THE GOLDEN POT
gold news & views - charts & more
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Gold -- Sharefin, 10:30:25 07/06/02 Sat
No link - from GATA
Fear powers gold rally; inflation too
By Don Bauder
San Diego Union-Tribune
May 29, 2002
Proving that the markets are gripped by the heebie-jeebies (as if any proof were needed), gold keeps driving upward relentlessly.
Yesterday, gold futures contracts for June delivery settled above $324, the highest since March 2000, up $3.40 on the day. Gold is up 17 percent this year.
"Gold is the only bull market driven by mass fear instead of mass greed," says James Dines of Belvedere's The Dines Letter.
Richard Russell of La Jolla's Dow Theory Letters ticks off the reasons gold is rising steadily. "There has been excessive money supply creation by the Fed (Federal Reserve) to cover deficits," he says. This will prove inflationary. Also, "there is decreasing world gold production."
The flow of money out of U.S. markets helps gold, he says. The process is inflationary,and inflation is gold's friend.
For years, the world's central banks have been selling gold to keep its price down. "Their problem is that they sold gold at lower prices," and hence look foolish, he says.
There are extremely heavy short positions (bets on a price decline) in gold. Some shorting comes from gold producers themselves, who sell gold in futures contracts, in effect shorting their own product. So the rally is in part a short-covering affair -- that is, the shorts scurrying to buy to close out their short positions.
There is a primary bull market in gold, and it could go a long way, says Russell.
Kennedy Gammage of La Jolla's Richland Report says, "Everybody wonders what the equilibrium price will be, where the panic buying starts."
There are plenty of calamities waiting to happen. The largest banks have $30 trillion worth of derivatives tied to gold. (Derivatives are highly complex financial instruments that derive their value from another instrument.)
"If you get a daisy chain, a tsunami, some anomaly, you could have another Long-Term Capital Management (a hedge fund that had to be rescued by a Fed-arranged bailout in 1998) on your hands. Central banks are terrified that an event could bring down the financial system of the Western world," says Gammage.
Brian MacArthur of UBS Warburg says "certain gold companies have branded themselves as anti-hedging. Producer hedging has not been a threat to gold supply for the past two years."
Also, he believes "the threat that central banks would dump thousands of tons of gold into the market has receded."
There is a rise in investor interest in gold from Japan, North America, and Europe, says MacArthur. He has raised his earnings forecasts on Barrick, Newmont, and Placer Gold stocks, and likes Newmont the best.
Should you buy gold bullion, coins, or stocks? Russell would not buy bullion, because the metal must be tested rigorously when you sell it, but he would buy coins. Right now, the South African krugerrand is most favorably priced.
He also likes gold/silver stocks such as Newmont, Agnico-Eagle, Gold Fields, and Durban Deep.
Gammage would not buy the companies that are hedging the metal, or effectively shorting it, such as Newmont, Barrick, Anglogold, and Placer Dome. Newmont got into hedging through an acquisition, and Gammage would buy the stock as soon as it gets rid of its hedge book.
He likes Goldcorp, Durban Deep, Kinross Gold, Harmony Gold, Pan American Silver, and Central Fund of Canada, a trust that has 99 percent of its assets in gold and silver.
"Gold stocks have outperformed all other
groups so far this year, and nearly every gold is in an uptrend," says Dines. He likes Placer Dome in particular, saying that it has lagged other golds in the run-up for no cogent reason. He thinks the company might be bought.
He also likes the convertible bond of Battle Mountain.
Alan M. Newman, editor of the Great Neck, N.Y.-based Crosscurrents newsletter, says the rise in gold, gold shares, and other commodities is an indication the Federal Reserve is pumping up money to avoid deflation.
Newman is "still enthusiastic about the prospect for gold shares," but he thinks the move has come too far, too fast. So he would close out half his recommended positions in Meridian Gold and Goldcorp.
Fiat -- Sharefin, 10:27:23 07/06/02 Sat
Commodity prices should be watched
The other day, a San Diego purchasing manager almost ruined my lunch: He told me that prices for many industrial commodities are definitely creeping up.
At a time of widespread excess industrial capacity, that is surprising and could be alarming. But on second reflection, I considered it something not to worry about. Yet.
"How could commodity prices start to rise in a world saddled with overcapacity?" asks economist Michael Swanson of Wells Fargo. He wonders if higher commodity prices will eventually show up in the consumer price index. And if the Federal Reserve will take those higher prices into account when it considers the long-delayed interest rate hike.
Fiat -- Sharefin, 10:23:05 07/06/02 Sat
When did the world see these trends before?
They're not predictions. Maybe not even warnings.
But increasingly, economists are reminding us that certain contemporary phenomena have eerie parallels with the 1930s. The economists emphasize that we are not headed for a 1930s-style debt deflation.
The economists are simply heeding Santayana's words, "Those who cannot remember the past are condemned to repeat it." Because the ranks of people who were adults in the 1930s are growing thinner every day, it is well to study some of the economic trends and political mistakes that combined to put the world in depression.
Gold -- Sharefin, 10:10:11 07/06/02 Sat
Fears as South Africa changes gold standard
GILINKOSI Madikizela is an angry and embittered old man - with good reason many might believe. For 22 years he hacked gold ore seams deep under South Africa’s soil in the Durban Deep and Grootvlei mines near Johannesburg, helping the country’s white elite become one of the richest communities on earth. Madikizela is disaffected because he cannot hope to prosper from a revolutionary mining law approved last week by South Africa’s principal parliamentary institution, the lower House of Assembly.
The highly complex Mineral and Petroleum Resources Development Bill basically removes land and mineral rights held in perpetuity by the big, white-owned mining houses, such as Anglo American, and invests them in the government. The mine owners have cried "nationalisation", while the government has responded: "Justified redistribution of inequitably held wealth."
The mining houses have argued that the new law will deter billions of pounds of potential international investment in South African mining developments. The government replied: Nonsense, it’s in line with, and more generous than, best practice in most other countries.
Gold -- Sharefin, 09:52:42 07/06/02 Sat
Gold seen peaking at $340 this year
Gold could climb as high as $340 (U.S.) an ounce this year, but will likely average at about $320 for the year as a whole, according to Bart Melek, industry and commodities economist at CIBC World Markets Inc.
On June 4, bullion closed at $327.80 on the New York Mercantile Exchange, the highest close since October, 1997.
But bullion subsequently fell back in part as a result of profit-taking.
Still, it averaged $321 over the month of June, which is the highest monthly average in the past 56 months.
Since month-end, it has fallen back further, closing yesterday at $310.90.
Mr. Melek expects the price of bullion will rally later in the year. Underpinning that view is a forecast that consumer spending in the United States will remain healthy and that the U.S. economy will continue to improve. "That means that jewellery sales will probably have a bit of rebound from what they were recently."
He also expects rekindled investor interest in gold this year if, as expected, the U.S. dollar continues to weaken as the U.S. current account deficit grows.
He expects that the price of gold will rise further next year to average at about $325.
Gold -- Sharefin, 09:51:29 07/06/02 Sat
Resource sector lustrous: manager
MARGOT NAUDIE tells SHIRLEY WON that gold will lead charge in economic recovery
Fund manager Margot Naudie is upbeat on resource stocks over the next year, and in particular expects the gold sector to outshine others in that group.
"Over the next 12 months, I expect that the resource shares will continue to outperform the broader market," says the value-oriented manager with Toronto-based TD Asset Management Inc.
History indicates that the resource sector generally outperforms for periods of up to 18 months coming out of an economic downturn, Ms. Naudie says.
"I think we have had a first move up in these stocks, and I would expect that they will move higher with some setbacks over the next 18 months."
Many resource stocks have upside because of rising commodity prices in a global economic recovery combined with cost-cutting undertaken during the lean years, says the manager of funds such as TD Resource and TD Precious metals.
She is more bullish on gold than other resources because she expects the U.S. dollar to continue to weaken, and the yellow metal has negative correlation to the greenback. Production has been falling because the industry needs gold at $350 (U.S.) an ounce at least to justify new mines, she adds.
The manager says she believes that the gold price could reach $350 or higher over the next year.
Gold -- Sharefin, 09:48:31 07/06/02 Sat
Troubled times bring rush for certainty of gold
GOLD, the age old refuge in times of trouble, is coming back into fashion in New Zealand amid rising military tensions and economic uncertainty around the world.
Bullion dealers say they have noticed an increase in inquiries about gold as an investment, and a rise in the number of people buying the precious metal.
A Walker and Hall spokeswoman said there had also been some interest in Wellington, though she declined to be specific about the amounts involved, citing privacy and security reasons.
"We've had one or two fairly large orders that we normally wouldn't process very often."
She said most people buying gold as an investment bought bars as opposed to coins, which were slightly more expensive because they were imprinted with a design. Both came in one ounce units, she said.
Many of the investors were Asians -- traditionally the biggest gold investors in New Zealand -- and the most common reason appeared to be concern about the world situation.
"Basically, no matter what happened, gold is always going to be sold."
Fiat vs Gold -- Sharefin, 09:36:02 07/06/02 Sat
Best gold & silver stocks for the half-year
Gold producers with reserves sold forward have paid a heavy penalty as stock prices idled relative to the supercharged performance of companies offering full exposure to the gold price. Whereas hedged producers have bested the gold price by 35%, unhedged producers were a 100% better at the half-way mark, with a 129% gap over the imperilled S&P500 index.
Fiat vs Gold -- Sharefin, 09:33:30 07/06/02 Sat
New Stock Ratings on JP Morgan Chase, Barrick Gold,
JP Morgan Chase & Co (NYSE:JPM) - Underperform
Barrick Gold Corp (NYSE:ABX) - Outperform
Gold -- Sharefin, 09:26:03 07/06/02 Sat
Timing is Key for Gold
The gold price has been under pressure over the past week or so and to put this weakness into some perspective is Kamal Naqvi, He's the precious metals specialist at Macquarie Bank. Kamal, the last time we spoke to you on this programme, back in January, gold was trading at $286 an ounce at the time, and you were quite confident that gold would push through $300 sometime this year. But were you surprised by the magnitude of the rally?
KAMAL NAQVI: I have to admit I was a little bit. I think I was looking at prices getting up to testing $315 and suspected that that would prove quite a hardy resistance. But the weakness that we saw in the equity market, then in the US dollar and also the extent of some of the statements from gold producers regarding [indistinct] in hedging were a little bit stronger than I had expected. And as a result, I think it did justify it's move up to a peak of just above $330 an ounce.
MININGWEB: As you say, gold did threaten to crack through the $330 level, It's currently back at $314.50. What do you think is behind this latest bout of weakness?
KAMAL NAQVI: It's been interesting, the latest bout, given of course over the last two weeks it's seen further equity market weakness. And with the WorldCom scandal, followed then by Xerox and of course pressure on the US dollar, I think that one of the reasons why we haven't seen gold react as maybe it might have was because of timing. We've come up to the end of the quarter, the end of the financial year for some organisations, and also coming up just towards the July 4th holiday in the US, and I think that we saw a lot of profit-taking from funds that were already long gold and, indeed, probably making up for losses that they made in other markets. So I do suspect there was a bit of a timing issue for gold The other issue which is perhaps more of a problem is that many of the normal market participants, the CTAs, the funds, a number of the bank traders, are already long gold and it really needs to get significant worse for them to decide to go longer and we are still yet awaiting a more general move into gold. But I still remain fairly optimistic, over the next few months, that we can still see a new high for the year.
MININGWEB: You did talk about investor confidence. It seems to be taking a knock almost on a daily basis in America. Surely we would have expected a rush to gold, following the likes of the WorldCom disaster?
KAMAL NAQVI: Yes. As I said, I don't think the timing was one of the reasons why we haven't quite seen that push. I think post the July 4th holiday will be a far better time to assess whether or not we are seeing a more of a move from investors, and particularly from some of the funds into gold, and I suspect it will be a much better reflection of the underlying sentiment. But I certainly do believe that if we see a continuation of the equity market losses that we have certainly seen over the last couple of weeks, and more pressure on the US dollar, with only really intervention resisting further weakness, then I do think gold will reflect that further, and indeed gold equities will also.
MININGWEB: Do you think we could see another attack on the $330 level, given what you've said?
KAMAL NAQVI: I do expect that. I have to admit, I don't expect it very, very quickly. I think that what you will need to see is a move for maybe some of the more generalist funds to be concerned about underlying values, with furthermore significant losses in equity markets ? talking about 10% losses in that. And under that circumstance, I think you could see a wider push, in which case getting through $330 in towards my target of $340 still seems quite obtainable. I see that happening over this quarter, as the most likely time, and then perhaps easing back towards the end of the year, as I and I guess a number of economists are expecting some sort of recovery, stabilising equity markets towards the end of the year.
MININGWEB: Is there any danger of gold falling below $300 an ounce any time soon?
KAMAL NAQVI: I think it's unlikely. One of the interesting things that I've heard over the last week or so was, with that push down on Friday down to $310 and indeed before that, were a number of reports form Asia of quite good interest, if prices fell towards that level. And certainly when we saw that fall on Friday, there were a number of interested buyers in Asia, and there were also a number of investors and indeed some of the banks that are interested buyers on a significant dip, like we saw on Friday, and I think there's enough interest to withstand what I suspect would be a fairly modest amount of selling. I guess that's the other point. Is it unlike previous failed rallies in gold. This time around, most investors are going to be very weary about short-selling in the market in any size, because clearly we are seeing quite a bit of volatility, particularly on the upside, and I suspect that will restrict the level of short selling.
MININGWEB: And when you talk about Asian banks, do you mean central banks in particular?
KAMAL NAQVI: No. I'm talking about Asian investors, Asian funds, looking to buy [indistinct] Asian central banks. I wrote a note this week just noting that Asian central banks have moved into US dollars in a significant manner, ever since the Asian crisis in '97, '98, and the possibility that in the current climate and the uncertainty over foreign exchange values, that they might consider increasing their level of reserves from 2% and less to something more significant in gold. But it has to be said, there has been absolutely no sign of that so far.
MININGWEB: Making a call on gold is also like making a call on the dollar ?
how do you see that moving in the second part of this year?
KAMAL NAQVI: I think continued weakness for as long as the equity markets remain volatile and falling lower. I see very little in the short term to see that changing, I suspect that the economic data are going to continue to be mixed. Clearly further earnings results and concerns about accounting measures are only going to add to some of the downwards pressure. However, as I mentioned earlier before, I think towards the end of the year, we certainly are expecting things to stabilise and the early signs of a much more genuine recovery than what we saw earlier this year, and we think that will give the sort of support to earnings that's required for equities to stabilise and to start to improve. Indeed, I think the dollar will follow a very similar pattern.
Gold -- Sharefin, 09:21:48 07/06/02 Sat
Gold shines in downturn
Gold prices have been on the rise since the beginning of the year, and crude oil and gas prices, while down slightly from their 2000 highs, have stayed healthy enough for industry experts to feel confident about the long-term outlook.
"Gold funds are doing really well, but remember we've been suffering for 15 years," said Douglas Silver, president of Balfour Holdings Inc., a mining appraisal company.
Gold -- Sharefin, 09:19:22 07/06/02 Sat
Global price crash hits Indian gold
“The rush for gold is slowing and rumours of Russia offloading stocks have been curbed. The possibility of a terrorist attack on the US on July 4 and the war-like situation between India and Pakistan have also been put to rest, leading to a fall in prices,” an analyst with the Bank of Nova Scotia said.
However, lower prices have failed to win over the Indians. Though imports of TT (116.64 grams) bars have gone up to 12,000-15,000 TT bars per day, as compared to 2,000-3,000 bars during May-June this year, retail purchases have remained poor.
“Though the demand is stagnant, it will not die. Demand for the metal usually picks up during the marriage season. The industry is hopeful that the demand will pick up from September.”
Fiat -- Sharefin, 09:04:52 07/06/02 Sat
Markets to fall further 50 per cent
Europe's top fund manager sells equities for bond safety
Hugh Hendry, Europe's best-performing fund manager, believes equity markets will fall a further 50 per cent before bottoming.
In the last three weeks Mr Hendry says he has sold off a third of his equity portfolio to seek the sanctuary of government bonds.
"I have been consistently 100 per cent invested for the last three years, but I am now selling stocks," he says.
Mr Hendry admits he is not certain what will happen next, but he is raising the possibility that we may be heading for a 1930s-style depression, rendering it impossible to make money from the markets.
Fiat -- Sharefin, 08:55:37 07/06/02 Sat
Central bankers seen quiet on dlr at BIS meeting
BASEL, Switzerland, July 5 (Reuters) - Central bankers flocking to Basel for the Bank for International Settlements' annual meeting this weekend and Monday may have little to say about the dollar -- at least if they know what is good for them.
With stock markets struggling -- the U.S. Nasdaq market has just finished its worst ever first-half -- and investors nervous, this is not a time to upset markets.
The dollar has only just steadied near parity to the euro after recent declines against the European currency and yen. But for at least one European central banking official, the dollar's "trend is still the same" -- lower.
Central bankers have thus far had little to say about the dollar's recent declines. So far, the only currency intervention has been to support the dollar versus the yen during the latest period of dollar weakness.
There hasn't been much verbal intervention. One official recalled the situation a couple of years ago as the euro weakened, and the European Central Bank's board members made often, seemingly conflicting pronouncements.
"They talked too much," the offical said.
"The discussion will be dominated, I'm sure by the continuing uncertainty in the financial markets," said one European central bank expert who is paid to worry.
Central bankers might be tempted to tighten.
"But you have the potential for a very non-linear response. You could find that all of a sudden the debt service ratio starts to look more worrisome," said one expert.
Here again, the dollar may be a worry if its slide leads foreign investors to sell U.S. assets, for example.
Gold -- Sharefin, 08:52:35 07/06/02 Sat
Gold rally to resume, say analysts
Newsletters see stocks crashing, bullion surging
Gold investors say they are more convinced than ever their metal will resume its rally as Wall Street falls victim to a stock-market crash later this year.
