You are witnessing the most egregious and constant manipulation of any market in history. That is the bad news. The good news is we are getting SO close to the point when the hideous gold price suppression scheme blows up.

This morning was vintage cabal activity. Demand for physical gold was so strong the PM Fix came in at $762. As soon as the cash market pricing concluded for the day, The Gold Cartel derivatives traders went into action, immediately dropping gold $17, taking it below their $750 line of defense. Of course, as usual, the cabal sycophants in the mainstream gold world will maintain their silence as the gold rape continues to manifest day after day.

This morning The World Gold Council released their recent demand numbers and they were staggering. Staggering demand numbers normally equate to bull markets, but WE are undergoing a severe bear market.

The call referred to the to be released gold demand numbers, which cannot be accounted for other than clandestine central bank gold selling. The sell side is certainly is not flowing from the miners and the European central banks have virtually stopped selling.

Naturally, the WGC twits were not going to refer to any untoward price suppression selling, but instead to "institutional" selling. But, this doesn’t comport and only those with an open mind realize what the real story is. I have included today’s MarketWatch article with my comments at the end…

"Institution investment saw a net outflow of nearly 300 tons in the third quarter, according to the WGC, which more than offset the inflows in the retail sector."

So let’s see, we are undergoing the greatest financial crisis since The Great Depression … a crisis which has the retail, small investor buying gold like never before in history … with every kind of investor (large and small) pouring money in the Gold ETF’s, but mysterious institutions are selling their gold, to the tune of a staggering 300TONS!

Talk about a disingenuous presentation by the most worthless industry organization in history. Sure, there was some hedge fund liquidation, but the institution doing most of that amount in size was THE UNITED STATES GOVERNMENT, and perhaps the IMF. The main institutions selling were The Gold Cartel. The World Gold Council can’t explain why the price is going DOWN with demand SOARING, so they blame it on institutional selling in the over the counter market. How convenient!

This sort of drivel emanating from the WGC twits is nauseating. At least they are pitifully consistent.

Adrian has the significance of this WGC report nailed (for the market and GATA)…

Bill,
I have read some of the newswires reporting on the World Gold Council Q3 demand report but NONE of them come close to conveying the screaming bullishness of the WGC report itself. IT IS A MUST READ.

http://www.mediacentre.gold.org/medi...

Here are some key points from the report

• Dollar demand for gold reached an all time quarterly record of US$32bn in the third quarter of 2008
• This figure was 45% higher than the previous record in Q2 2008.Tonnage demand was also 18% higher than a year earlier.
• Identifiable investment demand, which incorporates demand for gold through exchange traded funds (ETFs) and bars and coins, was the biggest contributor to overall demand during the quarter, up to US$10.7bn (382 tonnes), double year earlier levels
• retail investment demand rose 121% to 232 tonnes in Q3
• Gold ETFs enjoyed a record quarterly inflow of 150 tonnes in Q3. Net inflows surged by an unprecedented 111 tonnes during 5 consecutive trading days, equivalent to US$7bn.
• Q3 saw a record US$18bn of consumer demand for gold jewellery with buyers returning to the market on lower price points, around and below US$800, demonstrating the underlying positive sentiment towards gold and its recognition as a store of value.
• Despite a deteriorating global and domestic economic climate, demand in India, the largest market for gold demand, recovered during the third quarter, encouraged by lower gold prices, a good monsoon and the onset of the festive season. At 250 tonnes, total consumer demand was 31% higher than Q3 2007 levels. In value terms, demand hit the record quarterly sum of US$5bn.
• Demand in Greater China rose 18% to 109 tonnes, with the majority of this increase attributable to a strong rise in demand in mainland China (+16 tonnes).
• Jewellery demand in the Middle East, which accounts for more than 90% of total consumer offtake in the region, rebounded in Q3 with tonnage demand up 15% on Q3 2007 and up 47% in dollar terms, hitting a new record of US$2.8bn. Retail investment demand, while relatively small in size at 7 tonnes, recorded strong growth of 23%, and 57% in dollar terms. In Turkey total Q3 offtake, at 99 tonnes, was up 15% on the levels of a year earlier, with investment demand smashing all previous records to reach 31.7 tonnes.
• Gold supply was down 9.7% on year-earlier levels, largely driven by a significant reduction in central bank sales. Sales under the Central Bank Gold Agreement (CBGA) totalled a provisional 357 tonnes in the CBGA year ending September 26, the lowest annual figure since the first Agreement was signed in 1999.

