It doesn't take much to understand why one should be positioned given the explosive situation at hand...especailly in JPMs that have "the goods" AND are in production.

Jim Sinclair’s Commentary:

"The real story is a 30 year consolidation in junior and intermediate gold shares which is about to break out to the upside.

Think seriously about what a 30 year consolidation formation means.

Finding Gold in the Mainstream
By Frank Holmes, CEO and chief investment officer, U.S. Global Investors

The New York Times dedicated a chunk of last Sunday’s paper to gold as a mainstream investment. In other words, gold is now legit — no longer can it be dismissed as the asset of choice for fringe types with a cellar full of canned goods and a stash of bullion buried in the backyard.

And to illustrate just how far gold has moved into the American mainstream, the paper goes bipartisan by holding up investor George Soros on the left and commentator Glenn Beck on the right as examples of the newly converted.

…The setup in the gold stocks looks solid. When the time is right, and the window has begun to open, they will take out their 30-year consolidation pattern with conviction. The setup in the gold stocks looks solid. When the time is right, and the window has begun to open, they will take out their 30-year consolidation pattern with convictionIt is my feeling that gold is headed on this move to $1650 with its normal drama.

Let’s think about what this means to gold producers.

With gold valued at $1650 per ounce:

- 500,000 ounces = $825,000,000 less the cost of mining.
- 1,000,000 ounces = 1,650,000,000 less the cost of mining.
- 2,000,000 ounces = 3,300,000,000 less the cost of mining.

Costs:

- Underground average costs are approximately $500-$600 (assuming no derivatives or derivatives covered as international and Canadian GAAP requires derivative losses be expensed to the specific property).
- Open cut average costs are approximately $300 (again, assuming no derivatives or derivatives covered).
- On surface average costs are approximately $22-$75 (again, assuming no derivatives or derivatives covered).

From Adrian at Midas: “…The physical squeeze is just getting started. The sentiment suggests most traders and investors are asleep at the wheel. That is incredibly bullish.
Cheers
Adrian”

From Stewart Thompson at Goldseek via Big Pic:

Gold blasted off leaving a crowd of top callers and gold worriers behind… some big name gold stocks are making new 52 week highs, and this is the beginning of what I call, “the great gold confirmation”.

…My argument has been that this is the greatest financial crisis in modern history, and the fact the gold stocks are almost at a new high while the Dow languishes, is a major positive, not a negative, for gold stocks. You can’t expect stocks to recover from a 90% loss in a year just because gold went to a new high…The GDXJ represents the gold juniors. This is a chart poised to rise to the Fibonacci 161% retracement line around $36, and that is fits with a possible target from the zone of consolidation that has built over the existence of the GDXJ itself… the gold bears will have their financial backs snapped in half, by the bulls.

Silver is perhaps the most explosive entity in the gold community right now, and I’m going to make one of my rare market calls. …Silver Rocket update for Jun 18…silver has yet to make a new high. Again, the bears see this as a non-confirmation. Again I say, wrong. Quantitative Easing is accelerating and George Soros is pounding the table that the crisis is just getting underway. Just starting. Not ending… silver has a bull head and shoulders continuation on the 1 and 2 year charts, and the kitco charts show it better than most…I believe the silver price will become so volatile that it becomes virtually untradeable to those with no core position…I think the risk/reward is skewed massively towards reward, as is the timing… Kitco Silver Chart This chart tells you all you need to know about what is coming to the metals bears… Obliteration. They already look like clowns telling the gold community that paper money is less risky than gold and silver. That statement alone, which is arguably the single stupidest statement in the history of markets, illustrates the horrific understanding of risk and reward that these people have, and their obsession with making you live your market life by the exception, not rule. The massive bull continuation pattern on silver bullion has a target of around $30-33, and gold could easily leap to $1700 while that occurs.

How many people took my “gamblers take action now” call when gold broke rose up from 980? They are MORBID now. Stunned. Worse, they are now in “audience mode” as the banksters unveil their next leg of their attack, on paper money itself as an ENTITY.

Thanks to GWR: Ed Steer this morning

posted on Jun 19, 10 10:53AM Use the IP Check tool [?]

Russia's Central Bank Purchases 1.1 Million Ounces of Gold in May

… this past week's HUI graph. It was an impressive week... and the gap openings on Thursday and Friday stand out like sore thumbs.

… a graph...of the 1979/80 gold 'bubble' compared to how our current 'gold bubble' is doing. .. our current 'bubble' is laughable by comparison... it's hardly even started…and is similar for silver.

Thanks to BasserDan: “Silver: Is A Physical Squeeze Starting To Bubble Up?... there is 239 million ounces of silver that has been shorted for July vs. the 52 million available for delivery. See the problem? Historically JPM could count on the longs to sell their position before first notice of delivery day or tender for cash. If the Comex silver longs start correlating with the trend in the actual physical market, the Comex will default on silver deliveries... a bullion trader here in Denver is having a hard time sourcing any kind of real supply of silver bullion on the "bid side" of the market, which means he's having a hard time finding retail sellers in any kind of size AND his buyers want silver right now… GATA has maintained for over 11 years that eventually the physical market demand would completely overwhelm the ability of the paper short interest to satisfy delivery demands. I would argue that the market is starting to transition into that process and it will lead to much higher prices. In fact, I believe all but the most knowledgeable gold investors will be stunned by coming price movements. What will be even more shocking to many is the premium over spot that the market will pay for deliverable physical bullion.

Posted by Dave in Denver at 7:37 AM
http://truthingold.blogspot.com/2010/06/silver-is-physical-squeeze-starting-to.html