Bishop says the ailing stock market, enjoying a post-Independence Day rally on Friday, may provide the next spark for gold. "Smart money continues to exit the market on rallies. The loss of investor confidence in U.S. companies is being accompanied by questions about the basic integrity of our financial markets," says Bishop, who forecast a Fourth of July rally for the stock market several days ago.
The price of gold, and gold stocks, is becoming more tied to the health, or maladies, of the stock market, and less tied to the dollar and international events, say gold's supporters.
"Somewhere above the $340/$360 range, I expect to see a one-day jump of $20 to $25," says Ian McAvity, a longtime gold investor and editor of the Toronto newsletter Deliberations on World Markets. "It may coincide with the Dow well south of 8,000."
In trading one day last week, gold's price rose $5 an ounce in the early New York hours as the Dow Jones Industrial Average fell 200 points. Yet as John Doody, editor of Gold Stock Analyst, points out, the gold rally was short-lived. "By day's end, the positions had reversed as a result of obvious but unannounced government intervention in the stock and gold markets," said Doody, considered one of the most exhaustive sources on gold's price movements.
Doody and dozens of other newsletter writers are pointing increasingly to what they see as weakness in gold that is tied to yen-selling by the three big central banks: the U.S. Federal Reserve, the Bank of Japan and the European Central Bank. Others say commercial banks are short-selling gold to depress the bullion rally.
In this year's first three months, "the big New York banks that play this market, Chase/Morgan and Citibank, increased their gold derivative books from $48.9 billion to $56.5 billion, a 15.5 percent increase since the start of the year," Doody reported in his newsletter. The U.S. Office of the Comptroller of the Currency tracks options, futures, swaps and other contracts sold by commercial banks as derivative products. "Whether the banks' derivative position increased due to Delta hedging to maintain a neutral exposure, or due to shorting the metal to try and jam the genie back in the bottle, we don't know," Doody says.
Fiat -- Sharefin, 09:07:22 07/04/02 Thu
Long but excellent article - well worth the read.
What Tice Thinks: Extraordinary Volatility and Unusual Divergences
Wall Street must now manage its various risks especially carefully. There is also what must be a festering issue of enormous losses lurking out there somewhere in equity derivatives.
Adding insult to injury, the gold derivative market has also turned rather inhospitable to any derivative player short bullion or gold stocks. And then there are hints of unfolding tumult and losses in the obscure world of convertible arbitrage.
We are witnessing a dysfunctional system having set course for a serious financial accident.
So when the final bubble now running rampant throughout consumer and mortgage finance runs its course, we fear major financial and economic dislocations are unavoidable. A vulnerable dollar appears to provide a potential catalyst for an imminent piercing of the credit bubble.
Fiat -- Sharefin, 09:04:18 07/04/02 Thu
Long but excellent article - well worth the read.
Wall Street must now manage its various risks especially carefully. There is also what must be a festering issue of enormous losses lurking out there somewhere in equity derivatives.
Adding insult to injury, the gold derivative market has also turned rather inhospitable to any derivative player short bullion or gold stocks. And then there are hints of unfolding tumult and losses in the obscure world of convertible arbitrage.
We are witnessing a dysfunctional system having set course for a serious financial accident.
So when the final bubble now running rampant throughout consumer and mortgage finance runs its course, we fear major financial and economic dislocations are unavoidable. A vulnerable dollar appears to provide a potential catalyst for an imminent piercing of the credit bubble.
Fiat -- Sharefin, 07:41:15 07/04/02 Thu
Hedge fund manager warns of derivatives time bomb
Tony Dye, the fund manager dubbed Dr Doom for his pessimistic outlook on stock markets during the technology boom, warned yesterday of a "lurking time bomb" of creative accounting in the derivatives market.
The value of contracts in the over-the-counter derivatives market has hit $110 trillion (£72 trillion), he said, with the market now worth three times the global economy.
Speaking at a hedge fund conference in London, Mr Dye said: "The question is why people are using them so much. The real reason must be because some people are using these for creative accounting purposes.
"My guess is that there'll be some real nasties in the derivatives market in the next 12 to 18 months."
Gold & Fiat -- Sharefin, 07:35:18 07/04/02 Thu
North American Banks Under Growing Pressure From Gold Derivative Positions
This interplay between gold and paper currencies may be of academic interest to commentators, but is life and death to banks who have been making money in derivatives all the time gold has been in a bear market. Now the game has changed and a fascinating article has been published on a website called 321gold.com which claims that JP Morgan Chase & Co had notional amounts of derivative contracts outstanding which amounted to US$23.5 trillion as at the end of December 2001. To put this in context, the GDP of the United States is roughly US$10 trillion. And according to the Office of the Comptroller of the Currency JP Morgan had over US$41 billion of gold derivatives in this figure which represents around 65 per cent of all the gold derivatives held by US banks.
It also represents 149 million ounces of gold based on the price of US$279/oz as it then was. This is more than ten times the amount of UK gold sold by our deluded Chancellor between July 1999 and March 2002. There is little doubt that his action helped to keep a lid on gold during the period, so what chance would JP Morgan have of retrieving its position without sending the price through the roof? The figures above are the gross outstandings and no one knows the exact the position. Common sense, however, dictates that they were running a short book and the squeals from JP Morgan analysts every time the gold price rises confirm this. If this is the case the derivatives book could implode if gold rises to a certain level and there are guesstimates circling the market that it is no more than US$340/oz.
Small wonder then that the Royal Bank of Canada got its knickers in a twist recently when John Embry, a senior director who runs its Royal Precious Metals Fund, issued a report suggesting that central banks have, indeed, conspired to keep the price of gold low. RBC's position is nowhere near as big as JP Morgan's as it had total outstanding derivatives of only US$1.2 trillion and is one third the size. Nevertheless an implosion would do serious damage on a scale that is reflected in its decision to retract this research report which suggested that the price of gold is set for further steep rises.
This was a remarkably naïve reaction as all it did was put the spotlight on RBC's vulnerability to gold. By so doing RBC raised memories of a certain Dinsa Mehta who was with JP Morgan for a long time and ran its gold book. Suddenly he was not there any more and the mystery of his departure led to rumours, doubtless wholly unjustified, that he had done a Keatley on the hedging position. Mark Keatley was the finance director who ran Ashanti's gold hedging programme which brought the company to its knees three years ago. In such circumstances these banks should take a lead from London stockbrokers Cazenove which simply closed ranks when under pressure during the Guinness fiasco. Panic is not a pretty sight.
Gold -- Sharefin, 07:22:55 07/04/02 Thu
Gold Hits 7-Wk Low; More Falls Unlikely
The continued strengthening of the dollar has forced spot gold to a seven-week low in London Thursday morning but further falls are unlikely with trade expected to be quiet due to the closure of the U.S. markets for the Independence Day holiday.
Bulls feel the market remains in a strong uptrend and will rechallenge the June high of $330.55/oz in the next few weeks now the retracement has been completed.
Others aren't as positive. They believe the market's failure to rally in reaction to a slump in the stock markets suggests the upward impetus has been lost and a fall back to $300/oz support is likely as long position holders liquidate.
Silver held in a tight range between $4.91-$4.93/oz and has the potential to extend the recent rally up to resistance at $5.10/oz.
UBS Warburg said speculators on Comex have the potential to add 100 million ounces to their net long position and the market could rally after the weekend.
Gold -- Sharefin, 07:06:32 07/04/02 Thu
Aurion presses Placer on offer
AurionGold, Australia's largest independent gold miner, yesterday stepped up pressure on Placer Dome of Canada to improve its offer for the company.
"Placer will probably have to sweeten its offer slightly but at the end of the day we think this deal will be done," said John Bridges, analyst at JP Morgan in New York.
Aurion has advised its shareholders not to accept the current offer but has indicated it could change its position if the offer included a cash component. Harmony Gold of South Africa, which has a 9.8 per cent stake in Aurion, has agreed to support the bid. Placer was unavailable for comment.
Gold -- Sharefin, 07:04:43 07/04/02 Thu
Newmont predicts gold in multi-year uptrend
Pierre Lassonde, president of Newmont Mining Corp., the world's biggest gold miner, said yesterday the metal is in a "multi-year" uptrend because of weakness in the U.S. economy and political turmoil.
"Gold at around US$320 an ounce is already at a five-year high with the U.S. current account deficit running at an unsustainable 5% of gross domestic product and a 10% decline in the U.S. dollar," he said in an interview before receiving the Ecole Polytechnique's 24th Prix Mérite for professional excellence.
"I base my prediction on fundamentals and it'll take two years to wring the excesses out of the U.S. system," said Mr. Lassonde, co-founder of Franco-Nevada Mining Corp. Ltd. and former manager of two successful gold funds. "There are more WorldComs to come."
The U.S. needs a US$1.3-billion daily inflow of foreign currencies to maintain its former exchange rate but is getting only half that with the collapsing stock market, economic uncertainty, rock-bottom interest rates and an international flight to bullion, he said.
"Gold is the reverse image of the U.S. dollar and the U.S. is in for a double-dip recession and continuing dollar weakness," he said. "Go back to 1985-88 when the U.S. dollar lost 32% of its external value and gold rose 66% ... then later when central banks dumped tonnes [of gold] and drove it down to US$250."
He said the U.S. money supply is rising at 12% a year and rising inflation cannot be avoided.
"It'll take several years to muddle through and get U.S.corporate earnings back on track."
The newly minted Newmont, the leader by market capitalization and mine output following February's US$7-billion merger with Franco-Nevada and Australia's Normandy Mining Ltd., will move away from the traditional reticence of U.S. resource giants and tell shareholders "like it is," said Mr. Lassonde.
Gold -- Sharefin, 07:02:27 07/04/02 Thu
Gold biding time, restart run after holiday
Technical analysts and traders expect gold to move still lower next week before it consolidates at around the $308/oz, a price at which they believe it will make a fresh attempt at restarting its bull run to higher levels.
This bullish sentiment was echoed in an HSBC report issued today, in which metals analyst Merlin Mar Johnson says he expects gold to ease off to around $307/$308, before its makes further gains. "Overall the pressures exist that could take gold down to USD307-8/oz, but this will probably not happen before the US holiday has passed. We are still positive on the fundamentals of the gold market and believe that the gold price uptrend will remain in place," said Mar Johnson. He added that the persistent buzz of speculation that the Al-Qaeda terrorist network would launch a terrorist attack on one of the US's most important holidays, was "being taken seriously in the gold market".
The trader added a note of caution. He said the funds that were currently long gold were considered "strong" by market participants, sterilising much of the threat the potential liquidation of their positions posed. "But just remember that they might not be that strong if the price drops below $309 and that is a bit of a worry. We need another sign from the US equity markets or another big move in the dollar to keep this market going," said the trader.
Mar Johnson says the current "bounce" in the dollar is placing further downside pressure on gold. He says, however, that while the dollar may benefit from some temporary relief, "that ultimately the trend of dollar weakness is likely to resume".
Lone dissenting voice
The chorus from analysts - apart from the odd note of caution - is still unashamedly bullish. But it is becoming harder to discount the single dissenting voice of gold analyst Nick Goodwin, who warned last month that gold would make a final run at $330/oz before facing a "meltdown". "If you don't sell know you're going to pick up trouble," he said in a Miningweb report published last month.
With the retreat in South African gold shares over recent weeks, some punters may be giving Goodwin's warnings of a crash in gold shares more thought than they would have in May, when the index peaked at 3739 points. Today it continued on its volatile streak, closing on 2851 points. Gold equities analysts at Deutsche Bank and JP Morgan, have said the time is right to pick up gold shares at fairer values than they were a month ago; they maintain the view that the bull run is intact.
Gold -- Sharefin, 06:58:33 07/04/02 Thu
CHARTING ASIA: Gold Rally Fizzles Out
Has this year's bull run in gold ended? The charts say
it has, and that prices are unlikely to regain their June highs around US$330/ounce in the second half of the year.
That could have positive implications for Asian equity markets in particular, suggesting the risk-aversion of the last few months - caused by factors such as Wall Street's slide, the tumble of the U.S. dollar and fears of war between India and Pakistan - has eased, and that global investors are becoming less focused on defensive assets like gold.
The slide in the international spot gold price at the end of last week broke gold's medium-term uptrend line from late January, which came in at about US$317.10. That by itself implied gold would consolidate sideways in coming months, perhaps with a downward bias.
Gold -- Sharefin, 06:55:57 07/04/02 Thu
Gold rush - sure thing or passing fad?
With currencies volatile and stock markets heading south, some investors are once again investing in gold - one of the few assets that have seen a steady price rise since last year. In My Money, OH BOON PING finds out how you can participate in the current gold rush, as well as how long the rally will last
Gold -- Sharefin, 06:55:57 07/04/02 Thu
Gold rush - sure thing or passing fad?
With currencies volatile and stock markets heading south, some investors are once again investing in gold - one of the few assets that have seen a steady price rise since last year. In My Money, OH BOON PING finds out how you can participate in the current gold rush, as well as how long the rally will last
GATA on Gold -- Sharefin, 00:38:30 07/04/02 Thu
Bill Murphy On GATA
"RBC Report, Fundamentals of Gold, & Why Gold Will Go Higher" - Audio
Gold -- Sharefin, 19:01:17 07/03/02 Wed
The Trepca mining complex: How Kosovo's spoils were distributed
In northern Kosovo, near the town of Mitrovica, sits a huge
dilapidated industrial site known as the Trepca mining complex.
During the 1980s, it employed 20,000 workers and accounted for 70
percent of all Yugoslavia's mineral wealth. One economist described
Trepca as a "colossal conglomerate composed of more than forty mines,
foundries, and subsidiary plants-which [at its height] generated 25
percent of the entire regional industrial production and figured
among the principal exporters of the ex-Yugoslavia." According to the
same study, "In the subsoil of Kosovo, one of the richest of Europe,
enormous deposits are hidden of lignite, lead, zinc, non-ferric
metals, gold, silver and petroleum," on top of 17 billion tons of
"There is over 30 percent lead and zinc in the ore', said Novak
Bjelic, the mine's beefy director.... We export to France,
Switzerland, Greece, Sweden, the Czech Republic, Russia and
Belgium.... In the last three years we have mined 2,538,124 tons of
lead and zinc crude ore ... and produced 286,502 tons of concentrated
lead and zinc and 139,789 tons of pure lead, zinc, cadmium, silver
Hedges' visit was a scouting mission, alerting US investors that
while geo-strategic interests were at stake in the Balkans, investors
should not forget the substantial assets to be seized-he estimated
its value around $5 billion.
Silver -- Sharefin, 06:29:39 07/03/02 Wed
NEWS MEDIA SILVER BLACKOUT
Be assured at the outset that the following report is far from complete; and that certain details not mentioned here are subject to being released at a future date, possibly at another website if appropriate. This is not a limitation on the part of Silver Investor; rather, at this time, the threshold of controversy needs to be expanded to a certain boundary and no further. Sorry to tantalize you! In case anyone has wondered---I have never functioned as an informal voice on behalf of any silver company, there is no editorial consultation; views expressed are those of private investor and concerned individual. For the time being, consider this as an introductory outline of subversion in the mass media concerning the precious metals markets, and what kind of noises we may expect to hear from these allegedly distinguished sources (the awards they have come from one another) as silver enters (visible) crisis phase in 2002 and triggers earthquakes and lightening also in gold and platinum. This subversion consists mainly in what they have failed to tell the public---that these markets are manipulated, and a crisis is unavoidable.
Fiat -- Sharefin, 00:18:03 07/03/02 Wed
Three charts pointing to the coming MCHVIE over the next few days.
Total market volumes - Amex/Nasdaq/NYSE
Swing chart - Amex/Nasdaq/NYSE
Up/Down Volume Ratio - Amex/Nasdaq/NYSE
Such radical moves are also shown in the New Highs/New Lows data.
All data from Yahoo Market Digest
Dave -- Sharefin, 00:03:23 07/03/02 Wed
Here's a chart that is slightly out of date but shows a good graphical description of who is holding the gold.
And if the gold that has been leased/sold by the Central Banks and is now investment/jewelry etc were presented on the chart it would show the CBs with approx 10,000-15,000 tons less and the public with the rest.
The impact of this chart tends to belittle the supposed CB holdings and to add lustre to the gold that is in public hands.
RE: The Future of Physical Investment in Gold -- Dave Brooks, 12:20:31 07/02/02 Tue
From the article:
The Future of Physical Investment in Gold
I have some question about the distinction between "Investment Gold Jewelry" and real jewelry made of gold. The WGC seems (based on this article) to be unable to quantify gold fabricated into jewelry but purchasd as investment. An example of this is plain gold chain, sold by weight. So how much "above-ground" gold is being "hoarded" or is heirloom quality and is therefore unlikely to enter the market at current prices? From the article:
"According to the latest GFMS estimates, the total above ground stock of gold stands at 145,200 tonnes. Of this figure, about 17% or 22,200 tonnes can be labeled as “private investment.” Although these holdings represent only a third of the amount of gold held in jewellery form, the private investment stock is nevertheless, equal to two-thirds of the size of cumulative official holdings, and therefore, represents a significant cornerstone of physical demand."
I read this two ways, either the amount held in "private investment", including jewelry, is about 66,600 tonnes or jewelry PLUS private investment is about 88,800 tonnes. Either way, these numbers are about half the quoted amount of above-ground gold (45% and 61% respectively).
Can the balance (55% to 39%) be accounted for in Central and bullion bank holdings, thus making it more likely to enter the market, even at todays low prices? These numbers seem high, (79,200 to 56,400 T), as does the total number quoted (145,200 T). Does anyone have an estimate based on non-WGC / CFMS research?
