Yeah if you don't hold it you don't own it.
http://rs6.net/tn.jsp?e=001U8KvBethN...WHUZeePScUHdM=
Some much imfo out their these days with the internet(word will spend quick if the big US shorters default) ,IMHO PGM's will go through the roof there's just going be to much demand esp. silver to hold the price down for much longer.
Gold Producers May Exploit Share Rally to Boost Cash Reserves
Gold Producers May Exploit Share Rally to Boost Cash Reserves
Jan. 23 (Bloomberg) -- Gold producers are likely to follow the lead of Kinross Gold Corp. and take advantage of their rising shares by selling new stock to bolster cash reserves as the global economy slows, investors say.
"Whoever can raise equity capital, even if it's expensive, is going to do it," Tom Winmill, manager of the $75 million Midas Fund, said in a telephone interview from New York.
Gold prices had their eighth straight annual gain last year as fears the economy would melt down fanned investors' demand for bullion as a safe-haven investment. While debt markets remain frozen, Kinross, Yamana Gold Corp. and Agnico-Eagle Mines Ltd., all based in Toronto, have announced plans to raise as much as $810.6 million since November to replenish capital reserves.
Kinross, Canada's third-largest gold producer, said Jan. 21 it would raise as much as $414.6 million to shore up its balance sheet. That followed share sales late last year that generated about $110 million for Yamana and about $286 million for Agnico.
The 16-member Philadelphia Stock Exchange Gold & Silver Index, a measure of the world's largest bullion producers, has jumped 61 percent in the past three months. In that period, the benchmark Dow Jones Industrial Average declined 4.7 percent, while the Standard & Poor's 500 Index fell 7.7 percent.
"There's an opportunity for gold companies in particular to raise capital," Bill Hunter, managing director of Jefferies Group Inc.'s mining investment-banking unit, said in an interview. Gold "has unique qualities -- its store-of-value properties have real appeal to money managers."
Economic Slowdown
U.S. builders broke ground on the fewest houses in December since record-keeping began in 1959, unemployment is rising and concerns remain about the solvency of some of the world's largest banks. Gold producers, meanwhile, are enjoying a period of stable metal prices and falling costs as prices tumble for crude oil, steel and chemicals used to process ore.
Gold futures for February delivery climbed $8.70, or 1 percent, to $858.80 an ounce yesterday on the New York Mercantile Exchange's Comex division. Gold rose 5.5 percent last year as the S&P index fell 38 percent.
"Everybody wants to buy gold, and these have been very healthily subscribed issues," Michael Pento, who helps oversee $1.5 billion at Delta Global Advisors in Holmdel, New Jersey, said in an interview. "If you're a bank, you have to go to the government for funding; if you're a gold company, you have no trouble raising cash."
From New Zealand's own Ed Wener at Le Metropole Cafe
The Ongoing Manipulation of the Gold Shares
Gold today is very slightly below the price it was last year on Jan 26/08 when it closed at $910. The Gold shares, you would assume, would be trading higher benefiting from a 50% drop in the Oil price over the year given that fuel is a major cost. However the HUI is struggling to stay above the 300 level compared to 461.58 a year ago. There were comments at the time about how poorly the Gold shares were trading. They were not exhibiting their usual leverage to the then new record high bullion price. This, it was said, was due to the Oil price which was rising faster than Gold.
So here we are a year later the Gold shares are trading at a 34% loss. The juniors are down double that if not more. The Dow was 12,400 a year ago. Today it is just above 8100, a 35% loss. The HUI is tracking the DOW rather than the Gold price. Understanding the Purpose of the Manipulation
The Gold shares are exhibiting negative leverage even though input costs are much lower. Why is this? The answer is easy. The Gold cartel does not want to give us a way out. As Greenspan said "In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold."
Dan Norcini writes a daily wrap-up of the Gold market for Jim Sinclair at http://www.jsmineset.com
Today he said this about the Gold shares (my underline):
“Both of the mining indices, the HUI and the XAU faded well off their highs after punching through horizontal resistance near the December highs and triggering buy stops in the process. A close above those levels would generate buy signals on many of the technical charts particularly the old Point and Figure style charts that were once widely used by longer-term oriented investors. I sometimes wonder if anyone even uses those things anymore since they were primarily trend identifying charts and today’s crowd of money throwers are momentum oriented. I must say that I do not like what I see taking place in these indices today as it shows a potential short term buying exhaustion pattern. Tomorrow’s session will be important in determining what we get in there.”