The word "Record" was used 11 times in a one page press release! But the most interesting of all is this:

QUOTE

As the financial crisis deepened these increases in identifiable investment demand were offset by outflows in "inferred investment". This was characterized by hedge funds liquidating investment positions in gold as they were forced to raise cash and by institutions liquidating commodity index investments, including gold, as fears of recession deepened. The trend largely reflects gold’s better performance relative to other assets and also explains why the gold price did not perform better during the quarter in the face of very strong demand.

END

Notice the categorization of "inferred investment". The physical gold market was ON FIRE breaking all records while the paper market of futures contracts (inferred investments) was being sold off. As we know this was instigated by 1 or 2 US banks selling short 10% of annual gold production and 25% of annual silver production in 4 short weeks during July.

When you see the massive record breaking physical demand one has to wonder where the banks might source such supply if they had to deliver on the contracts and WHY would anyone sell such a massive amount of "inferred investment" with the physical market on fire. This is ABSOLUTE VINDICATION of GATA’s WORK. The only viable reason was this was intended to cool off the physical market. It obviously failed. On the contrary it probably stimulated the physical market as real money was being sold at a discount.

The most important point about this report is that the huge record breaking physical demand has to be met with real record breaking supply…but mine supply has declined 9.7% and Central Bank sales that have been reported are declining. This would imply that gold sales or loans that are not being reported are having to fill the growing gap between demand and supply. Such a supply squeeze is totally consistent with the Mints limiting supply, coin melt bars from Fort Knox showing up on the market, and gold supply being rationed to India with pathetic excuses of credit risk exposure and the unprecedented massive covering of the traditional shorts on the TOCOM who are going neutral to net long!

The sell off on COMEX is liquidation of demand for gold that doesn’t exist. This has helped the Cartel but it has NOT SOLVED THEIR PROBLEM OF LACK OF SUPPLY. There are still 250,000 gold futures contracts outstanding that are above and beyond the ability of the COMEX to deliver. A percentage of these contracts will stand for delivery. Perhaps it will be a large percentage, who knows? but we will soon find out. A percentage of this "inferred investment" can shortly become REAL DEMAND for PHYSICAL METAL. You can see from this report that the record demand has strained the system to the limit and created unprecedented shortages. The system can not deliver on even 10% of the Open Interest currently outstanding on COMEX. The stage is set for a coming massive short squeeze.
Cheers
Adrian

Who in their right mind wouldn’t want to own more gold in this financial environment, must less sell it? The Saudis have been reported buyers and there is increasing smoke about the Chinese doing the same….

China Mulls Raising Gold Reserve By 4,000 Tons: Report

From Dow Jones Newswires
via FXStreet.com
Wednesday, November 19, 2008

BEIJING -- China's central bank is considering raising its gold reserve by 4,000 metric tons from 600 tons to diversify risks brought by the country's huge foreign exchange reserves, the Guangzhou Daily reported, citing unnamed industry people in Hong Kong.

The newspaper didn't elaborate on the plan.

China's forex reserves, at $1.9056 trillion at the end of September, are the world's largest. U.S. dollar-denominated assets, including U.S. treasury bonds and mortgage agency bonds, account for a big proportion of the forex reserves.

http://www.fxstreet.com/news/forex-n...
article.aspx?StoryId=82afe43d-8d3c-
494d-894d-113c196ed750

-END-

As mentioned in previous MIDAS commentary, GATA had a conference call with the Chinese in April. We were to have another a couple of weeks ago when they went SILENT. Perhaps that is the best news we could have not received. Two articles in two weeks about official sector Chinese buying is most encouraging. As we suggested, what could make more sense when you have $500 billion worth of dollar reserves and the US is throwing the money kitchen and sink at our financial/economic system to keep it afloat.

Our STALKER source called with potentially significant input. One of his clients took delivery of a silver contract, one in which he had to wait TWO WEEKS to receive. Once in hand the client was stunned about the poor quality of the silver bars. They were "all beat up, "dented." He offered to pay a premium to get better quality bars, but received no positive response. Perhaps this is another indication that the silver price managers are scraping the bottom of their barrel.

One more reason for gold and silver to get bombed off their highs: tomorrow is a gold/silver option expiry. The criminals, Gold Cartel and others, who work the Comex almost always ORCHESTRATE a precious metals price dump right before and on the expiries. It is illegal if American anti-trust law means anything, but the CFTC could care less, as they are part of the problem, which is WHY they were included in the Presidents Working Group on Financial Markets.