Gold -- Sharefin, 08:58:52 07/02/02 Tue
Five Years After Bre-X, How is the Industry Shaping Up
At the time of this writing, the
gold price has remained well
above the psychologically
significant US$300/oz level for
some weeks.The last time it
traded at these lofty heights for
any length of time was in late
1997 - five years ago - but then it
was on the way down.
Gold -- Sharefin, 08:42:48 07/02/02 Tue
JSE propped up by gold shares
Gold shares once again bucked the broader trend on the JSE Securities Exchange South Africa (JSE) today rocketing over 4% following strong demand for gold ADRs in New York overnight.
However, the broader local market, which also took its cue from offshore, was weaker.
"The only thing keeping us up today is gold shares," a dealer said. "This is not because of the bullion price, but because we saw good demand in New York last night."
"We are broadly negative following what happened in the US yesterday and what's happening in Europe today. I don't see much activity going forward," he said.
The Wall Street Journal reports that in New York on Monday, yet another batch of financial worries, this time about companies including WorldCom, Electronic Data Systems and International Business Machines, dealt stocks another setback.
The Nasdaq Composite Index, dominated by besieged technology shares, started the new quarter by plunging 4%, to below the panic low it hit following the September terrorist attacks.
Gold -- Sharefin, 08:01:00 07/02/02 Tue
Gold Fields' CEO Seeks Growth, Eyes AngloGold Tie
Ian Cockerill, Gold Fields Ltd.'s chief executive officer as of today, faces a new challenge with gold having its best year since 1987 -- how to spend record profits at the world's fourth-largest producer.
Most gold deposits in South Africa, where Gold Fields and its predecessors have been mining for a century, lie miles underground and are more expensive to exploit than those abroad. That will force Cockerill and his counterparts at bigger rival AngloGold Ltd. to look elsewhere or combine, analysts said.
``There are only two options,'' said Leon Esterhuizen, an analyst at UBS Warburg in Johannesburg. ``Put AngloGold and Gold Fields together, or they can both go overseas in a big way.''
Gold -- Sharefin, 07:59:48 07/02/02 Tue
South Africa May Cede 25% of New Mining Projects to Non-Whites
South Africa will probably propose legislation forcing mining companies to cede at least a quarter of any new projects to partners controlled by people disadvantaged during white rule, the mining ministry said.
Companies such as Anglo American Platinum Corp. and BHP Billiton Group are already studying the effects of so-called black empowerment laws in the world's leading producer of platinum, gold, manganese and chrome. Last week Parliament passed a bill transferring ownership of mineral resources from miners to the state, part of a campaign to foster black investment.
Gold -- Sharefin, 07:57:38 07/02/02 Tue
Photo Makers Need Silver Despite Going Digital
"For the last five or 10 years, people have called in the end of photographic silver. But it's not too sharp because people don't change technologies quickly and the price for digital cameras is still too high for many consumers," said Ross Norman, analyst at TheBullionDesk.com.
"You would have to see a dramatic change in pricing for things to change. At the moment, it's not compelling for people to bin their old cameras. The traditional sector still uses silver in films and on papers, and there is rising demand for reprints."
The precious metal, mostly associated with jewelry, is a key ingredient in photographic film and photo paper and is also used in electronics because of its malleability and high conductivity.
The photographic sector accounts for around 25 percent of total fabrication demand for silver.
Demand for silver-bearing photographic products dropped by four percent in 2001 to 210.2 million ounces from 219.5 million the year before, according to the Washington-based Silver Institute. However, the use of traditional film in China rose by 30 percent.
"The big question over the absolute impact is clouded by a negative impact by digital photos in Western countries. But at the same time, there is growing use of film in
developing countries, especially in China and India, with growing incomes and falling costs of cameras," said Kamal Naqvi, metals analyst at Macquarie Research.
Gold -- Sharefin, 07:54:15 07/02/02 Tue
Australia's Newcrest Significantly Boosts Gold Resources
Australian gold miner Newcrest Mining Ltd. (A.NEW) Tuesday substantially increased its estimate of gold resources following additional drilling and a reassessment of the value of its resources using a gold price estimate of A$500 an ounce, up from A$450/oz.
The review increases Newcrest's total gold mineral resources by 12 million ounces to 54 million ounces, while its copper resource estimate has risen by 400,000 tons to 3.7 million tons.
Newcrest said its estimate of resources at its key Telfer mine redevelopment project in Western Australia has increased by 1 million ounces to 20 million ounces. Of this amount, about 17.4 million ounces has been upgraded to the more certain reserve category, indicating this area is likely to be explored.
The reserve upgrade will increase Newcrest's attractiveness as a potential takeover target in the fast-consolidating gold industry. Earlier this year, U.S.-based Newmont Mining Ltd. (A.NEM) acquired Australia's largest gold miner Normandy Mining Ltd. for A$4.5 billion, while the country's second largest gold miner AurionGold Ltd. (A.AOR) is under a A$2.0 billion takeover bid from Canada's Placer Dome Inc. (PDG). Newcrest is widely tipped to be next on the shopping list of South African and North American gold miners.
Gold -- Sharefin, 07:50:55 07/02/02 Tue
The Future of Physical Investment in Gold
For the purposes of this presentation, I shall define “physical gold investment” as that which is purchased by individual investors in the form of bars and coins. This is consistent with the definition used in the WGC-commissioned GFMS study entitled “Retail Gold Investment and Private Investor Stocks - A Review” published in November 2001. I am therefore, not including the offtake in investment jewellery, as both WGC and GFMS maintain that it is rather difficult to gauge and to differentiate underlying buyer motivation when tracking such purchases. The definition used herein includes certain “paper” products such as gold bullion storage accounts and gold accumulation plans, but excludes gold derivatives.
The annual range of the global retail physical investment market is approximately 275-310 tonnes, during the most recently studied period (1993-2001). Although in dollar value terms this demand averages only about $3 billion per annum (a tiny sum when compared to the amount of stocks and bonds bought annually), the estimated potential size of the global physical investment market could well be between 500-700 tonnes on an annual offtake basis. My hypothesis for the 100% increase in the amount of foreseen physical investment demand is based on projections of annual additional tonnage offtake from only a few key countries (India, China, Japan, & USA). In the case of India, China and Japan I base my estimate on just 0.1% of the amount in private savings seeking to purchase gold. If we are to take into account the potential additional tonnage of offtake that could come from other regions, for instance from the USA, South East Asia, The Middle East, South America, and even Eastern Europe, given a set of “right” circumstances, my current estimates could eventually come to be regarded as conservative.
Gold -- Sharefin, 07:34:25 07/02/02 Tue
Germany's Ver.di Says Bundesbank Should Sell Gold
Berlin, July 2 (Bloomberg) -- Ver.di, Europe's biggest union, proposed that the Bundesbank sell most of its gold reserves to invest in public projects, German newspaper Die Welt said.
``The Bundesbank should sell as much as possible of its gold reserves,'' Ver.di President Frank Bsirske told the paper. ``Given the current gold price, one could make more than 27 billion euros ($26.6 billion).''
The revenue should be used to improve infrastructure, child care, research and education, to improve the quality of life and create jobs above all in eastern Germany, said Bsirske, according to Die Welt.
Bundesbank President Ernst Welteke earlier this year said he may sell some of the bank's gold to invest the money in better returning assets after a 1999 accord limiting central bank sales of gold expires in 2004.
Gold -- Sharefin, 00:13:46 07/02/02 Tue
Gold Fields added to Gold & Silver index
Gold Fields, South Africa's second biggest gold producer, has been added to the PHLX Gold & Silver Sector (XAU) Index.
The XAU is a capitalisation-weighted index composed of the common shares of eleven companies involved in the gold and silver mining industry. On a current market value basis, Gold Fields will comprise approximately 12.5% of this Index, thereby ranking it the fourth largest component.
One of the largest gold producers in the world, Gold Fields has a market capitalisation of about 57 billion rand (US$5.5 billion) and produces about 4.5 million ounces of gold annually from operations in South Africa, Ghana and Australia.
The company has proven and probable reserves of 84.5 million ounces. It also has a 51% stake in an advanced stage exploration project, the Arctic Platinum Partnership, in Finland.
In addition to Johannesburg and New York, Gold Fields trades on the London, Paris, Brussels and Swiss stock exchanges.
Gold -- Sharefin, 00:10:41 07/02/02 Tue
The short term is always filled with noise that'll promise to take investors eyes off of the correct ball in terms of gold market valuation - the question of dollar valuation. We suspect in hindsight, gold's lag in confirming last week's dollar break will be seen as its last buying opportunity perhaps for a long time.
We are of the opinion that gold's weakness in recent days is related to expectations the bulls will be able to lift US share averages. The averages were largely flat last week, but the broader markets were up a little bit compared with the prior week. A bounce in stocks would I believe offer support for the dollar.
Gold -- Sharefin, 23:57:52 07/01/02 Mon
Don't panic, gold's run still intact
Stuart Leslie, chief bullion trader at Standard Corporate and Merchant Bank in Johannesburg, said the fall in gold late Friday in New York trade, was caused by one of the large bullion banks exiting a long position on Comex. Analysts and bankers would not divulge the identity of the mystery seller, but one rumour doing the rounds was that Morgan Stanley had cashed in on a stale position after lacklustre bullion price action over recent weeks. Funds remain 3.8 million ounces long on Comex, a potential overhang that remains a bearish indicator for the time being while the metal struggles to gain upside momentum.
Metal analysts believe the fall in the price of Friday, which triggered a series of long liquidations, was helped along by the Japanese Central Bank massaging currency crosses to retain a favourable (read cheaper) exchange rate relative to the dollar, to keep exporters competitive. They argue that the resultant firmer dollar helped depress gold.
Gold -- Sharefin, 23:43:18 07/01/02 Mon
Asian banks seen as new gold buyers
Notwithstanding the US investment bank-inspired gold sell-off last Friday, which saw the gold price dive almost US$10/oz at one stage, the events of last week and indeed most of this year (including terrorist- and Middle East-related nervousness) suggest Asian central banks could "theoretically at least" be convinced to return as a buyer of gold in the current economic climate, Naqvi argued. Miningweb understands the investment bank was Morgan Stanley.
Naqvi noted that over the past five years there had been a large move by central banks, particularly those in Asia following the region's currencies and financial crises in 1997/98, into US-dollar denominated assets. "Given the current uncertain outlook for the foreign exchange markets, particularly the US dollar, this could be one of the few occasions in our view when increasing central bank gold reserves could be justified," he said. "There are certainly quite a number of European central banks who would be more than willing to consider an exchange."
Gold -- Sharefin, 23:19:30 07/01/02 Mon
Anglo tightens grip on Gold Fields
Anglo lining up Gold Fields?
Gold & Fiat -- Sharefin, 22:01:40 07/01/02 Mon
Ayn Rand's Hymn to Money
Millions of people who have read Ayn Rand's 1957 monumental work "Atlas Shrugged" must have been impressed by an insert that could be entitled "Hymn to Money". This insert is buried in the 1600 pages of the novel and is difficult to find. However, it is a self-contained literary masterpiece in its own right. For these reasons it may be a good idea to publish it separately.
Some remarks may be in order. Ayn Rand uses the word "money" in the sense of gold money. This may not be in line with current usage, but it is certainly correct etymologically. The English word "money" is derived from the Latin moneta, meaning "forewarner", epithet of the goddess Juno. Her temple on the Roman Capitolium doubled as the Mint where the gold and silver coins of Rome were struck.
According to legend, during the siege of Rome by the Gauls, the sacred geese of Juno that lived around the temple forewarned the Romans with their loud cackling of the surprise attack the enemy has mounted. Under the cover of the night, the Gauls tried to scale the cliffs just below, thought to be an unassailable point of the Capitolium. The Romans, forewarned, could successfully repel the attack. In gratitude, they honored the goddess calling her Juno Moneta, or "Juno the Forewarner". And Rome went on to great things.
Irredeemable currency, in Ayn Rand's words "a counterfeit pile of paper", the output of the paper mill in Manhattan, does not deserve to be called "money". At any rate, you have been forewarned, and should be prepared for the attack of looters on your Capitol, already in progress.
We still don't know whether the 911 forewarning of Juno Moneta about the approaching collapse of society has been in vain or, perhaps, there is enough moral rectitude left in America's political and economic leadership to denounce globalization, and open the Mint to gold, in order to avert the coming tragedy.
Fiat -- Sharefin, 21:48:22 07/01/02 Mon
The Bankruptcy of The United States
SECRETS OF THE FEDERAL RESERVE
Fiat -- Sharefin, 21:35:44 07/01/02 Mon
Oracle counts on trader gullibility
To repeat, the socioeconomic mood of the country was to let all things pass, as long as they ended in higher stock prices. After all, we had a president, whether you liked him or didn't like him, who could say on national TV that it all depends on what the definition of "is" is. Nothing encapsulated the mood of the country better than that. (This isn't a partisan comment.) In any case, people were willing to look the other way as long as they thought they were getting rich in the process. Then, the sins get exposed, and no matter how bad you think things were, you always find out that they were worse than you thought. This always happens in bear markets.
I am continually struck by the fact that people who never believed there was a bubble or a mania now say things like "in the mania" or "in the bubble." Then, while finally acknowledging that we had one, they think everything's going to be OK shortly. This is not what history suggests about bubbles. Though rare, the consequence of them is long-lived.
Dock -- Sharefin, 21:33:17 07/01/02 Mon
I believe we've had inflation (in stocks & real estate) and if the markets & measures thereof weren't manipulated then we would seen this through the price of gold.
In my mind the price of gold should have gone up with the markets in the last 4 years of the equities bull.
The inflation in real assets & services were there but they fudged the numbers CPI et al to convince the masses (who were about to be financially raped) that all was well & inflation benign.
Part of the problem of the nature of the bull in equities is the deceipt & hiding of that which would alert the public.
So they decided to go short gold and keep the public in the dark.
And that which they tried to hide from the masses is now clearly visible since the tide has turned and going out.
Sharefin -- Dock, 11:05:51 07/01/02 Mon
I agree with your conclusion re 1995 & 1996. However it is the inflation (absent manipulation)that drives the gold. NOt an inverse relationship to the stock market.
To answer you question, no I was not in gold in 95 & 96. I owned gold in the late 70s and early 80s and again in the mid 80s.
In the late 80s I saw inflation as a non event for several years and therefore was not in gold until I saw inflation starting to show up in the Fed numbers in 98 & 99. I believe inflation is coming and it is going to make the 70s look like a piece of cake.
Fiat -- Sharefin, 09:51:03 07/01/02 Mon
Herein is the story of Amalgamated Copper and of the "System" of
which it is the most flagrant example. This "System" is a
process or a device for the incubation of wealth from the
people's savings in the banks, trust, and insurance companies,
and the public funds. Through its workings during the last
twenty years there has grown up in this country a set of colossal
corporations in which unmeasured success and continued immunity
from punishment have bred an insolent disregard of law, of common
morality, and of public and private right, together with a grim
determination to hold on to, at all hazards, the great
possessions they have gulped or captured. It is the same
"System" which has taken from the millions of our people billions
of dollars, and given them over to a score or two of men with
power to use and enjoy them as absolutely as though these
billions had been earned dollar by dollar by the labor of their
bodies and minds.
For thirty-four years I have been actively connected with matters
financial. As banker, broker, and corporation man, I have, from
the vantage point of one who actually handled the things he
studied, studied the causes which created the conditions which
made possible the "System" which produced the Amalgamated affair.
In my thirty-four years of business experience I have seen the
great fortunes, which are the motive power of the "System"
referred to, come out of the far West as specks upon the
financial horizon and grow and grow as they travelled Eastward,
until in their length, breadth, and thickness they obscured the
rising sun. At short range I have seen the giant money machine
In the course of this book, I shall describe such parts of the
general financial structure as will place my readers, especially
those unfamiliar with its more complicated conditions, in a
mental state to comprehend the methods by which the savings they
think are safely guarded in the banks, trust and insurance
companies, are so manipulated by the votaries of frenzied finance
as to be in constant jeopardy. I shall show them that while the
press, the books, the stump, and our halls of statesmanship are
full to overflowing with the whys, wherefores, and what-nots of
"tariff," "currency," "silver," "gold," and "labor"; while our
market systems are perfected educational machines for
disseminating accurate statistics about the necessaries and
luxuries of life, the water and land carriers, real estate, and
other material things which the people have been taught to
believe are the only things that vitally affect their savings;
that while they imagine they understand the system by which
speculation and investments are controlled and worked, and that
the causes and effects of this system are at all times
get-at-able by them through their bankers and their brokers;
there is a tangible, complicated, yet simple trick of financial
legerdemain, operated twenty-four hours in each day in the year,
and which the press, the politicians, and the statesmen never
touch upon -- a trick by means of which the savings of the people
and the public funds of the Government, are always at the
absolute service and mercy of the votaries of frenzied finance.
Dock -- Sharefin, 09:29:19 07/01/02 Mon
Were you long goldstocks in Dec95 & Jan96?
There was a steady correlation up to this point and then it stopped.
Many who were long were more than surprised at the action of gold.
I am convinced that this was when they started to push the price down in a manipulated manner.
I know as I was very heavilly long & had to reverse out.
The bull market in equities should have finished with a bull run in gold same as in stocks & real estate - asset inflation.
Trouble was the Feds didn't want inflation perceived - so stopped it.
Gold Stocks vs. traditional stocks -- Dock, 09:14:37 07/01/02 Mon
Do not assume there is a correlation between gold and other stock action. I have been in the investment too long and remember too much. In the 1970s there was a long period where gold and the stock market went in opposite directions. Xs marching down the page. Gold up- stocks down, stocks up - gold down. Then for no good reason they started moving in unison. Always remember this,"if it cannot be verified by mathematical formula it is only theory and subject to change".
Gold -- Sharefin, 08:44:38 07/01/02 Mon
This chart shows how gold stocks rise with the general markets, when a rally to a new high was underway.
But the effect stopped in 1996 when the manipulation of gold started.
