. I wonder how seriously you should take his comments when they don't include anything about "central banks" and "China"... as he never mentions a word about either. The story is headlined "Is Time Being Called on Gold's Bull Run?"... and the link is here.

The next item is a most excellent piece by James Turk, which is posted at his website fgmr.com. In it, James talks about his favourite subject... gold. He makes some excellent points that fall into the must read category... and the chart is first rate as well. The link to his commentary is here.

The last piece on the gold price comes from mining entrepreneur, Rob McEwan. At the Denver gold conference this week, Rob stepped up to the mike and predicted $5,000/oz. gold... a number that GATA chairman Bill Murphy has been using for ten years now. The story is posted over at mineweb.com with the headline "$5,000/Oz. Gold? Rob McEwen Says It's Coming in 2014 or 2015". The link to the GATA release on this story is here.

And now for something completely different for which I thank my good friend Dave Delve.

The Jesusita Fire in Santa Barbara, California last week caused these two to
take shelter together. The fawn is 3 days old and the bobcat [that's a lynx to us Canucks! - Ed] about 3 weeks.

They rescued the fawn during last week's wildfire. Although wild animals, especially of separate species, are never placed together due
to regulations, in this emergency situation, they had no choice.
During the mayhem of the fire, they were forced to put the animals
anywhere they could, since they had run out of crates large enough for
the fawn. The kitten ran to the fawn, and it was instant bonding.

True bravery is always an act of love... of family and friends, of truth, duty, and honour. To stand and face the unknown requires that we care for something more than ourselves. There is no greater act than to move forward with our heart, while our mind tells us to flee. - Author Unknown

As I write my daily commentary into the wee hours of every morning, I'm always checking the precious metals prices; as what goes on in the Far East...especially the 1:00 a.m. to 3:00 a.m. N.Y. time slot when only Hong Kong is open... can be a harbinger of things of things to come later in the day. Needless to say, I was electrified by the price action starting from the moment that Sydney hung up the "Closed" sign on Wednesday afternoon [1:00 a.m. in New York]. From there, it has been onwards and ever upwards for both metals. Volume is heavy, so it's obvious that the New York bullion banks have got their nose in the market... not the Hong Kong players, as volume would otherwise be very light. It appears that something is afoot.

As was mentioned earlier, the shares put in another outstanding day yesterday... and I note in the latest edition of Casey's Gold and Resource Report issued yesterday, that the headline reads "How Will Niagara Falls Fit Through a Garden Hose?" That's a question that's about to be asked in earnest about the gold and silver share prices. I strongly urge you, dear reader, to invest the $39/year to subscribe. How can you lose at that price? If you wish to investigate further, the link to Casey's Gold and Resource Report is here.

London has been open for about an hour as I write this last paragraph, and I see that rally has cooled off a bit. However, it's my guess that it will be a very lively day for the precious metals when the Comex opens in a few hours from now, so hang onto your hats!

See you on Thursday morning.