Comex inventories…

Bill,
On Tuesday withdraws of gold and silver from the COMEX continued with 6,903 ounces of gold removed and 314,095 ounces of silver removed. Total gold stocks now down to 8,108,978 ounces. Total silver stocks now down to 128,720,340 ounces. To show how woefully inadequate these amounts are to supply any return to gold and silver money, I checked previous U.S. coin mintage records. In 1904, the mint turned out 11,390,972 double eagles, 270,988 eagles, and 489,136 half eagles for a one year mintage of 11,270,163 ounces of gold. Similarly, in 1921 the mint produced 68,656,778 ounces worth of silver coin. These rates of production would wipe out COMEX supplies in less than one year for gold and two years for silver. In the first 10 plus months of 2008, the U.S. Mint has produced 648,500 ounces of gold eagle coin and 16,875,000 ounces of silver eagle coin. The fact that mint was able to produce gold coins in 1904 with antiquated equipment at 15 times the current rate is proof that the mint is currently either incompetent or that there is a shortage of gold.
Regards,
Bryant

Max Keiser on gold and the Comex…

http://www.youtube.com/watch?v=BMzEh...

***

Demand for gold is surging all over the world…

Russia's Sberbank sees precious metals sales surge

Wed Nov 19, 2008 11:30am EST

MOSCOW, Nov 19 (Reuters) - State-controlled Russian banking major Sberbank (SBER03.MM: Quote, Profile, Research, Stock Buzz) said on Wednesday sales of precious metals have surged this year as its clients seek safe investments in the face of turbulent financial markets. Sberbank, Russia's largest lender, said its clients had bought around 6 tonnes of silver ingots in the first 10 months of the year -- three times as much as during the whole of 2007.

Gold purchases for the period totalled 10 tonnes, or 1-1/2 times as much as during the whole of last year. "In the conditions of instability in global financial markets, Sberbank's clients are more actively buying precious metals with the aim of saving, and also with the expectation of making a profit due to the rise in (metal) prices," the bank said in a statement.

"The most conservative investors prefer to keep their money in precious metal ingots."

For many Russians the memories of the 1998 financial crisis -- which featured bank collapses and a plunge in the value of the rouble -- are still very fresh.

From staunch GATA supporter Eric LeMaire of www.24hgold.com…

Dear Bill,
A great number of us gold watchers have been trying to find a way to apprehend the real price of gold, the one which us peons need to pay when we want to get our hands on the real thing.

The only worldwide non Comex public pricing system is Ebay, so I have been working on the subject for quite a while to find a way to extract the price of gold out of Ebay.

Thus I have the honour to present you today my two new pages :

Gold on Ebay, US and Worldwide

Silver on Ebay, US and Worldwide

Here is how they work :

- gold and silver coins with offers on ebay appear on the page, listed by country

- for each coin, you will find :

o its name, fine weight and instant metal value,

o the price of the last sales on ebay to track the price : average price, premium over spot price of Gold (or silver), the implied gold of silver value per ounce, and yesterday’s average price for this specific coin

o The current offers on Ebay in the US and Worldwide with the respective number of offers. You can click on the Ebay buttons to get directly to the Ebay page with all the coins for sale,

o Various Ebay tools relevant to this coin : buy it now, newly listed, ending soonest and completed listings.

There is also a search tool to start Ebay directly if you are looking for something else.

Since Ebay’s are different for each country, we have Ebay pages for Canada, USA, Australia, France and the United Kingdom

Just to give you an example on how this works : at this precise minute, for the American Eagle one ounce coin : (click here)

- Metal value at spot price : 733.84 US dollars

- Average price of the last sales on Ebay today : 950.87 dollars

- Premium over spot : 29.60 %

- Theoretical gold price per ounce : 950.87 dollars

- There are at the time I write this message 161 offers on Ebay US for this coin, and 188 in the world, which you can find by going on the other pages by Ebay (of course these numbers change all the time). :

I hope this tool will be useful to anyone who is interested in Gold and Silver, and will help people get more physical in their hands which is the key to blow off the Cartel.

I would be most thankful for ideas on how to improve these pages or new tools that would be helpful.

Anyone who would be interested can contact me at : editor@24hgold.com

With my very best regards, and, as always,

Gata be in it to win it !
Eric

More on China/gold…

Hi again, Bill
this is from a Reuters article, Nice graph of the gold demand from China since 2000. hope you can reproduce it for the Cafe.