BUYING Royal Precious Metals Fund -- Gaszap, 08:29:48 07/01/02 Mon
It looks like John opened a can of worms that the Royal Bank would like to quickly close. I'll put my money with John.
FUND MANAGER: John Embry, Vice-President, Canadian Equities, Royal Bank Investment Management Inc.
The gold market remained under a tight hold through September and into early October. As financial concerns grew, the bullion price staged an $8 rally in the latter part of September but the gold faction led by Chase Manhattan Bank immediately brought heavy selling pressure to the market and the strength rapidly evaporated. The good news, if there is any, is that it is becoming more widely accepted that the market is being manipulated by parties with a very strong vested interest in maintaining a gold price below $290 per oz., and preferably lower, to discourage any optimism in the sector. In order for gold prices to rally, it could require some combination of the following factors: continued strength in energy prices which would draw attention to the inflationary forces that are building; further stock market turmoil; a weakening U.S. dollar; and deteriorating conditions in credit markets. There are reasons for concern in all four of the areas at this time and if gold were to become the traditional safe haven it has been in troubled financial times, the potential price action would be amplified this time by the existence of enormous short positions in bullion. We have constructed our portfolio to take advantage of sharply higher gold prices.
Cobra -- Sharefin, 08:27:32 07/01/02 Mon
Thanks for your comments.
Seems a couple of critical weeks ahead & then we'll know which direction the markets are heading.
I'd guess that there's a buy of the century just in front of us.(:-)))
I just don't know how low or how long.
On my gold charts there's a lot of long term trend lines broken.
It was a savage attack with intent & purpose and I'd guess (baring unexpected events) that it will set the gold rally back some time.
And the PPT/ESF seem to have indicated that the are willing to defend certain levels which makes it all the more interesting.
Nothing like a rest before resuming the climb.
There's a long way to go yet.(:-)))
Periodic Ponzi Update PPU -- $hifty, 23:05:37 06/30/02 Sun
Periodic Ponzi Update PPU
Nasdaq 1,463.21 + Dow 9243.26 = 10,706.47 divide by 2 = 5353.235 Ponzi
Up 5.86 from last week
Thanks for the link RossL
The breakout line has been kissed as I expected it would be. -- Cobra, 09:31:24 06/30/02 Sun
I mentioned here several weeks ago that I expected the $310 to $330 area was a long term breakout on the charts and I fully expected the line to be retested. I have watched charts for over 30 years and I have noticed that once a breakout occurs, you almost always have a second chance to
participate. With last Fridays slam on Gold back down to the $313 area,it would now seem to me to be a low risk entry point sometime this coming week and that we will see new highs later this year. I note with interest that Gold Fields, symbol GFI--NYSE----will join the XAU on Monday, July 1st. This is a very positive development I think for those who have long followed the XAU. Nick, your commentary and charts are without a doubt the best in the world. Thanks very much and I know there are many who feel the same way.
Silver -- Sharefin, 06:36:21 06/30/02 Sun
A TIME FOR ACTION
The fundamentals in the silver market continue to be strong. Within the past month or so, both major recognized statistical compilers, CPM Group and Goldfield Mineral Services, confirmed a substantial deficit for 2001 and a larger projected deficit for 2002. Therefore, existing world silver inventories continue to be depleted at a rapid rate, to the lowest documented levels in hundreds of years. Base metals' production has leveled off, due to large inventories of copper, lead and zinc, promising stagnant production for byproduct silver, the largest category of silver mining. Gold production is forecasted to level off and decline, further inhibiting byproduct silver production.
On the demand side, all indicators are flashing green. While stock markets seem shaky, silver industrial demand appears to have bottomed out. Let's face it, if silver has remained in a deficit consumption pattern in an economy that has suffered the blows of the past year, it is likely to remain in deficit for the foreseeable future. As I have written previously, there can be no more bullish state for any commodity than to be in a deficit. In addition, there seems to be a growing realization that the digital photographic revolution will not adversely impact consumption of silver in the foreseeable future. New and unanticipated uses for silver, particularly in health care and bacteria fighting develop almost daily.
Silver investment demand remains strong and recently appears to have accelerated. The Central Fund of Canada, a closed-end mutual fund which holds physical gold and silver, twice this year increased the amount of metal they hold. In all, 6 million ounces of silver have been added to the fund so far this year, approximately doubling their silver holdings from year-end levels. This is silver taken off the market that was not contemplated six months ago.
Gold -- Sharefin, 06:20:00 06/30/02 Sun
Bank retracts gold price-fixing report
The Royal Bank of Canada has issued a retraction after a research report by one of its most senior asset managers appeared to support the claims of conspiracy theorists that central banks have secretly connived to keep the price of gold low.
The eight-page report published as a research note by the investment division of the bank speaks of "increasing evidence of unsustainable gold price manipulation" and says the evidence of secret price fixing is "overwhelming".
The report refers to the practice in the past, when the price of gold was pegged to currencies, of central banks dumping gold to keep the price down. "Today, instead of the overt action of yesteryear, it is covert because the market is allegedly free," the report says.
It goes on to claim that instead of selling physical gold the banks have sold derivatives, called hedging, leaving them owing far more metal than they control and giving them an interest in the price of gold continuing to fall.
"The size of the short position, officially acknowledged to be more than 5,000 tonnes by the bullion bank apologists, is thought to be well over 10,000 tonnes and may exceed 15,000 tonnes," the report adds.
Gold -- Sharefin, 04:20:01 06/30/02 Sun
Gold, Dollars, and Federal Reserve Mischief
America once enjoyed a stable dollar backed by gold deposits, a "gold standard" system. This system gradually was undermined throughout the last century, until President Nixon finally severed the last tenuous links between the dollar and gold in 1971. Since 1971, the Fed has employed a pure fiat money system, meaning government can create money whenever it decrees simply by printing more dollars. The "value" of each newly minted dollar is determined by the faith of the public, the total amount of dollars in circulation (the money supply), and the financial markets. In other words, fiat dollars have no intrinsic value.
What does all of this mean for you and your family? Since your dollars have no intrinsic value, they are subject to currency market fluctuations and ruinous government policies, especially Fed inflationary policies. Every time new dollars are printed and the money supply increases, your income and savings are worth less. Even as you save for retirement, the Fed is working against you. Inflation is nothing more than government counterfeiting by the Fed printing presses. Inflation acts as a hidden tax levied disproportionately on the poor and fixed-income retirees, who find the buying power of their limited dollars steadily diminished. The corporations, bankers, and wealthy Americans suffer far less from this inflation, because they can take advantage of the credit expansion that immediately precedes each new round of currency devaluation.
Brilliant Austrian school of economics scholar Murray Rothbard asked a seemingly complex question in the title of his essay: "What has Government Done to our Money?" The answer turns out to be pretty simple: Government consistently debases our money. How and why it debases our money has everything to do with politics, and nothing to do with the laws of economics.
Fiat -- Sharefin, 03:32:47 06/30/02 Sun
Dollar Nosedives - Euro Nears Parity
Dealers said they were alert to the possibility that the Bank of Japan could buy dollars again as Tokyo remains concerned that yen strength was hurting its exporters. It also intervened earlier this week.
"We took appropriate action in the foreign exchange market today just as the day before yesterday," Haruhiko Kuroda, vice finance minister for international affairs, told Reuters earlier.
The Bank of Japan, which acts as the agent of the Finance Ministry, was detected intervening several times after initially buying dollars around 120.20-120.30 yen in what dealers characterized as heavy intervention.
They said the BoJ could have bought more than $4 billion.
Analysts said the scale of the dollar's fall could now start to bother other central banks who will want to avoid the currency move spilling into other markets.
"It's the speed which is going to bother central bankers," said Parker.
Analysts said there was no possibility that the U.S. Federal Reserve would raise interest rates when its policy making meeting finishes later on Wednesday and it was likely that policy would remain on hold for several more months than previously expected.
Silver -- Sharefin, 10:15:36 06/29/02 Sat
A bill to authorize the Secretary of the Treasury to purchase silver on the open market when the silver stockpile is depleted, to be used to mint coins.
SHORT TITLE(S) AS INTRODUCED:
Support of American Eagle Silver Bullion Program Act
OFFICIAL TITLE AS INTRODUCED:
A bill to authorize the Secretary of the Treasury to purchase silver on the open market when the silver stockpile is depleted, to be used to mint coins.
Gold -- Sharefin, 07:36:28 06/29/02 Sat
Vanguard shuts precious metals mutual fund as assets grow
Mutual fund firm Vanguard Group said on Friday it would close its hot-performing gold fund to new investments because its assets have ballooned so rapidly.
"The fund's strong performance against the backdrop of weak stock market returns has attracted substantial cash inflows, which has raised our concerns about investor time horizons and expectations," Vanguard Chairman John J. Brennan said.
The Vanguard Precious Metals fund (VGMPX), which had $628 million in assets at the end of May, is up about 33.2 percent this year as gold-mining stocks have prospered amid the broad market slump, according to data from research firm Morningstar Inc.
Valley Forge, Pa.-based Vanguard blocked all new investment in the fund -- even from current shareholders -- as of Friday.
Mutual funds often close their doors to new investors when assets climb sharply and fund managers worry they can't put all of the new money to work in the stock market. Investors poured about $124 million in new cash into the fund in the first five months of the year, compared with only $400,000 in net new cash for all of 2001, Vanguard said.
Gold -- Sharefin, 07:31:56 06/29/02 Sat
Lonmin comes to Ashanti's aid at 11th hour
Gold -- Sharefin, 07:30:50 06/29/02 Sat
Gold Fields Welcomes Anglo American Upping Stake To 20%
Gold -- Sharefin, 07:25:59 06/29/02 Sat
Gold hit by cenbank intervention on dollar
Gold was pushed onto the back foot on Friday after surprise intervention by central banks to prop up the ailing dollar against the euro and yen dented European demand for bullion and encouraged funds back into equity markets.
"The intervention triggered selling," said one London-based trader.
The dollar surged against the yen and euro after the U.S. Federal Reserve and the European Central Bank intervened in the market on behalf of the Bank of Japan which sent dollar-euro from 99.30 cents to 98.55 cents and fuelled gains in Wall Street stocks, already buoyed by an upbeat consumer report.
Gold -- Sharefin, 07:24:13 06/29/02 Sat
Gold Dn $5.70 In Late Tumble
Bank Selling Triggers Sell Orders Late In Session -- Prices Bounce Off $30-day Lows Before $313.90 Settlement -- Dealers Hope Fall Washed Out Weak Longs, To Prompt More Buying -- Silver Closes Before Gold Slide, Uncertain Outlook For Monday
Comex Aug gold futures briefly tumbled to 30-day lows of $310.50 per ounce in thin trade late Friday before bouncing back to the $313.90 area by settlement, down $5.70 on the day.
Persistent investment bank selling amid low volume trade triggered resting sell orders just below the $315 level within the last 10 minutes of trading, washing Aug sharply lower to $310.50 before a let-up in the selling pressure combined with light short covering and consumer buying sent Aug back towards the $315 area by the end of the session.
Dealers noted that steady bank selling had hampered gold throughout the week and denied bullion much in the way of an extended positive response to the flagging equity markets and U.S. dollar throughout the week.
Gold -- Sharefin, 07:19:00 06/29/02 Sat
Commodities - Gold plummets
At the COMEX, central bank intervention to prop up the dollar pulled the rug out from under the gold market on Friday and sent prices a six-week low.
August gold closed $5.70 lower at $313.90 an ounce.
Estimated volume was a busy 45,000 contracts, almost half of which came in the last few minutes of trade.
"It took out $316 with stops below that level and just hammered the market on those stops," said David Meger, analyst at Alaron Trading in Chicago. "$Three hundred ten was the obvious point of the movement but when we said that we weren't expecting to get that in the next three minutes."
The dollar was firm against the yen after the Bank of Japan led Friday's currency market intervention to prevent a rising yen from choking off Japan's export-led recovery. The greenback failed to stay up against the euro, but still ended above the 28-month low hit at $0.9990 per euro in the morning.
A weak dollar increases the buying power of overseas investors for dollar-denominated metals like gold.
Gold -- Sharefin, 07:15:05 06/29/02 Sat
Kondratieff Wave Cycles
The Winter of the K-wave is a dangerous period. But it will be eased for those holding gold or gold stocks. That new bull market is still in its infancy and may yet face a significant shakeout to make its final bottom. But we would all be wise to hold at least a little gold. The winter of the K-wave is upon us.
Gold -- Sharefin, 07:14:03 06/29/02 Sat
The sun rises on the yellow metal
My longer term view, beyond the immediate objective at $420 is that gold is about to enter into a bull market of unprecedented proportions. I believe the rate of increase will steadily accelerate in a parabolic curve which will culminate in a steep vertical “blowoff” move which is the way many speculate stampedes end, such as happened with the NASDAQ mania. Where will it end? $2000 is, to me, not an unreasonable figure, although I admit that this is an educated guess and it may well go much higher. Think I’m crazy? Firstly, this is not such a large rise, proportionately, as happened in the 70’s. Secondly, the amount of liquid, speculative cash sloshing around these days dwarfs that available in the 70’s.
The underlying reason for the emerging bull market is clear and simple to grasp. Many of the world’s leading currencies have been thoroughly debased. Without the anchor of a Gold Standard, banks and governments have been a law unto themselves as far as currencies are concerned and accountable to nobody. Greed, corruption, egotism, short term-ism and good old fashioned human stupidity have wrought havoc and, especially in recent years, those responsible for the deepening mess have sought to disguise their culpability with an ever denser thicket of intrigue. The intensifying financial crisis will have one eventual, inevitable result - money will once again be underpinned by real value.
One final thought that will especially appeal to people with a black sense of humour; while the United States is about to be economically “tarred and feathered” for its hubris in acting, for many years now, as though it is somehow above and beyond the normal laws of economics and finance, poor old Russia, derided for years as an economic basket case and the butt of countless jokes, has quietly introduced some gold coinage into circulation thus starting to underpin its currency with a REAL store of value. So Russia shows the way forward - funny how things can change, isn’t it?
Gold -- Sharefin, 07:12:23 06/29/02 Sat
Gold -- Sharefin, 01:41:01 06/29/02 Sat
Yet again another global gold indice is removed.
As of 21st of June the JGOL has been removed.
Yahoo have stopped publishing data on the series - Click here
Same with Sharenet where the index was classified as IX14
Upon reading this pdf document it becomes clear that the FTSE is now running JSE/SA indices.
Find out more here.
Like with the Australian & Canadian indices when SP Global took them over so to now with the South African indices.
So that now makes three of the major global gold indices that have been cancelled within the last few months.
It almost appears as though TPTB don't want investors to know how the gold markets are going.
Almost a conspiracy.
Fiat -- Sharefin, 23:51:50 06/28/02 Fri
Gold -- Sharefin, 23:50:03 06/28/02 Fri
The Supply-Side Gold Standard: A Critique
Fiat -- Sharefin, 23:27:16 06/28/02 Fri
O'Neill says govt faced using 'fraudulent' measures if debt limit not raised
"If it had not been increased, it would have put we in the Treasury in the position where we would have had to make a choice between defaulting (on debt payments) or... using shaky, I might even say potentially fraudulent, accounting devices to paper over a lack of action by the Congress," O'Neill told reporters.
"I'm very pleased we didn't reach that point, because... I do not think we in the Treasury should put ourselves in the position of where we could be accused... of following the horrendous accounting policies and practices that have come to the surface in private companies in recent months," he added.
Gold -- Sharefin, 23:25:08 06/28/02 Fri
COMEX gold drops as central banks intervene on dlr
Central bank intervention to prop up the dollar pulled the rug out from under COMEX gold on Friday, upending early gains and sending futures to a six-week low as bulls turned tail en masse.
Gold was also a victim of investor outflows back into the stock market. The Dow Jones industrial average was up 53 points in the afternoon, despite news that Xerox Corp. would restate five years of results to reclassify more than $6 billion in revenues in the second accounting debacle absorbed by Wall Street this week.
"We rallied because of the strength of the euro based on the Xerox situation -- and there are a few other things that make people feel there's no loss of confidence in U.S. equities due to all this thievery going on," said a floor broker. "Then intervention drove the dollar higher and that in turn drove gold lower."
Fiat -- Sharefin, 23:22:37 06/28/02 Fri
Bank of England warns of risks
The Bank of England has warned that there are potential risks to the UK financial system from the continued fall in share prices following a series of corporate scandals in the United States.
Gold -- Sharefin, 21:20:18 06/28/02 Fri
Why gold was hammered lower...^o-o^...pure manipulation & market control....^o-o^
With global sharemarkets plummeting & the US Dollar failing there was every chance that gold would have broken to new highs above $330.
This they didn't want so they took the obvious choice.
Hammer gold lower & break the uptrend in place.
First look at this picture:
Then look at the US Charts shown here:
Globally all the markets indices across the world were plummeting fast, fear was entering the market place and it was likely that the markets would fall hard & gold would rise strong.
This would have caused gold to break past $330 and move up on a new leg to new highs.
This they could not afford to happen.
The point at where this manipulation began to happen was when the US Dollar was plummeting & the price of gold stopped rising - after the last G8 meeting last weekend.
It can readily be seen here in the following two charts.
And you can see how they've broken the uptrend in gold.
US Dollar Index
A week ago gold was moving back up to test new highs whilst the US Dollar was falling fast.
Global sharemarkets were falling hard & the news of WorldCom hit the markets.
What happened at the G8 meeting over the weekend - what agendas were discussed?
All this week the markets rallied - the US Dollar got hammered & Gold got hammered!
Why was this point in time so necessary to defend these markets?
Well here's my version of the story & why they (the PPT/ESF) chose to act as they did.
Timewise the global sharemarkets are almost at a cyclical bottom - almost.
Have a look at this chart of the DJIA and you can see how the cycles are of a multi-month nature.
Then take a look at my Swing chart (which measures the internal beat of the US Markets)
It's clearly visible that the downtrend in the swing is almost at an end.
