Le Metropole Members,

Adrian Douglas has updated us his Goldman Sachs TOCOM
activity, which will be included in MIDAS, as usual. However,
this is potentially a momentus event, so I thought it fun
to get it out there to as many people, and as early, as possible....

GOLDMAN SACHS GOES NET LONG GOLD ON TOCOM

In the September 29 session on the TOCOM Goldman Sachs
COVERED 13 short contracts and bought 495 long contracts
to bring their long position to 2,525 contracts AND AS
A RESULT MAKING THEM NET LONG 28 CONTRACTS!!! The largest
net short position they held was 52,000 contracts in
March of 2006.

Below it is shown graphically. The declining net short
position has been going on for 30 months and I have
predicted for some time that GS would eventually be
net long just before the gold price explodes. Well here
we are! John Reade of UBS poked fun at me for this
analysis saying that GATA doesn't know what an arbitrage position is. Well, Mr. Reade I do know, and this sure
as hell isn't one! This chart documents perfectly the
demise of the gold Cartel. It should be noted that in
July Goldman Sachs advised its clients to sell gold as
they said gold was going to $740/oz. Their price prediction turned out to be accurate, however, they did not sell
gold from their own account during that time; they
covered their shorts with the aid of charitable donations
from the clients who followed their advice!

(CHART WILL BE IN MIDAS COMMENTARY TOMORROW)

Here is the estimated liquidated value of the GS
TOCOM gold position. I no longer have to extrapolate
this as their net short position has now been eliminated.
GS has lost approximately 185 MM$ on their TOCOM
position since I started tracking the data in January
2006. One has to wonder why a company as smart as GS
would tolerate being in an increasingly losing position
for so long. I think we know the answer. The suppression
of the gold price facilitated orders of magnitude
larger profits to be made in other markets.

Now that Goldman Sachs has finally come on to the GATA
side of the market we can expect a gold price explosion.
For a long time many in our camp wondered if the Cartel
was so smart they could continue their manipulation for
ever. We have seen in the last few weeks that some of
the key players have stepped on their own land mines.
The laws of economics can be frustrated but not repealed.

Cheers
Adrian