Gold climbed $22 overnight, breaking back above the $1400 level as traders moved out of the Euro & USD and into metals and commodity currencies. Gold struck all time highs in the British pound while silver made a close above $30.00 on the COMEX. John Embry of Sprott Asset Management had predicted last week that gold and silver prices “could go ballistic by year-end” – its looking like the rest of the week could could be exciting despite the holiday low volumes. Richard Russell takes a step back from the intraday noise with some valuable commentary over at the king world news blog:

“I've been around a long time, and I've studied many primary bull markets. And now I want to venture a few of my observations.

In markets, I have never seen a series like the above end with a whimper or a fizzle. The end or the wind-up of such a series usually arrives with an upside "explosion," as those who have failed to participate in the series finally rush in to join in the apparent endless advance. This is the wild and wooly speculative phase of a great bull market. Big bull markets don't end with a sigh, they end in exhaustion.

(1) Most great primary bull markets last longer and carry farther than the majority of investors (even the bulls) expect.

(2) A great primary bull market is an expression of something changing in a very fundamental and meaningful way. Following a great bull market, the world is never quite the same.

...Second note -- The Washington-based IMF recently completed its promised sale of gold. It was rumored that the IMF would have to sell its gold on the open market. Not so. The fact is that central banks eagerly gobbled up the IMF's gold. According to The Financial Times, the IMF sold its gold directly to the central banks of India -- 300 tonnes, Sri Lanka -- 10 tonnes, Bangladesh -- another 10 tonnes, and Mauritius -- two tonnes.

And why are these central banks trading paper for gold? After all, it's the central banks that are creating the fiat paper. Why are they swapping their own beloved products for gold?

The latest anti-gold propaganda centers around the gold exchange traded funds. A full page article in Sunday's New York Times implied that only with the advent of all the gold ETFs has gold boomed. The article implies that the ETFs (mainly GLD) allowed an ignorant public to buy gold, and that this is the reason for gold's recent advances. The article did not explain why gold has risen yearly for almost a decade, even before gold ETFs were created. The Times article hinted that gold was in a bubble, and that it was a dangerous bubble. The article emphasized the 20-year gold bear market of 1980 to 1999.

...For the first time, more gold is being taken for investment than is used in jewelry. Asians have been gold buyers for years, while Americans have accumulated dollars and are just beginning to learn about gold. Meanwhile, the ignorant media continues to publish "beware" articles about gold. Soros announces that gold is the "biggest bubble" in the area of commodities, but the Soros largest holding is in gold. Sound as though Soros wants to knock the price of gold down so he can buy more on the cheap.

These billionaire investors; they have no consciences. Hmm. maybe that's why they're billionaires.”

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