One more sharp drop down and the cycle would finish and this would tie in with the cycle of the Dow & the rest of the global markets.
So here we are poised with the markets falling into their cyclical low - almost.
The US Dollar plummeting and gold about to take out it's old highs at $330.
Note the bottom of the Swing cycles normally occur with a sellout bottom - where fear has fools dumping stocks & panicking.
Now the Governments, Central Banks & Bullion Banks don't want gold breaking it's old highs just as the markets are spooking & investors reacting panicky.
The couldn't afford to see gold jump $20 to $30 higher whilst the sharemarkets dropped 10% to their cycle low.
Not now, not with the end of the multi-month sharemarket cycle mere days away from completion.
So they deliberately knock the price of gold back down & down hard.
They need to stop the markets panicking and the move of serious money into gold.
The buying is evident in that each time the price plummets it quickly retraces much of it's fall.
In other words they have to seriously sell the price down - to dump it hard - sell sell sell.
This selling can clearly be seen in these charts of the gold price.
And at the same time get the global markets to jump higher & sharply to act as though the cycle bottom is in and the last cycle finished.
By doing the above over the last week they have almost assured themselves that the sharemarkets will now put in a relief bear market rally.
That this rally should last for some months - the average appears around 6 months.
Remember that they managed to extend the last rally out to 10 months.
This rally would theoretically take the pressures off the share markets falling, the dollar falling & gold rising for quite some time.
The intent of this weeks moves are to deliberately make sure gold doesn't go to new highs and to put that threat on the back burner for some months.
Be it that we get the bear market rally in stocks then the US Dollar will regain some of it power and they will use this opportunity to squash gold back even further.
So here we have motive & manipulation - perpetuated by the very same market makers & government who are currently blaming others for manipulating stocks & company accounts!!!!
The transparency of the market makers & their manipulations is becoming so blatant that many must wonder about these American markets and who is playing who for a fool.
The real test is yet ahead of us in that will Mr. Market accept that a low is in place and the bear market rally is real or will a new bout of selling soon enter the fray again.
Be it that the selling continues & the US Dollar keeps on being sold off, then one would presume that the price of gold will once again pick up it's head.
But rest assured by the recent action that the market makers - PPT/ESF & Bullion Banks will do all in their powers to suppress the price of gold.
This gold war has only just begun....^o-o^....
Fiat -- Sharefin, 17:58:39 06/28/02 Fri
Phony earnings, inflated revenues, conflicted Wall Street analysts, directors asleep at the switch--this isn't just a few bad apples we're talking about here. This, my friends, is a systemic breakdown. Nearly every known check on corporate behavior--moral, regulatory, you name it--fell by the wayside, replaced by the stupendous greed that marked the end of the bubble. And that has created a crisis of investor confidence the likes of which hasn't been seen since--well, since the Great Depression.
Fiat -- Sharefin, 17:28:58 06/28/02 Fri
Soros Foresees Further Erosion in Value of U.S. Dollar, Equities
George Soros said he wouldn't be surprised if the dollar loses a third of its value during the next several years.
The billionaire philanthropist and financier said stock markets "could go much lower," too, if the U.S. quickly slips back into recession -- something he still hopes can be avoided. Citing his own books, lectures and articles, he also outlined steps that he said could prevent what he calls "the Bush bear market" from turning into a global economic crisis.
After years of rising against other major currencies, "it seems that the trend in the dollar has been reversed," Mr. Soros said. Against the euro, the dollar has fallen about 10% so far this year. Trends in currency markets tend to last several years and involve major swings, he said, so a drop of around a third in the dollar's value from recent levels "would not be unprecedented."
Investors outside of the U.S. have been rattled by news of corporate excesses and accounting scandals that led to the collapse of Enron Corp. and fraud charges against WorldCom Inc. (NasdaqNM: WCOM - News) , Mr. Soros noted. Making things worse, he argued, is "the apparent unconcern" of the Bush administration, which he said has shown "no particular desire to do too much about" those excesses. Partly as a result, he said, "the savers of the world have lost confidence" in the Bush administration's management of the global U.S. economy and are withdrawing their funds from the U.S.
The dollar's fall, in turn, has "some very negative implications" for the world economy, Mr. Soros said. Among them, he said, is the danger that it will frighten U.S. consumers.
In recent years, free spending by Americans has kept the world economy humming. If they take fright and slash their spending, the fragile U.S. economic recovery could reverse itself, sending the country into a "double-dip" recession, "and the stock market could go much lower," he said.
Fiat -- Sharefin, 17:24:19 06/28/02 Fri
Soros Blames 'Bush Factor' for Dollar's Fall
Billionaire investor George Soros on Thursday blamed President Bush and his team for the fall in the U.S. dollar and declared: "The international financial system is coming apart at the seams."
"I think we're in fairly serious trouble. I do think we're in a crisis situation," said the Hungarian-born hedge fund king-turned-philanthropist in a speech to the London Business School on Thursday evening.
"We have the Latin American crisis and we have the declining U.S. dollar, which means that the motor of the global economy is basically switched off," said Soros.
"There is a lack of confidence. That's what I call the 'Bush factor' in the economy," said the 72-year-old speculator.
"What worries me is that there doesn't seem to be any great desire on part of the authorities to do much. There is still a belief, particularly in the United States, that the financial markets will correct themselves. But markets cannot be left on their own. You need to correct them," said Soros.
But Soros said: "The claim that markets are always right is a false claim. What's true is that markets are often wrong, therefore you need intervention by central banks."
Soros said the "Bush factor" was to blame for a flight to liquidity in financial markets. "Everyone's going home. The Swiss banks are going home. The strengthening of the yen also clearly shows repatriation," he said.
"The markets are looking for leadership. Stock markets would take heart from intervention by the United States because it would show that there's somebody at home," he said.
Soros declined to comment when asked by Reuters about the outlook for the ailing U.S. currency and U.S. assets.
He said the global economic downturn had exposed the weaknesses of corporate America and how the U.S. administration runs the international economic system.
He said that the collapse of U.S. oil trader Enron Corp. and the accounting scandal at WorldCom were to a large extent a "natural fallout" from the economic boom-and-bust cycle following the bull market of the 1990s and the ensuing burst.
"But the decline in the markets have gone somewhat further than what would be the natural consequences of the previous exuberance," Soros said.
"What is not the natural consequence of that boom and bust cycle is the decline in the U.S. dollar. If things had gone according to plan, the dollar ought to have been quite strong."
Gold -- Sharefin, 17:21:47 06/28/02 Fri
Placer Dome Looks To Be The Only Realistic Contender For Hedgebound AurionGold
So far, so dull. The problem now facing both companies is that analysts are taking a very close look at their hedge books. In Australia, the land of the great hedge, such inquisitiveness has never been welcomed by company directors and woe betide any analysts or journalists who start to get too close to the truth. At the end of last December the mark- to- market value of Delta's hedge book was a negative A$287.5 million and when the Delta Gold assets were included in shareholders funds post the merger with Goldfields a provision of A$233.9 million had to be made.
A very interesting article has been written by Harry Schultz, the well known publisher of an influential investment report in North America and James Sinclair, chairman of Sutton Resources which discovered the huge Bulyanhulu gold deposit in Tanzania before being taken over by Barrick Gold. Apart from pointing out that hedgers always seem mesmerised by their positions and sit on them however hard the going gets - remember Ashanti? - they contend that it is a fallacy for hedgers to claim that they cannot lose if they have only hedged 10 per cent of their total gold reserves as any loss will be offset by the other 90 per cent which will grow in value if gold is advancing. The integrity of all such deals depends on how the producer can satisfy the counter party if push comes to shove. A hefty cash balance is one answer; annual production is the other. Simple as that. So according to the two authors the true measure of financial integrity is how many years of actual production a company has hedged.
Bearing this in mind it is interesting to note that the annual production from the enlarged Placer group - assuming the bid succeeds - would be 3.8 million ounces of gold a year. But the combined hedge books would cover almost 20 million ounces of production of which 8.4 million ounces is in forward sales, 5.9 in bought puts, and 5.4 million in sold calls. According to analysts in Australia this amounts to 40 per cent of the merged reserves which top 50 million ounces, but the forward sales alone amount to well over two years production and this is the danger point.
Gold -- Sharefin, 20:13:45 06/27/02 Thu
Gold Manipulation Intraday Charts
Gold market observers in Europe joke about it by saying: 'Good Morning America!' or 'You can set your watch by it'. What happens when New York wakes up? Generally, the price of gold falls. This intraday price pattern is the result of a price manipulation that takes place in America. That is why the price so often falls when New York trading starts.
Many market participants are now aware of this price pattern. They can see it directly from the quotes or from intraday-charts. Kitco (www.kitco.com) offers such intraday-charts, including historical ones. But these are only isolated examples.
If we take many examples over a lengthy period and then build an average, we can generalize such individual cases. To do so, we take minutely quoted FOREX data over the last five years from Disk Trading ( http://disktrading.is99.com ). From them we compute the average intraday price change. The following chart thus depicts the average intraday trend in the gold price over the last few years.
Gold -- Sharefin, 19:41:41 06/27/02 Thu
Gold, base metals dance to US markets' tune
Gyrations in U.S. shares and knock-on effects on the dollar provided the driving force for Europe's precious and base metals markets on Thursday, but sent them spinning in opposite directions as gold lost its allure as a safe-haven asset and industrial metals such as copper and aluminium attracted fresh buying.
Turbulent U.S. shares were settled by surprisingly upbeat data on U.S. economic growth and jobless claims after Wall Street was left reeling on Wednesday in the wake of disclosures by U.S. telecoms company WorldCom Inc (WCOM). of nearly $4 billion in improperly booked expenses.
Gold -- Sharefin, 19:31:18 06/27/02 Thu
Gold trades the inverse of US stocks ending lower
Gold -- Sharefin, 19:25:27 06/27/02 Thu
Gold provides stability in an unstable market
8 Minute Audio report on the gold market.
Gold -- Sharefin, 19:20:43 06/27/02 Thu
Gold Is Losing Its Glitter
The Fed leaves rates at a 40-year low, equities plummet toward new three-year extremes, and the stench of corporate malfeasance worsens.
So what happens to gold, the inflation antidote and safe haven safety valve? The August contract) erased every cent of an early $4 gain on Wednesday, and then mustered only a 10-cent gain by the close. And the December contract fared even worse, closing underwater by 30 cents. So much for the appeal of the metal as an alternative investment.
Gold -- Sharefin, 19:17:26 06/27/02 Thu
COMEX gold falls as stocks shake off WorldCom woes
Gold succumbed to profit taking Thursday, as investors lightened safe-haven holdings and brushed the dust off after Wednesday's Wall Street-rattling WorldCom bombshell, dealers said.
Stronger-than-expected data on first-quarter economic growth helped calm nervousness that another Enron-like corporate accounting scandal could undermine confidence in U.S. business and derail the fragile economic recovery.
"The equities rallied, so that obviously inhibited the gold market from the highs yesterday (which were) pretty much made in concert with the lows in the equity market," said Greg Weldon, a consulting analyst for Prudential Securities.
"I think going forward the dollar has further to depreciate and gold has further to appreciate," said Weldon. "The questions are, is Fed going to be viewed as responsive? Or is stock market going to be viewed as having bottomed? The latter is kind of out of the question unless the former is true."
A weak greenback enhances the buying power of European investors for dollar-priced commodities and -- combined with stock market uncertainty and geopolitical instability -- was a catalyst for gold's rally to 2-1/2-year highs above $330 an ounce three weeks ago.
"Is the cup half full or half empty?" mused a bullion dealer. "The people who have been liquidating long positions are happy to take profits in an environment where it's easy to sell gold -- the environment being a relatively weak stock market and certainly a weak dollar."
But a huge long position on the COMEX is giving the market indigestion.
"Some of the longer-term guys have actually taken profits here and they're the people who have passed the gold on to people who are currently hanging on to it," said the dealer.
Gold -- Sharefin, 19:15:03 06/27/02 Thu
Gold exposure increases value in Randgold threefold
Gold -- Sharefin, 19:12:13 06/27/02 Thu
Central Bank gold reserves gain $600m from June 14 to 21
The Central Bank's gold reserves amounted to $43.1bn as of June 21, 2002, the public relations department of the Central Bank reported. On June 14, 2002 the volume of gold reserves was $42.5bn.
Lenny Kaplan -- Sharefin, 19:10:57 06/27/02 Thu
Over the past several days, the gold and silver markets have pledged fealty to a new master, the US stock market. The gold and silver markets, once influenced primarily by the foreign exchange markets and the levels of fear now abundant in the global economic and political scene, have renounced their former relationship and have sworn a new allegiance. Well, given the premise that this certainly LOOKED like an excellent idea, given the most recent scandal from WorldCom, and the almost certain prospect that the stock market would fall and gold could rise as a result. Ah, but the perversity of the markets prevailed. Beyond all logic and beyond all belief, the US stock markets rallied despite the news that yet another US firm, aided by audits from Arthur Andersen, had defrauded hundreds of thousands of investors, is putting 20,000+ employees out in the street, and the pensions of tens of thousands of employees are now rendered worthless.
Silver -- Sharefin, 18:59:59 06/27/02 Thu
US Government To Start To Buy Silver:
Excellent 4 page article on silver & buying it.
Manipulators -- Giovanni Dioro, 13:48:21 06/27/02 Thu
With Worldcom's disclosure that it had overstated income by several Billion dollars yesterday, it becomes more obvious that the game is rigged. To see markets rally and metals fall on such news is outright absurd and portends to the manipulation that is so much in vogue in the Clinton and post-Clinton era.
The japanese admit that they are manipulating the currency so that the the dollar doesn't fall too much compared to the yen. Hong Kong admitting to manipulating its bourse in face of market declines. Does anyone doubt that the game is rigged in amerika as well.
Option writers and international banksters, who are often one in the same, will stop at nothing to rip off the gullible and the naive. People cower in fear as their savings goes out the window, and they stupidly don't know what happened to it, who stole it, and was it really there in the first place.
Worldcom was valued at $160 Billion dollars just a few years ago. Anyone who bought the book "A random walk down wall street", and its storyline that stocks are always fairly valued, should find the author and kick him hard.
Oh equity holders, 'tis time to cash in your chips, whatever is left, and to find greener pastures. The markets are rigged. Don't play their game.
Gold -- Sharefin, 07:27:27 06/27/02 Thu
Late rallies rouse suspicions
These days, violent market reversals are really making everyone queasy - even when they finish with a closing rally, like Wednesday and Monday.
Tuesday's closing triple-digit Dow loss, coming after a triple-digit gain earlier in the day, claimed a notable victim in investment letterland: TheDowTheory.com's Jack Schanepp, who announced the action constituted a Dow Theory sell signal.
"I can't help but wonder when the Euro was falling out of bed a year ago if some sort of agreement was reached between the central bankers to bring the Euro up and the dollar down in order to reach a parity between the two currencies. Certainly trade balances had grown all out of whack as we saw even with yesterday's trade report. We are now reaching this parity... the dollar is plunging fast and panic selling is overtaking the markets. When fear and pain get too severe as we are seeing now, the central bankers are more likely to take some action to stabilize things. This isn't because they care about how much pain you are suffering, but rather plunging markets become far more unruly to manage and more expensive to stabilize, the more panicky it becomes...We are beginning to feel an ominous threat to the markets (and I believe world markets too) if these critical supports are violated at the September lows. You can be sure the central bankers are very aware of this threat."
And one letter who does post his daily comments immediately - Dow Theory Letter's http://www.dowtheoryletters.com/ Richard Russell - included a long attachment about a leaked Royal Bank of Canada report which appears to be the first financial establishment endorsement of the thesis, long and vigorously argued by Billy Murphy's LeMetropole Café http://www.lemetropolecafe.com/ website, that the gold price is being held down to mask gathering financial instability.
Gold's early rally certainly got squashed Wednesday -- paradoxically in view of the weak dollar.
Russell isn't worried -- he expects gold to trade some multiples higher eventually. He's speculated about stock market manipulation in the past. But yesterday, as the leading bearish Dow Theorists at the age of 78, he was savoring what looks like the rout of his younger rivals.
Gold -- Sharefin, 07:19:38 06/27/02 Thu
1.7 million ounces off AngloGold hedge
AngloGold is expected once again to have delivered more than 100 percent of its production for the June quarter into its hedge book. Analysts estimate the group's hedge book will be trimmed by another 1.7 million ounces for the three months to June, bringing its total hedge position down to around 11.2 million ounces.
During the previous quarter, AngloGold continued its strategy of aggressive hedge book restructuring, delivering 1.7 million ounces - or 120 percent of its production of around 1.35 million for the quarter - into its books. It is expected to announce a similar step for the June quarter, when its reports its results, scheduled for July 31.
The true extent of AngloGold's hedge restructuring, aimed at increasing its exposure to the spot price of gold, is evident after a brief look at the massive drop-off in its forward positions over the past three years. Edwards points out that in December 2000, AngloGold's hedge position was at a hefty 17.8 million ounces, or 20 percent of its proven and probable reserves.
But the picture has changed since 2000. At the end of this quarter, the hedge book will be at around 11.2 million ounces or 17 percent of reserves, a dramatic change considering this proportion is calculated after the sale of the Free State assets and the Elandsrand and Deelkraal mines, as well as the imminent upgrade of its reserves.