In other words Dan the Trader is becoming cautious because the Gold shares are not confirming bullion’s advance. Once again a breakout has been thwarted. Dan also commented on trading Gold on the COMEX
“You cannot hope to beat opponents who never have to meet a margin call nor have trading practices put in place that would force them to liquidate losing positions to prevent major losses as most responsible commercial firms currently have in place.”
Gold bullion is the safest place to store one’s wealth. By buying Gold one exits the System. The Gold cartel, to protect their money printing monopoly, cannot allow this to become common knowledge. So today, to prevent too much excitement building in the Gold market after Friday’s dramatic rally they attacked the shares which initially shot higher. At noon with Gold still up almost $14 or 1.5% the Gold shares had already given up most of their 5% gain. So we saw Agnico Eagle give up a 5.3% gain and lose 2.4% on the day. Newmont was up 2.2% and ended down 2.4%. Kinross was up 4.6% and lost 3.5%. Goldcorp was up 5.1% and lost 1.2%. This drained any enthusiasm out of Gold which ended $15 off its high of the day.
The Cumulative Effect and Unintended Consequences
I first noticed these patterns about six years ago. Norcini says that “today’s crowd of money throwers are momentum oriented”. Not so in the Gold market where breakouts are sold and the shares always seem to know when Gold is going to be hit. This counter intuitive action must be a very profitable trade for those who have advance knowledge. It is certainly discouraging for those who buy the breakouts. This manipulation has made the Gold shares too volatile for the average investor. Many have left the sector for good.
Last September I wrote an article about Bob Moriarty which included the chart below. I wrote this at the time:
“This chart plots the ratio of the XAU Gold Index and the Gold Price. The chart is divided into high and low zones and is useful for those who like to switch back and forth between holding Gold or Gold Shares. So when the ratio is very high you sell shares and buy bullion and vice versa."
Moriarty presented this chart to show his readers how cheap the shares are. He points to the low of .1561 which was hit on Sept 5th 2008 and correctly states that it is a new record going back 25 years.
Attachment 1219
“However Moriarty misses the most important information I see in this chart. Take a look at the period 1993 to 1998 and compare that to the current bull market 2001 to present. Notice the blue line showing the 25 year average. Why is it that the Gold shares, except for three brief periods, have been below the 25 year average during Gold’s best years? Earlier this year Gold hit its highest price ever yet the ratio could not even get into the Average Zone.”
In other words, the cumulative effect of the manipulation of the Gold shares has been a lower and falling XAU/GOLD ratio. There are two important consequences that I’m sure were unintended. The first is that it makes no sense to take the extra risk that the shares entail. Those who avoided the miners and instead sold their shares to buy bullion saw their Gold portfolios rise 5% last year compared to the 30-50% loss the shares made. So the manipulators, by hitting the shares, unintentionally increased demand for bullion. Secondly, the lack of capital in the Gold mining sector has postponed the development of new mines, unintentionally decreasing the amount of Gold that will be mined in the coming years.
Well a lot has happened since Moriarty created that chart In September. For one thing the 25 year low of .1561 was smashed in October when the ratio hit a new record low of .0866. The Gold shares were trading at just over half their previous all time low. Since then both the XAU and HUI have doubled but the ratio (today at .1378) is still well below the low of .1561 that Moriarty highlighted.
I’ve brought the Moriarty chart up to date:
Attachment 1220
Ending the Gold Manipulation
The manipulations of Gold and the Gold shares are linked. We understand why Gold is controlled. It must be to maintain the fiat monetary system. Why the shares are manipulated is less clear. It may have started to discourage investors in the sector or it may have been simply motivated by a quick profit based on inside information ahead of a an official sale of bullion. Stealing candy from babies is hard work compared to what these guys are doing. The result is that the Gold shares are trading at half where they ought to be given the current bull market.
All manipulations eventually end and these will be no different. It all depends on the availability of Official sector Gold. When that flow stops the Gold price will quickly rise and most likely overshoot to the upside. The shares would first have to double to where they should be today and from there the increases could be quite spectacular as all those momentum traders Norcini mentioned join the Gold Rush. Imagine Gold at $2000/oz and Kinross or Goldcorp or Newmont with $2 Billion or $3 Billion or $5 Billion in extra profits.
Cheers from Auckland, Ed Wener ed.na@xtra.co.nz