for the second day in a row, the cabal forces went after silver, stopping its rally at the $18 level...

The dollar was taken back up for awhile, but then began to crater again. That was all gold needed for the buyers to step up to the plate and pick up new supply. Either that, or the spec shorts were covering. We have to be very close to a Commercial Signal Failure in which the pain is too much for those commercials tagging along with The Gold Cartel….

During this last $160 run higher in the gold price, I have emphasized how bullish this was, for the general investing public was on the sidelines and not paying attention … even those who have been reading this column for the past nine years … with gold rising every one of them. This lack of belief that the price of gold is going into the thousands is the main reason for the dismal performance of many of the junior/exploration stocks. Investment money is not going their way because the public is clueless, thanks in part to the clueless gold pundits … like the blind leading the blind….

This crummy sentiment issue is not one to be dismissed lightly, especially if you have a chunk of change in the junior/exploration sector. As gold has risen 50%, many of the share prices of these firms have dropped 50 to 80%. Something is seriously amiss here. Either this horrendous price action suggests a coming collapse in the price of gold, OR, the prices of these shares are in the most undervalued sector in the history of markets…

Long-time gold market analyst James Turk was recently on CNBC Europe discussing how and why the scramble by investors and Central Banks for taking possession of physical gold (vs. owning derivative forms of gold like ETFs and leveraged gold investment accounts offered by the likes of Kitco and Monex) is now driving the price higher.

A perfect example of this, Turk points out, is that the demand for ETFs like GLD has gone sideways for several months (measured by GLD's reported inventory of bars) while the price of gold has gone from under $900 to new all-time of $1050. He also mentions the tightness in the physical market. In that regard, I have mentioned that, although the tightness is not apparent at this point in time in the bullion coin market, we have several accountings of delivery problems, including my own, reported by investors on the Comex and the LBMA (London Bullion Market Association), the two largest gold and silver bullion bar markets.

Turk also explains why gold preserves the purchasing power of your wealth against the devaluation of the U.S. dollar and he discusses why an investor can avoid counterparty risk when they own gold outright [without using debt]. I would add that even keeping your cash in a bank exposes you to the counterparty risks of your bank being closed down AND the possible defaulting of the FDIC. The possibility of the latter would have been completely dismissed even a year ago. Anyone who thinks now that it's not a possibility is whistling in the dark….

Today saw great action again. The buyers are not pushing the market and the heat is gradually being turned up on the shorts. Those that think the commercials have to win and the market go down should contemplate that at this all time record high close EVERY short is under water and EVERY long is in profit. Who has the confidence and capital to push the down side? Furthermore with this being driven by the physical market the shorts need more than just confidence and capital…they need GOLD BULLION too! They don’t have it and their bluff is being called that will lead to a short squeeze of epic proportions….

there is plenty of blood in the water as far as currencies are concerned. The shark traders across the globe can smell this blood getting stronger everyday and have been thwarting the efforts of central banks suppressing their currencies and thus propping the Dollar. Obviously these traders know that if the Dollar is bleeding then THE way to play this is through the Gold market.

We have heard for months that foreigners want to move away from the Dollar. Last week Robert Fisk broke the immediately denied news that world economic powers gathered to mutiny the Dollar, the Dollar has moved down and Gold up over $50 since then. The point is, the markets have totally ignored the denials and for good reason. Over the weekend, the BBC news reported that China and Russia were cutting a $5+ billion energy deal NOT using Dollars but instead their own currencies! BBC also reported that these two countries wanted to do more deals together in future in their LOCAL currencies….

the paper markets for real assets will themselves not be believed. "Show me the Gold, Silver, beans, oil, and yes even the beef will not only become common but will engulf ALL markets with a "real" end product. I believe that options on futures for Treasuries or Dollar swaps or whatever will become useless.

As I have said before many times, when the music stops "you have what you have and that's all you have"….

CFTC BANK PARTICPATION REPORT REVEALS MORE CRIMINAL ACTIVITY

Bill,
The CFTC Bank Participation report was just released for the month of October covering September COMEX data. This shows the Cartel has been fighting this rise in the precious metals with everything but the kitchen sink.