Fiat -- Sharefin, 21:11:05 06/26/02 Wed
USAGold Daily Comments
The major story today of course is not necessarily gold. The major story is the extreme volatility that we have seen the world’s equities markets following the announcement of what appears to be the largest corporate fraud ever - bigger than Enron. This story is certain to dominate the financial media headlines for months. Consumer confidence is certain to suffer greatly as lately there have been corporate scandals each and every day. The US dollar was sharply lower against the euro and the yen in heavy trade on Wednesday, with US equities markets testing September's lows after WorldCom, the telecoms operator, unveiled an apparent $3.8bn corporate fraud. WorldCom, the stricken US telecommunications group, on Tuesday asked its chief financial officer Scott Sullivan to resign after uncovering what appeared to be a $3.8bn fraud. The announcement dealt a further blow on confidence in US assets, already battered by corporate scandals such as Enron's collapse. This should wake up many investors to the very real possibility that there could be many more Enron’s and WorldCom’s lurking about. Curiously WorldCom’s auditor until fairly recently was none other than Arthur Andersen. Obviously this will give many investors pause to consider hard assets like gold and silver. Tom Hougaard, trader at financial bookmakers City Index, said the London market faced "a very scary day. "The losses amongst pension funds and portfolio managers will be huge and the whole Enronitis wound has been ripped right open once again," he said.
The current volatility in the equities markets is primarily due to a loss of consumer confidence following a daily parade of corporate scandals. Investors are right to be concerned as they wonder who is looking out for their interests. Certainly the Board of Directors at many corporations have failed in their obligations to look out for the shareholders interests and keep a tight reign on executives excesses. Much of the time the directors and corporate executives appear to be in bed together. The result has been a recent lack of investor participation in the stock markets. Many have decided to forgo stock investing altogether and instead dabble in real estate. Eventually many of these discouraged investors will seek out other alternatives such as precious metals to wait out the litany of scandals that continue to come light. It has not gone unnoticed how strangely the markets have been reacting to such news as the WorldCom and ImClone scandals. The USD index has strengthened and the U.S. market indices have strongly recovered in late day trading suggesting that there may be some “curious” intervention behind the scenes. This “intervention” is not likely to be sustainable long term without investor participation.
Gold -- Sharefin, 21:06:11 06/26/02 Wed
Gold fails to capitalize on weak US dollar
Gold futures failed ,to close with gains of any real significance on Wednesday as futures spent most of the session eating away at opening gains. Gold prices popped sharply higher this morning with the market supported by a sharply lower US dollar and a weak US stock market. However, despite these losses in both stocks and equities gold's perfor performance was a little lackluster with the market finding that bank selling limited upside gains. Then as the US session progressed and stocks found the ability to climb up off lows gold began to weaken further.Traders noted that there was some disappointment in the market at gold's reluctance to add more value on the day given the extend of dollar and stock market losses. Some noted that this may spell some caution for gold's overall bullish bias. However, most expected that with further decline sin the dollar gold would eventually capitalize.
Rather gold is not being allowed to rise as it's buried under all the fiat gold this world is awash with.
Gold -- Sharefin, 21:03:07 06/26/02 Wed
South Africa poised to take over mining rights
Attempts are being made to end the legacy of apartheid in the mineral industry
SOUTH AFRICA’S multibillion-pound mining industry was yesterday bracing itself for the biggest shake-up since the discovery of gold and diamonds in the 19th century.
Under landmark legislation designed to boost black participation in the predominantly white-owned mining industry, private ownership of all mineral rights is to be abolished outright, and title transferred to the State.
Gold -- Sharefin, 21:01:59 06/26/02 Wed
Europe central banks seen extending gold sale pact
European central banks are likely to extend the pact limiting their gold sales when the current deal expires in 2004 but the gold market looks so firm that they might agree to sell a little more, analysts said.
The deal by 15 leading European central banks in 1999 to cap sales of bullion from their official reserves has helped to lift the world gold price away from its lowest level in two decades.
Fears the agreement could unravel and even unleash a glut of gold into the market have dampened enthusiasm among some bulls.
But analysts said the deal, known as the Washington Agreement, was likely to be extended to provide a further prop to prices which this month hit $330 an ounce, its highest level in more than 2-1/2 years.
"We've heard from a number of central banks in the last couple of years that they see the agreement as a very appropriate way to manage gold sales. So it's very likely to be renewed," said John Reade, metals analyst at UBS Warburg.
Ross Norman, analyst at TheBullionDesk.Com said that, as gold producers were showing greater discipline in limiting fresh supply, an increase of up to 600 tonnes was possible.
"If the amount (currently 400 tonnes) is not increased, we will see a fairly significant spike in the gold price. But if they set it at 600 tonnes, then the likely impact would not kill the current gold rally," he said.
Gold -- Sharefin, 20:56:42 06/26/02 Wed
Gabelli fund shuns the yellow approach to the yellow metal
The Gabelli gold fund shone in the first quarter of2002, returning 45.4 per cent as the rising gold price underpinned the fund's strongest quarterly performance since its inception in 1994.
Caesar Bryan, who started the fund shortly after gold's last big rally in 1993, believes further gains are in store for both the yellow metal and gold equities and is looking closely at companies which might benefit. Gold has recently soared to four-and-a-half year highs of $330 an ounce and has held on to most of those gains.
"Gold stocks have had a hell of a run, but they are still cheap and if gold gets back to $350 to $400 an ounce, the Philadelphia Gold and Silver Index should almost double," says Mr Bryan.
Mr Bryan invests globally, with an emphasis on pure gold producers. The primary focus is on cost per ounce of production, and on the cost of recoverable reserve.
"If you have a high cost mine, or if you have financial leverage you need more hedging and that is unattractive," said Mr Bryan.
"Investors in a no-load gold fund are expecting to get a play on gold, so I tend to be very exposed to the gold price," he said.
Mr Bryan argues that investors putting money into companies with high levels of hedging may just as well own bullion, if they are going to benefit from high gold prices.
"If a company says we don't believe in the gold price and they hedge all its reserves, that takes the option premium out of the equity price," he said.
Gold -- Sharefin, 20:52:31 06/26/02 Wed
Gold rises on accounting scandal
Gold has rallied after investors spooked by wilting equity markets and a sickly dollar in the wake of the WorldCom accounting scandal sought out a safe-haven asset in times of trouble.
Gold -- Sharefin, 20:47:41 06/26/02 Wed
Gold market relaxes to investors
China will relax limitations for Sino- foreign co-operation in the technology, equipment, capital and human resources areas of gold exploration, smelting and processing, as part of its opening up of the gold industry.
Gold -- Sharefin, 20:45:16 06/26/02 Wed
Gold soars as investors play safe in perilous times
Five hundred years ago Sir Thomas Moore expressed the wonderment "that gold, which in itself is so useless a thing, should be everywhere so much esteemed".
Gold has few industrial uses but everywhere it is still esteemed in this modern age - by those who wear gold watches and chains but even more so by central bankers.
Bank vaults all over the world are stacked high with gold bars the size of building bricks, which taken together account for one- third of all the gold ever mined. Fort Knox in Kentucky holds most of the United States's 8,149 tonnes of gold in vaults lined with granite, steel and concrete, accounting for 60 per cent of the country's reserves.
Only Germany comes close with 3,448 tonnes, followed by the International Monetary Fund with 3,217 tonnes stashed away to underwrite its loans.
Hmmmmmm!!!!.... I wonder how much of the above counted gold actually resides in those vaulted vaults.
Time for a recount - minus the outstanding derivatives......
Gold -- Sharefin, 20:38:46 06/26/02 Wed
Gold miners shine in troubled market
In a stock market darkened by a troubled economy and accounting scandals, one investment still shines: gold shares.
The S&P Gold Index (^SPGOLD - News), which includes North America's largest gold producers, has been the best sector performer this year, and the rally is not going to end any time soon, say money managers.
Gold prices have been on a bull run this year amid concerns over financial irregularities in Corporate America, a slumping U.S. dollar, and tension in the Middle East. This has made gold miners one of the few safe havens in a troubled equity market.
"Given the current political and economical turmoil, gold is not going back to its old lows any time soon."
Like oil companies, which benefit from rising oil prices, gold companies rally on stronger gold prices. Shares in gold miners have on average over the past decade risen 3 percent to 4 percent for each 1 percent rise in gold prices, said Michael Dudas, an analyst at Bear Stearns.
But the industry is not winning by default, having gone through a period of rapid consolidation. Inefficient mines have been closed and companies are now more disciplined with spending. With the fundamentals in the sector -- strong demand and limited supplies -- still solid, shares in gold companies are a buying opportunity at these prices, said analysts.
"You want to buy the dips aggressively because of the strong fundamentals. Gold stocks have good moves to the upside and you want to be overweight here," said Dudas.
LEVERAGED FOR GROWTH
Investors will best profit from a rally in gold prices by holding stakes in miners that have not hedged future sales and those with mines that are profitable now that bullion is near three-year highs.
"Considering how fast and furious gold has moved this year, the recent correction out of gold stocks last week was not surprising," said Brian Christie, an analyst at Toronto-based Canaccord Capital.
"But the problem is there are no other places for this hot money to go to. Gold is still the place to be."
Fiat -- Sharefin, 20:30:37 06/26/02 Wed
Dollar slides to brink of free fall
Worldcom scandal: Currencies: Latest Wall Street disaster sends investors all over the world running for cover.
The US dollar yesterday moved to the brink of free fall a nightmare scenario for the world economy after reverberations from the WorldCom scandal triggered panic among investors.
The currency came within a whisker of parity with the euro and crashed through key psychological barriers against the yen and the pound as investors rushed to dump dollar assets.
"This is threatening to become a disorderly market," David Bloom, global economist at HSBC, said. "There's no better way to show a loss of confidence in a country than through its currency."
Mark Cliffe, a global economist at ING Financial Markets, said: "If the dollar's decline turns explosive, this could compound the problems of the US asset markets as currency losses raise fears of a massive capital flight out of the US."
Gold -- Sharefin, 07:36:11 06/26/02 Wed
The National Investor - Market Commentary
GOLD: Over the last few trading sessions since bottoming in the $316-318
area, gold has gyrated rather sharply compared to its methodical (and almost
boring) ascent this year. On a few occasions, we've seen it swing $6-8 per
ounce in one day; generally, the yellow metal has moved down when the dollar
and stocks have mounted brief rallies, and has moved up (as it did nicely
yesterday afternoon) when those rallies have fizzled.
As I mentioned above, foreign trading overnight has pushed gold up nearly
$5.00 per ounce beyond yesterday's close. The dollar has been hammered
anew, especially against the yen, breaking as we slept below the 120 yen
level. If all this keeps up for much longer, gold will no doubt mount a
challenge at breaking above its highs of a few weeks ago, on its way to the
As I wrote in May's late issue, the fundamental, supply/demand case for
gold is not sufficiently understood as what started this whole bull market
out. Now, the talk all centers around the weak dollar, foreign fears and
the overall lousy stock market environment. Thus, if we do get to the point
where a wash-out on Wall Street brings about a sustained stock rally, it's
likely that gold will come back down some. Depending on how all this takes
shape, I may later suggest--as I did several weeks back--that you lighten up
some. Make no mistake, however--the bull market is still in tact.
RBC "LEAK": You know gold is gaining much more attention when it can be
talked about in some "offbeat" ways in the press. Recently, as many of you
may have heard, Treasury Secretary Paul O'Neill commented on gold as one of
the items that al Qaeda operatives may be using (together with diamonds and
some bearer instruments) to hide and move money around the world. A few
diehard gold bugs seized on these statements and suggested that the
powers-that-be are scared, and trying to find a way to cast gold ownership
in an "unpatriotic" light. Frankly, I think they're making a mountain out
of a molehill.
One incredibly interesting story surrounding gold has come out in the last
few days, though, that does warrant some attention. It seems that
well-regarded mutual fund manager John Embry of Royal Bank of Canada (among
other things, he manages the bank's very successful precious metals mutual
fund, which happens to own a significant piece of Claude Resources) authored
a report on the gold market for his peers at the bank. In it, he offered
his viewpoint that--among other things--there has indeed been a "conspiracy"
to suppress the gold price, the suppression has been engineered chiefly by
the U.S. Federal Reserve, and that the Fed is scared s__tless that it could
lose control and have all those billions of dollars worth of derivatives to
clean up. The ingredients, according to Embry's report, could lead to a far
more dramatic price rise at some point than most expect.
Somehow, this report made its way outside the four walls of RBC, and ended
up in the hands of Bill Murphy, the head of the Gold Antitrust Action Group.
Needless to say, Murphy has spread Embry's report far and wide (though one
report suggests he's been threatened by the bank with a lawsuit.) For its
part, embarrassed Royal Bank officials have been quick to claim that Embry's
report does not represent the bank's views. Apart from that, they're just
hopping mad that someone got their hands on this, and has made it look like
the bank is endorsing the views not only of Embry, but of "conspiracy nuts."
Embry cannot be dismissed, however--and he is a highly-regarded enough
money manager that this report is turning some heads. As a Monday piece by
Matthew Ingram in Toronto's Globe and Mail put it, getting such a
well-regarded money manager from a major bank to essentially agree with what
GATA has been saying for a few years now is, ". . .a bit like the U.S.
government admitting that yes, there was a top-level CIA plot to assassinate
former president John F. Kennedy, and the whole lone-gunman theory was just
To my knowledge, this story has not received much airing outside of Canada,
or outside of the various gold-related Internet sites that are out there
(which you should visit to read a lot more of the juicy details of this
story.) At the moment, it does not seem to be a driver of gold prices;
however, in the end, Embry's report makes the case stronger still for higher
gold prices down the road.
Gold -- Sharefin, 06:57:50 06/26/02 Wed
AurionGold rejects Placer bid
Lenny Kaplan -- Sharefin, 06:50:10 06/26/02 Wed
While some malaise continues to pervade the precious metals markets, extremely bullish external forces have dragged prices higher. The USD unrelenting and precipitous declines (down about 2 1/2 cents against the Euro in just one week!!) are strongly prompting global investors to seek safer havens, and the precious metals are the traditional harbor. The USA equity markets continue their most bearish stance, with the DJIA down over 200 points for the week, as values deteriorated rapidly in the later part of the week. Such rapid and painful declines are literally forcing investors to seek diversification in alternative investments, as staying in the equities markets becomes more foolhardy as each passing week goes by.
In my 27 years as a professional in this industry, I must admit that I have never seen such a confluence of bullish factors, both from macroeconomic and technical considerations, as exist in the gold market today. If just 1/10 of 1% of the global financial assets enter the gold market, that would total approximately 3500 tons of demand, with annual production at about 2600 tons per annum and probably declining in the coming years. I look for a long-term secular bull market in gold, silver, and perhaps platinum as well. But please be advised, bull markets do not go straight up day after day, and investor psychology, blown by the winds of news and events, can and do create large sudden violent declines in prices. And, as the prices of gold and silver edge higher and higher over the coming months and years, I will guarantee that volatilities will increase. To this end, as a trading strategy, it will be imperative to moderate leverage, or gearing, in trading accounts, to take advantage of the high premiums being paid on options (predominantly calls at this time), and to make very sure that one remains resolute emotionally and makes decisions based upon the realities of the market rather than emotional drivers.
While silver slumbered, up only 1 cent for week, still recuperating from the vicious beatings it survived recently, gold was up $5.50, making its way from under $320 to test technical resistance at $325. Platinum, the preferred purchase of the Far East investor, was up over $7, while palladium fell $6 as continued bearish fundamental news emerged.
In a most ironic turn of economic events, one of the drivers of a lower USD is the "carry trade". In years past, large hedge funds borrowed gold at very low interest rates, sold the gold into the market immediately, and then utilized the proceeds to invest in US Treasury Bills or Bonds, or other financial instruments, at sharply higher rates and then pocketed the difference. Such activities were largely rumored to have forced gold to the very low price levels seen in years past. Now, the reverse is occurring and its use appears to be escalating rapidly. Now, we are seeing hedge funds borrowing USD, selling them immediately and re-investing the proceeds into higher yielding investments where the probabilities of a higher return seem likely. As an example, if you borrowed USD at the beginning of this year, at the then current rate of 2.4% for one year Libor, and invested the proceeds into gold, as of June 1st, your cost of funds were about 1.2% while gold has risen 16% during the relevant period.
At the recent IPMI conference in Florida, there was a great hue and outcry that the gold market both required greater investor involvement and a cost efficient, reliable, and effective investment vehicle. I strongly agree that investor interest will be paramount in pushing prices higher but I am completely at odds with their opinion that a "new" investment methodology must be created to facilitate the investor. Such an investment vehicle ALREADY exists in the futures markets. Such transactions are highly regulated, all clients accounts are held fully segregated, there is superb liquidity and full transparency, and total transaction costs for BOTH the purchase and the sale (a full round-trip) average about 50 cents per ounce. I cannot imagine a more efficient method for dealing in gold and yet, many of the participants of the conference continue to search out alternative methodologies when the perfect solution is apparent. Perhaps the answer is that most of the major firms represented are not licensed to broker futures and options on futures.
And, the futures industry is soon going to be catering to the small investor as well, as plans exist to begin trading E-MINI contracts in gold and silver in New York. From the information that I have been able to gather, these contracts will be traded electronically, will be 1/4 to 1/5 of the size of the "regular" futures contracts (so silver may be able to be traded in quantities as small as 1000 ounces and gold, perhaps, as small as 25 ounces), and such trading will commence in late summer or early fall.
In one of the most bullish reports that I have seen emerge from a major financial institution, the money management arm of Royal Bank of Canada expects "gold will more than rally, it will explode spectacularly to the upside". Another excerpt from this report is as follows, "The U.S. Dollar has been levitating for a long time, but the underlying fundamentals continue to erode. The US current-account deficit exceeds $400 Billion USD annually, and the continuation of this chronic deficit has turned the US into the world's largest debtor as most of these deficits are being recycled into US debt instruments. Gold is already in a bull market in USD, and an established bull market in every other currency. If the reserve currency, the USD, falters, gold could well be launched on the upside as people recognize its status as the only true currency" My oh my!! How the world changes and how quickly!! Just one year ago, the old-line financial institutions and the leading economic analysts would have certainly called the insane asylum quickly and made reservations for anyone who harbored such thoughts.
Such paradigm shifts in investment and financial recommendations bring up a critical trading truism. Markets are only about psychology, and the fundamentals of supply and demand are nowhere near as important. The facts of a market are only of minor importance, it is the PERCEPTION of those facts that drives prices and influences markets. Such promulgations of opinion, as noted above, do much to change investor perception.
Gold -- Sharefin, 05:16:49 06/26/02 Wed
Hedging too little - too late.
I am presuming that most all hedges being covered of late are being covered with paper rather than with physical.
Be it that Mining Hedges have been reduced from approx 4000 tons down to 3000 tons, how much of this has been with physical & how much has been with paper gold?
Seeing that the physical supply/demand situation is already in a deficit and that the shortfall of this differential has been made up from Cental Banks sales. How much of the above 1000 tons has been actually covered with physical gold?
My guess would be a minimal percentage.
This would then infer that the Central Banks have got little of their leased gold back and that so far all we've seen is the miners closing out their hedges (using paper) between themselves & their bullion banks.
So presumably the bullion banks are still holding that part of the leases still between themselves & the central banks.
If this is the case then the liquidity of these markets when it comes to physical gold is tight.
Any higher prices or attempts to cover with physical will drain off what is left of the available liquidity.
With the Central banks short anywhere from 50% to 100% (100% being deduced from the IMF/BIS report) they will not be in a position to add substancial liquidity to the markets in the form of physical bullion.
Conceptualising the above and considering these phenominal paper gold markets and the fact that many tons have been paper sold many times over.
OK, now here's the killer question......^o-o^........
If the paper gold markets were to stop functioning tomorrow then at what price would physical bullion settle at????
To my mind gold is already priced in the thousands - it's just the paper overhang that is stopping this from being recognised.
Viva la gold bull!!!!
Fiat -- Sharefin, 04:37:50 06/26/02 Wed
Portfolio pain spreads on Main Street
"Richard Russell (editor of the Dow Theory Letters) thinks we are in the second or third inning of this bear market, and that the decline in the indexes has much further to run," says Michael J.Walker, a certified financial planner. "He also thinks that it may take several more years to reach the end of this bear. If he is right, it will be the story of the decade. The amount of financial damage to small investors would be unimaginable."
Gold -- Sharefin, 04:31:17 06/26/02 Wed
MR3 Systems to Extract Gold From Colorado Gold Mine Tailings and Dumps
MR3 Systems, Inc., (NQB:MRMR) announced today that on June 18, 2002, it entered into a MR3 Metals Extraction Agreement with Consolidated Empire Gold, Inc., of Evergreen, Colo., to process gold from the gold tailings and dumps located at Grace Gold Mine Complex in Empire, Color., 45 miles west of Denver. The Agreement calls for MR3 to install its Technology on the gold mine site to process 500 tons per day of gold-bearing material into gold bars. Consolidated estimates that there are over 450,000 tons of gold tailings and dumps on the site, to be processed over the next 2+ years. The yield, at an average of .08 ounces of gold per ton, should exceed 35,000 ounces of gold and result in over $10,000,000 in gold bar sales at $300 per ounce.
Earlier this year our research and development team discovered a breakthrough in the application of the MR3 Technology for the processing of low-concentration gold tailings on an economical basis. Because we extract gold by employing an environmentally-friendly methodology, without the use of cyanide or similar pollutants now illegal in many states, the opportunities to expand MR3's gold recovery business are substantial.
MR3 is a high-tech, state-of-the-art metals extraction and separation technology capable of converting hazardous liabilities into non-hazardous, profitable assets through the processing of industrial wastes and other complex metals sources into pure metals and specialty chemical products. The Company believes this to be the only technology available that can selectively and individually remove and purify all targeted metals from aqueous solutions economically on a commercial scale. The multi-billion dollar global markets for the MR3 System include the processing and treatment of electric arc furnace dust, nuclear wastes, semiconductor manufacturing and electroplating effluents, mercury and metal hydroxide sludges, precious metals mining tailings, and other industrial waste streams containing high concentrations of valuable metals.
Gold -- Sharefin, 04:19:53 06/26/02 Wed
Who moves first is the winner
Producer gold hedging shows a negative mark-to-market of almost $2 billion in the first quarter. The only company on the plus side is Placer Dome, which is ahead $235 million. Gold bullion went from $277 to $303 an ounce during the quarter for a gain of 9.4%. If gold remains in the $315 to $350 range for the remainder of the year the financial situation for Barrick, Newmont and AngloGold will look bleak and Placer will join them if the AurionGold takeover goes as planned. A smart move for Placer would be some kind of financing and cover of AurionGold's hedge position when they take control. But will it be too late? The top four hedgers of Barrick, AngloGold, Placer Dome and Newmont have over 50 million ounces of hedge commitments, 50% of which belong to Barrick. Australia's Newcrest is offside $500 million with six million hedged ounces and AurionGold has 86% of its reserves sold short. In general, the Australian producers are hedged far heavier than the North American producers.
I know of a number of small producers who are doing financings and share offerings to raise money to buy back gold and close their hedges. This is a smart move but the problem with the big producers is their position is too large and if one of them announces a move to cover it will trigger an explosive move in gold prices and could start a buying panic. In past bull markets, news of a large producer covering has spiked gold $25/oz and in this market a $50 move would not surprise me. The problem is the huge short position of the bullion banks and producers will get them into serious trouble when gold moves over $350. This is the main reason I have set $330 to $350 as my first target in this gold bull market. I believe the gold shorts will make a serious stand in this price range. Of course their action would only be a temporary blip in the longer term chart in this bull market and there is no telling how things will play out for sure. All hell could break loose if one of them jumps ship or if one of the big producers covers.
The big producers know the situation and I expect one of them will surprise the market and cover. If I were a betting man I would go with Newmont. Pierre Lasonde, their CEO, is one of the smartest in the gold business. Barrick is probably in too deep with the bullion banks and Placer seems to be behind the eight ball as far as acquiring gold assets at the bottom of the cycle is concerned. However, a move now by Placer could give them a hand up on their competitors. The problem is it is just too risky to bet on who will come out on top. An explosive move in gold is a reality and it will damage the big hedgers. It was also interesting to note the large drop in the three hedger's share price in May and they have not recovered, although gold has moved back up.
Gold -- Sharefin, 04:07:57 06/26/02 Wed
Gold Hedging Reality
Gold is approaching my first target area of $330 to $350. This is where things really start to get interesting and you have to be careful which gold stocks you own. The hedgers are in a deteriorating state and are trapped. The first one to move could cause a panic and a buying stampede that drives gold higher. Some gold stocks will soar and others will languish or go down.
Gold -- Sharefin, 03:29:25 06/26/02 Wed
Here's a chart showing the differences between the various gold derivatives according to the numbers circulating.
The large value is from the IMF/BIS report on gold derivatives - $280 billion @ $300 gold equals approx 29,000 tons.
The middle number is approx 3000 tons which is the total of gold hedged by miners.
The small number is the current number of gold shorts on the Comex.
Gold -- Sharefin, 03:06:56 06/26/02 Wed
Missive adds weight to gold conspiracy theory
Source: South China Morning Post
The gold bugs got a boost at the weekend. An investment letter by John Embry, a money manager with the Royal Bank of Canada, appeared to back the central argument of conspiracy theorists who for more than three years have been crowing about the co-ordinated attempt to keep the yellow metal low.
According to the theory, the United States Federal Reserve, the Bank of England, a consortium of Wall Street banks headed by JP Morgan and Goldman Sachs, and others ganged together in the mid- 1990s to keep the price of gold at less than US$290 an ounce.
In Mr Embry's letter - later called an "internal" piece and played down by his bank - the manager reportedly asserted that manipulation of the gold price began in 1995 and that "those with a vested interest in containing the price of gold - central banks, bullion banks, heavily hedged gold companies - will not die easily, but the tide is moving strongly against them".
The price manipulation theorists - who include the Gold Anti- Trust Action Committee (Gata) - took Mr Embry's words as a huge vote of confidence for their take on the depressed gold market of the 1990s.
The gold bugs hold that the price has been manipulated by the massive short positions built up by banks over the years - positions aided by an extremely generous lease rate of about 1 per cent by the central banks.
Gold producers, too, have played a part, taking out billions of dollars of derivative contracts to hedge against the falling prices, they maintain.
The banks have purportedly been borrowing the gold, selling it on the market and ploughing the sales proceeds into better performing assets.
That has left them with tens of billions of dollars in short positions in gold; a serious enough increase in prices and the global financial system starts looking wobbly.
Hence, the theorists say, the bailout of hedge fund Long Term Capital Management in 1998 was, in part, an attempt to keep the price of the yellow metal depressed.
Gata accused the hedge fund of being short 300 tonnes of gold but a letter from the fund's lawyers saw Gata back down.
The gold bugs also contend that the US authorities have been keeping gold prices depressed to bolster the price of the US dollar and maintain the trade deficit, allowing the US to maintain its position as investment destination par excellence and paying for the late 1990s boom.
Dismissed by many as a few cans short of a six-pack, the gold bug theorists have nevertheless kept their foes busy over the past few years.
They have published report after report exposing the banks' and producers' positions as well as studies of central bank gold hoards. They prompted the introduction of a bill in the US House of Congress forbidding the Federal Reserve and Treasury from intervening in the gold markets and took the Bank for International Settlements and Alan Greenspan, among others, to court for manipulation. The case was thrown out of court last year.
The mainstream line is that gold slumped because of a widespread perception at the end of 1990s that, with the inflation demons tamed, it was a relic of a former world.
Not that any recent events - including oversupply in the past decade, the sudden rise in gold prices on renewed Japanese buying and growing investor risk aversion - have shaken the gold bugs' conviction.
"This is one of the most important reports ever written on the gold market. They understand the dynamics being played out," Gata chairman Bill Murphy said.
Gold & Fiat -- Sharefin, 00:11:53 06/26/02 Wed
US Dollar Index
GC02Q - trend still intact
Fiat -- Sharefin, 23:08:18 06/25/02 Tue
Recovering from the dollar
There are increasing signs in the market that the US dollar has embarked on a correction that could be prolonged and sustained. If so, that is likely to provide an important boost for the global economy.
The dollar's decline since March has been broad-based. It has fallen nearly 10 per cent against traditional inflation hedge assets such as the Australian dollar, the South African rand and gold. It has experienced a more moderate correction against other main currencies such as the euro and the yen.
The dollar has been strong for so long that most investors have forgotten the impact of previous periods of dollar weakness on monetary conditions and exchange-rate policy in other countries. But the fact remains that the US is still the world economy's growth locomotive and other countries will find it difficult to cope with a large dollar depreciation. As a result dollar weakness will quickly turn into an engine for competitive global monetary reflation in order to restrain exchange-rate appreciation.
Gold -- Sharefin, 04:16:55 06/25/02 Tue
When does the Final Shoe Fall on the Complacent Hedger?
We have previously outlined to you what makes the gold market happen in fundamental terms. For gold to establish a trend there need be no other stimulus these than fundamental issues. However for the sake of review we will briefly review.
The dynamic condition of the US Dollar.
The condition of the Current Account in dynamic, not static terms.
The attractiveness (or not) of equities as a storehouse of value in the minds of international investors.
The attractiveness (or not) of the US Federal Debt market, 10-year bonds and 30 year bonds, as a storehouse of value in terms of international investors.
The condition of the general commodity market.
That is the entire gold story. All the rest is noise. It may be important noise but other criteria remains only noise. The trend is made by the fundamental five criteria above. The noise can excite or dull the gold trend but it does not make the gold trend. International political tension is a noise item. The market fight between great position holders is a noise item. If you understand the five criteria of trend then you might not need us. We wish to impart knowledge and our goal would be realized when you do not need us. We have a combined 90 years of experience in gold. It is yours for the reading. Please take it and take it to the financial engineers of the gold producers you are invested in. Please save them from themselves thereby saving yourself and gold as a monetary vehicle as well.
Gold -- Sharefin, 03:53:41 06/25/02 Tue
China's Gold Reserve Increases to 500 Tons
China's gold reserve has increased from 395 tons in the past to 500 tons at present, up nearly 27 percent, said President of People's Bank of China (PBC) Dai Xianglong.
But he did not give reasons for the reserve increase.
Experts take it as a token indicating that China thinks gold has the capacity of resisting financial risks and gold is still the strongest currency in financial crisis. To increase gold reserve is an important move for China to ensure its economic and financial safety.
Gold -- Sharefin, 03:48:21 06/25/02 Tue
Gold Market Not Mature Enough to Open to Individual Players
The gold market is not mature enough to open to individual speculation, according to banking officials.
It has long been in the works to open the gold market to individuals. But Chinese banks have shown little confidence in this unfamiliar market and many banks even do not know how to handle gold business.
The central bank has relaxed the control over gold businesses and many banks have started preparing for the opening of the gold market, including gold trading, gold leasing, gold account and hedging.
It is an inevitable trend for individuals to speculate on the gold market. But, due to designing and positioning of products and development conditions, it still takes time to realize the goal.
Even if the gold market is opened to individuals, a central bank official warns, the main function of gold is still to preserve values and never for pure speculation.
Gold -- Sharefin, 03:37:39 06/25/02 Tue
Mexico Penoles CEO Sees Ctrl Bks Selling Gold At $350/Oz
The chief executive of the world's largest silver producer said Monday he expects central banks will have an incentive to sell gold if the metal reaches $350 an ounce.
"My perception is that the central banks have so much gold that, at the end of the day, they are the ones who are going to dictate the price," Lomelin said.
"At the moment that they think the price is interesting, they will start to sell gold and at that moment, the price could stabilize," Lomelin said.
Asked what that price might be, Lomelin said: "I feel that at $350 an ounce there will be an appetite on the part of the central banks to sell."
Penoles is Mexico's largest producer of gold, which accounts for about a quarter of the company's sales. The company sold 879,300 ounces of gold in 2001, up from 654,800 ounces in 2000.
Lomelin said he expects central banks to renew the Washington Agreement, which limits their gold sales to 400 tons a year. The agreement expires in 2004.
"The agreement has to be renewed. If it's not renewed, there could be a large sale of gold by central banks to their own detriment. If they all start selling in disorder, the price will drop," Lomelin said.
"The Washington Agreement provides us with order. Everybody in this business is hoping there will be an extension," he said.
Gold -- Sharefin, 03:26:54 06/25/02 Tue
Australia gold output forecast
The Australian Bureau for Agricultural and Resource Economics forecasts for Australian gold mine output.
The Bureau revised its 2002/03 gold mine production from 296 tonnes to 294 tonnes. The mine production of 2001/02 was 271 tonnes.
Gold -- Sharefin, 03:24:04 06/25/02 Tue
Mineral rights talks collapse
The government abandoned months of negotiation with mine owners on Monday and endorsed without major amendments a bill critics say will hurt confidence in the industry that built the country's wealth.
The bill, which will shift mineral rights from private to state custodianship and deny miners the right to secure resources for future expansion, is virtually assured of adoption by the National Assembly on Tuesday.
Gold -- Sharefin, 03:23:03 06/25/02 Tue
Jewelry Promises Huge Market Potential
China's annual business turnover of jewelry amounted to over 100 billion yuan at present, and it is still growing at an annual speed of 8-10 percent.
According to China Jewelry Import and Export Corporation General Manager Liu Shengyu, China has become one of the few countries whose jewelry consumption has exceeded 10 billion US dollars. China's annual gold demand stands above 250 tons at present. The demand for platinum was 42 tons in 2001, accounting for 60 percent of the world's total output in the year. Even so, per capita jewelry consumption in China is still lower than the average level in developing countries.
Gold -- Sharefin, 03:20:32 06/25/02 Tue
India mulls proposal to allow futures trading in gold
The Indian government is considering a proposal to allow futures trading in gold following a recommendation from the country's Forward Markets Commission, whose approval is mandatory before the government allows futures in gold, a senior government official said Monday. India is the world's largest gold consumer and importer, consuming nearly 850mt/year. It meets domestic demand through a combination of official imports, smuggling, and recycling of old jewelry.
Its gold reserves are conservatively estimated at 12,000mt, the bulk of it in the form of jewelry among the 1-bil strong Indians.
India, a pioneer in futures trading, banned futures in almost all commodities in the 1970s, saying futures trading caused excessive speculation, fueled shortages and encouraged steep price rises.
Silver -- Sharefin, 03:17:21 06/25/02 Tue
Bill would create new silver market
Strategic stockpile will be empty in two months
Legislation before Congress will enable the federal government to become a net silver buyer for the first time in four decades.
The bill sponsored by representatives from three of the nation's silver-producing states, would create a new market for domestically produced silver in government-minted coins. It is good news, if preliminary, for North Idaho mines -- many of which have been idled amid slumping metal markets.
The initiative was prompted by news that the U.S. government's 730 million-ounce strategic stockpile of silver -- accumulated in the years immediately following World War II -- will be empty within the next two months.
Since 1986, the stockpile has quietly walked out of the U.S. Treasury, been stamped into rounds by Sunshine Minting Co. and struck by the U.S. Mint into 1-ounce investment coins - at the rate of about 10 million troy ounces per year.
Since its congressional authorization, the U.S. Mint's coin program has consumed 137.5 million ounces of the white metal. At current consumption rates, the stockpile will be gone by the end of July, Sen. Mike Crapo, R-Idaho, told The Coeur d'Alene Press.
"With the depletion of silver reserves in the Defense Logistics Agency Stockpile, it has become necessary for the Department of the Treasury to acquire silver from other sources," Crapo said.
The American Eagle program has netted more than $264 million to the Treasury since its 1986 enactment, Crapo said. But now that the government's silver is gone, the Mint should be authorized to replace it from the market.
Crapo said the American Eagle is the world's most successful silver coinage program. It was a creation of then-Sen. Jim McClure, R-Idaho, to thwart Carter and Reagan administration-era threats to dump the entire Strategic and Critical Materials Stockpile of silver on the open market.