In gold the count of US banks with a short gold position dropped from three to two. Two US banks (most likely HSBC & JPM) increased their net short position from 75,041 contracts to 116,780 contracts. That is a simply gob-smacking 56% increase in their short position in a single month. The increase is 41,739 contracts. This is 4.2 million ozs or twice what the entire inventory that ALL the dealers, not just two of them, purportedly hold in COMEX warehouses. It represents 71% of all the gold mined in the world during the month which clearly just two banks do not have access to. At the same time that two banks are behaving like mafia thugs by selling short gold in massive amounts to frighten out the longs there have been almost no deliveries out of the COMEX warehouse! This is brazen manipulation….the unfortunate news for these white collar criminals is that it hasn’t worked. They will have to cover these ridiculously fraudulent and manipulative positions at a large loss. To put icing on the cake these banks hold only 10 long contracts!! How could anyone make such a massive one way bet without knowing that the bet would win?

The banks have to be completely stupid and incompetent risk takers or be sure there was no way for them to lose. It is of course the latter because almost every time in the past when they have pulled this stunt they have won, including the spectacular example in 2008 which prompted the CFTC to investigate market manipulation; after one year the CFTC has not been able to publish a verdict!...meanwhile the pathological investor-molesters have re-offended! All the non US Banks, which number 17, hold 8,596 contracts long and 35,874 contracts short. So while this is also biased to the short side it is not a one way bet. What do the two US Banks know that the 17 non-US banks do not? My guess is they know what the FED or Treasury has told them, and that is that they should stop the rise in precious metals.

In silver two US banks (probably JPM and HSBC) increased their net short position from 29,875 contracts to 38,337 contracts. This also is an astonishing increase of 28% in a single month. This represents an increase in contracts sold short of 8,487 which translates to 42 Million ozs of silver. This is 75% of the entire silver inventory held by ALL commercials on the COMEX. It represents almost 100% of all the silver mined in the world during the month! Again the two US banks made a one bet with 35,874 contracts short and 38 contracts long!! Meanwhile 10 non-US Banks had 2,174 contracts long and 2,400 contracts short. Again there is a startling difference between what the two US Banks know and what the non-US banks know. To be able to be so sure of a market move that two banks can gamble almost all the entire gold and silver output of the world in the month or almost all the entire inventory of all the dealers on the COMEX they must be acting extremely recklessly or illegally. Knowing how well connected these banks are and how often they do this, and how often they win, it can only be the latter.

So far it looks like these banks didn’t anticipate many countries moving into the precious metals markets to acquire real bullion. Despite the CFTC standing back and watching this go on other market participants look like they are set to mete out the punishment these thugs deserve; a short squeeze of epic proportions!
Cheers
Adrian…

The senior gold/silver shares are on the move. Some of the smaller junior and exploration stocks are coming to love … while some remain moribund.

As stated here for some time now, I expect gold, silver and the shares to be THE GO TO investments on Planet Wall Street before too long. I can almost feel it now. We are so close. As the herd comes our way, the shares of the forgotten exploration sector are going to erupt. It is just too small a sector to handle the amount of buying coming our way. Funny thing is the buying is likely to come from the momentum crowd, hedge funds, etc. Many of the traditional gold investors, who have their heads buried in the sand at the moment, will miss the move after years and years of investing in that sector ... waiting to buy the dip.

As this Tipping Point event begins to kick in, the percentage in the quality exploration stocks will be explosive … partly due to shortcovering by the hedge funds, who are MASSIVELY short certain stocks, like an ECU Silver. It has been part of one of their theme trade plays over the past one to two years. They have been continuing to short various stocks playing for a gold/silver price correction, OR, a complete collapse in their ability to obtain any financing at less than ruinous prices.

What they did not count on, was a gold price which is going to go berserk, partly due to all the crummy analysis out there on Planet Wall Street. We are close to their UH-OH moment. Talk of $2,000 gold will soon be more prevalent than talk of gold retreating back to $1,000. This is when the real ACTION JACKSON scene begins.

There is a great deal of money on the table here.