Both Carter and Reagan auctioned silver during the 1979-1980 price runup in order to shore up the treasury and quash the silver and gold markets, which were threatening the US Dollar.
Crapo's legislation, co-sponsored by Sen. Wayne Allard of Colorado and Sen. Harry Reid of Nevada calls for a continuation of the American Eagle coinage program. It additionally would allow the U.S. Mint to buy silver off the open market "while not paying more than the average world price," Crapo said.
"I feel very positive about this legislation. This is a benefit to the Treasury and to the silver mining industry. The fact that my co-sponsor, Sen. Reid, is Senate Majority Whip, is also encouraging," Crapo told The Coeur d'Alene Press.
Based on the Mint's current consumption rate, the legislation would create a market for 10 million ounces of silver annually - the equivalent of two Sunshine mines.
A Crapo staffer told The Coeur d'Alene Press on Friday that the legislation could contain language requiring the Mint to purchase silver from US refiners, if it complies with current trade treaties.
At current consumption rates, the Mint would need to buy, at the mill-head, about one-fifth of all American silver production.
Gold -- Sharefin, 03:13:06 06/25/02 Tue
Gold and currency reserves of Central Bank to plummet
The growth of gold and currency reserves of the Central Bank of Russia will be much lower in the second half of 2002 than in the first one, Central Bank head Sergey Ignatyev said at a conference for investors organized by the Renaissance Capital Investment Group today. According to him, this is attributed to the fact that at the end of the year "the problem of budget implementation is preserved". The chairman of the Central Bank pointed out that in December budget institutions spent large amounts of resources saved at their account over a year. That is why the Central Bank will have to reduce currency reserves this year, like last year, in order "to hamper the considerable growth of the money supply or ruble devaluation". This is the reason why there will be "a considerable decrease in gold and currency reserves" in December, the banker stressed. Answering journalists' questions about the $500m decrease in gold and currency reserves in May, Ignatyev said that this was "a quite normal iteration when one sells or buys gold". He also reported that the weakening of the dollar against the euro, which was currently taking place on the world market, would not influence the servicing of the foreign debt much. According to the head of the Central Bank, the foreign debt of Russia is designated both in dollars and in euros. This is why "the weakening of the dollar will not influence budget implementation considerably"; neither will it impact the volume of gold and currency reserves.
Gold -- Sharefin, 03:11:29 06/25/02 Tue
Gold imports likely to drop 30%
Gold imports into the country in the April-June quarter are estimated to drop 20-30 per cent from the same period last year because of the high price of the metal in the global market. According to analysts, gold prices will remain high in 2002, and may touch $340 per troy ounce soon.
“The upward movement in prices is here to stay. Once the price stabilises at the higher end, demand will pick up again,” analysts said. They added that consumer demand could fall but it would be balanced by investment demand.
“Fund managers across the world are investing in gold to book profits. Of the $35 trillion-strong financial market, even if 10 per cent is invested in gold, its consumption will go up to 3,500 tonnes, whereas the total world production of the metal is only 2,500-3,000 tonnes,” they said.
Gold -- Sharefin, 03:07:39 06/25/02 Tue
Australia's Aurion Gold Set To Start Haggling With Placer
Australian takeover target AurionGold Ltd. (A.AOR) will set the scene for haggling with its suitor Wednesday when it releases its long awaited response to Canada-based Placer Dome Inc.'s (PDG) A$2 billion unsolicited bid.
Key will be whether AurionGold will put a price on itself, or at least publish an independent valuation.
GATA -- Sharefin, 03:00:10 06/25/02 Tue
Meanwhile, the Toronto Globe & Mail has new
commentary on the controversy, which was
posted on the newspaper's Internet site
Monday afternoon and well may appear in its
print edition today. I'll append that text.
Some of us are a little puzzled by all the
fuss. If, as Royal Bank says, the bank's gold
conspiracy report is no more than a
memorandum for internal use signifying only
the views of one bank employee, practically
meaningless; if, as the Globe & Mail's
commentary speculates, GATA is just a bunch
of conspiracy nut cases cast off from "The X-
Files"; and if the gold market is actually
entirely normal ... why should anyone be
upset at all?
Why? Probably because as GATA's contentions
seep into the mainstream press around the
world, there is growing danger that an
enterprising journalist or two will pose a
few inconvenient questions to government
officials, and one thing will lead to
another, and before you know it, a free
market in gold might break out somewhere.
The funny -- and, so far, tragic -- thing
is that the conspiracy GATA has been talking
about is quite an open one, a matter of
public policy and public record.
The European central banks gathered in
Washington and announced their plans to
regulate the gold price by regulating their
own gold leasing.
Fed Chairman Alan Greenspan testified to two
congressional committees about this central
bank regulation of the gold price. Greenspan
said: "Central banks stand ready to lease gold
in increasing quantities should the price
And GATA has issued dozens of reports,
archived on the Internet, compiling the hard
evidence of collusion against the gold price.
The question is not at all whether there is
a conspiracy to control the gold price; the
only questions are just how far this
conspiracy extends, exactly which mechanisms
are used to implement it, and the propriety
of all it.
Of course it is more difficult, and dangerous,
to address these questions than to call GATA a
bunch of "conspiracy nuts."
Gold -- Sharefin, 22:02:10 06/24/02 Mon
Exploding myths that sap investors
Myth No. 8.: Gold mining stocks are expensive. Actually, this one is true. Gold mining shares such as Newmont Mining (NEM: news, chart, profile), the world's largest, are selling for 13 times cash flow. But as we said, it's all a moving target. Gold stocks will get even more expensive, fabulously more expensive, as the stock-market and U.S. dollar declines become part-and parcel of everyday life. Every $10 rise in the gold price is like rocket fuel to gold miners' profit margins. With the price of spot gold flirting with the $330 level, mining equities are poised to retain their status as this year's biggest stock market gainers.
Gold -- Sharefin, 21:59:53 06/24/02 Mon
New Ratings on Barrick Gold Corp
Barrick Gold Corp. - Outperform
If Barrick is to outperform then gold must be going to the moon soon.(:-)))
Gold -- Sharefin, 21:29:32 06/24/02 Mon
Higher World Gold Prices Discourage India's Buying
Higher gold prices have led to the precious metal being less attractive to the world's largest gold consumer - India, resulting in a decline in its imports of the yellow metal, MMTC Ltd's chairman and managing director said Monday.
State-owned MMTC is India's biggest trading company, and its largest gold importer. The company imports over 100 metric tons of gold each year, accounting for around 16% of the country's total demand.
If Indian's gold demand keeps declining at the current rate and gold prices continue rising, India's imports this year could decline 5%-10% from the year before, he added.
MMTC's first quarter's imports fell 5% from the previous quarter, he said.
In the first quarter, India's gold demand fell 40% to 149.8 tons from the same period last year, according to the World Gold Council.
MMTC is India's biggest importer and thinks that imports could fall 5-10 % yet the WGC says demand fell 40%.
That's a big discrepancy!
Fiat -- Sharefin, 21:23:26 06/24/02 Mon
Gary North - Betrayal of the Public Trust
Gold -- Sharefin, 21:17:08 06/24/02 Mon
Uproar over RBC gold conspiracy report
A bullish report on gold has been strongly disavowed by Royal Bank of Canada, which is now saying it was for internal consumption only. Prior to repudiation, the report marked the first formal acknowledgement by an investment institution of an American led conspiracy to suppress the price of gold.
Canada's Globe & Mail confirmed on Saturday that RBC was officially distancing itself from the report, which was authored by its top professional gold investor, John Embry. Embry could not be reached for comment.
Gold -- Sharefin, 20:42:55 06/24/02 Mon
Beware of the e-Gold scams circulating the web.
I've personally had two of these scam emails trying to gain access to my e-Gold account.
Cyber gold is a far cry from real gold.......
Gold -- Sharefin, 20:40:21 06/24/02 Mon
A gold-plated conspiracy theory
Imagine the excitement last week at the headquarters of GATA - the Gold Anti-Trust Action Committee - when noted Royal Bank mutual fund manager John Embry issued a report referring to a price-manipulation conspiracy in the global gold market.
The Royal Bank seemed less than impressed at being allied with the gold conspiracy camp, however. Mark Arthur, head of Royal Bank Investment Management, said Mr. Embry's report was done for internal use and "in no way reflects the views of Royal Bank." He described it as "a collection of various arguments for gold stocks" that was part of a larger discussion. But it was clear that GATA members saw it as an endorsement by RBC.
Mr. Embry is not a crank - he is one of Canada's leading fund managers. In his report, he lists several reasons why gold prices could rise, including "increasing evidence of unsustainable gold price manipulation." He refers to gold sales by New York's Federal Reserve Bank, the timing of gains in the government's Exchange Stabilization Fund, and a statistical analysis that shows "high probability of price suppression."
Gold -- Sharefin, 20:30:58 06/24/02 Mon
Planetgold: Interview with GATA's, Bill Murphy
Fiat -- Sharefin, 05:54:07 06/24/02 Mon
The Ominous Return of the Twin Deficits
Perhaps it was coincidence, but with yesterday’s ominous “Twin Deficits” announcements we saw the first trading session in some time where acute financial market stress was not mitigated by rallying bond prices. In fact, the U.S. bond market was under intense pressure yesterday, although it did rally today. We will watch carefully for evidence that this week marked a key inflection point for the U.S. Credit market. With Wall Street balance sheets bloated with bonds and leveraged interest rate speculation endemic, surging bond prices have cushioned the pain of sinking stock prices and sporadic corporate debt woes. If U.S. bond prices have peaked, this would be a not insignificant development for U.S. financial fragility. At the minimum, yesterday and this week certainly provide convincing evidence that the U.S. dollar has lost its safe haven status. To see currencies and bonds throughout Latin American go into a tailspin and the dollar simultaneously under heavy selling pressure is quite disconcerting, to say the least.
After a week like the one just completed, we believe it is appropriate to keep our comments “tempered.” Clearly, the unfolding financial crisis took a major step forward the past few sessions. Latin America is in a full-fledged financial crisis at this point, which is one more major problem for our major financial institutions. To what extent derivative players and leveraged speculators have been involved in these various markets we are unsure, but we fear they have been significant in Brazil and Mexico. The prices of default swaps on Brazilian debt has surged over the past three weeks, and an Argentina-style collapse of much larger dimensions is no longer a long-shot. If Mexico catches the capital flight and “hedging” virus, we’re looking at a very major problem.
It is also clear that the telecommunications/technology sector is in an outright collapse. That ultra easy money was not capable of transforming so many negative cash flow companies into viable businesses, we are not the least bit surprised. But the dimensions of the unfolding bust in the face of ultra-easy money and continued rampant system Credit creation could not be more discomforting. Our fear continues to be that there are major unrecognized losses hidden out there in the murky world of derivatives, with players for some time hoping that a Fed-orchestrated rally would let them off the hook. But hope must be turning to fear as, instead of an industry recovery, an historic collapse is creating mushrooming losses. A derivative player that had been writing protection against declining technology stocks, telecommunications bond defaults, Latin America currency and debt woes, and a declining U.S. dollar must today be feeling the heat. Leveraged speculators in these various markets must have little choice but to run for cover. As we have tried to explain many times in the past, contemporary finance dominated by the leveraged speculating community and derivative risk markets tightly links various global financial markets. Liquidation in one market can quickly incite a domino-style financial crisis, as we began to witness this week.
The escalation of systemic stress reached the point this week where we would normally see a response from the Fed. We would expect some effort to contain the unfolding crisis at the “periphery” before it afflicts the “core.” The major problem is that we fear that the “core” of the problem is an increasingly impaired U.S. financial sector and maladjusted economy. We view the weak dollar as confirmation of this view, and this week’s announcements of a Return to Twin Deficits a stark reminder of underlying fundamentals. When the dollar remained strong, such announcements were of little concern to our foreign lenders. This week it appeared to become a concern, with changing perceptions as to the health of the U.S. financial system almost palpable.
The risk now becomes that the expanding contraction of Credit availability for U.S. corporations escalates into an issue of problematic systemic Credit crunch - or a run against U.S. financial assets. The good news is we have to this point seen no indication of faltering systemic liquidity. The bad news is how poorly financial markets are performing in the midst of abundant general liquidity. Thus far, foreign holders of our securities have enjoyed the luxury of easily (and inexpensively) hedging their dollar risk in the derivatives market. This has put the onus on the major derivative players to “dynamically hedge” their risk exposure to the protection they have written. We would suspect that the derivative players are major dollar sellers, and will be forced to continue to sell dollars into weakness. It continues to be our fear that the epicenter of the unfolding financial crisis is located with the major U.S. risk intermediaries. If confidence begins to falter in these players or the derivatives market generally, we would expect the commencement of a serious and problematic liquidation of U.S. financial assets.
Fiat -- Sharefin, 04:17:17 06/24/02 Mon
Exceptionally heavy traffic seen on TheBullionDesk may suggest a rally today is in prospect ...
Fiat -- Sharefin, 04:15:59 06/24/02 Mon
Asian gold softer in afternoon after BOJ intervention
The Bank of Japan's (BOJ) purchase of dollars for yen in the early (Tokyo) afternoon halted the yen's appreciation and pushed the dollar and the spot gold price lower.
But some traders feared that the BOJ's action may be relatively fruitless.
The dollar's weakness against several other major currencies appeared to be the dominant trend and born out of long-term macroeconomic anomalies, including such thorny issues as the large U.S. current account deficit.
"We may be seeing a loss of confidence in the U.S. economy and dollar, but as a trader I think it is best to stay out of the market right now,"
Gold -- Sharefin, 04:14:31 06/24/02 Mon
Newcrest Shares Climb After Gold Gains, Takeover Target Report
Newcrest Mining Ltd. shares rose to their highest price in almost two weeks as gold prices gained and after the Australian Financial Review said the nation's biggest gold producer by market value may be a takeover target.
Gold -- Sharefin, 04:11:20 06/24/02 Mon
S African miners in golden chess game Down Under
Gold -- Sharefin, 04:06:20 06/24/02 Mon
MKS Finance S.A. and PAMP S.A. of Switzerland Reinforce Their Presence In the United States Physical Gold and Precious Metals Markets With The Acquisition of Manfra Tordella & Brookes,
MKS Finance S.A. through its wholly owned subsidiary PAMP (USA) Inc. announced today that it has acquired the precious metals and coins business of Manfra Tordella & Brookes, Inc. also known as "MTB" and doing business via their well known website under the name "MTB Coins". The business will be conducted under the name of Manfra Tordella & Brookes, Inc
PAMP is affiliated with MKS Finance, a precious metals trading company. PAMP, which was founded in Switzerland in 1977, is today the world's leading private gold refining and fabricating company. It refines and fabricates in excess of twelve million ounces of gold annually. It is known primarily as a major fabricator of gold bars, which are recognized as "Good Delivery" by the major international gold markets.
Manfra Tordella & Brookes, Inc., in business since the 1950s, has been a leader in the precious metal coin industry in the United States. It has enjoyed distribution rights from every major government mint in the world, for bullion coins as well as commemorative and collectable coins. MTB has acted as advisor to several government mints in the creation of precious metals coin programs. It is primarily a wholesaler dealing with banks, brokerage houses, coin dealers and private investors.
Gold -- Sharefin, 03:57:49 06/24/02 Mon
Gold Up On Yen;BOJ Intervention Caps Gains
Spot gold rose Monday in Asia from late New York, but some of its gains were erased after the Bank of Japan intervened to shore up the U.S. dollar, said traders.
Gold -- Sharefin, 03:53:27 06/24/02 Mon
US cracks driving bullion bullish
But by all accounts that point in time is a long way off, as Mr Saville thinks gold has entered the second stage of a three-stage rally. His target price for bullion is above US$400 by the end of the year, and US$1,000 before the end of the decade.
Those figures are probably too bearish, he says. Issues that are positive for gold's outlook include a looming crisis of confidence in global currencies, and poor returns from stocks and bonds.
Gold -- Sharefin, 03:50:51 06/24/02 Mon
Is Gold back in vogue?
"Gold traditionally does well in economically uncertain times, particularly when investor sentiment is affected by geopolitical issues," he says. "World gold production is peaking, which coupled with increasing demand, suggest that the future for gold is bright."
With the continued uncertainty in equity markets assets investors are attracted to the 'safe haven' and diversification characteristics of gold. Gold typically does well as the dollar is weakening and its price movement has a low correlation with global stockmarkets.
Independant consultant, Marc Faber is also a fan of precious metals and has been since late 1999 when he wrote an article recommending Bill Gates should switch his shares into gold. Since then Microsoft shares are down by about 50% whereas gold has rallied by more than 10%. Faber believes there is room for new leadership to emerge in an asset class other than US stocks.
He argues that the Dow is very expensive compared to gold and an additional round of economic weakness would be even more bullish for commodities like gold than an economic recovery. His recent article 'Why you should own some gold' recommends that you should play the rising gold price by buying stocks of mining companies.
Gold -- Sharefin, 03:48:47 06/24/02 Mon
Gold may hit $340/oz
"I'm still thinking we are looking for further upside, with a quite volatile and generally weak asset market and downward pressure on the dollar," he added.
Gold -- Sharefin, 03:47:39 06/24/02 Mon
Is the glitter for real?
AS GOLD prices in the international markets sailed past the three-year high of $326 per troy ounce early this month, the event divided investors into two warring camps. On the one hand are the inveterate gold enthusiasts cheering the "second coming" of the yellow metal and predicting that prices may breach $650 or even $1000 per ounce in the coming months.
On the other are the diehard sceptics who see the recent surge in gold prices as nothing more than a temporary boost, and predict that gold will soon retreat to $280-290 levels. Both sides appear to have fairly strong arguments. But the fundamentals of gold appear to tilt in favour of the sceptics.
Shifty -- Sharefin, 03:21:16 06/24/02 Mon
If you're going to post the url why not learn how to embedd the code.
have a look here!
Periodic Ponzi Update PPU -- $hifty, 22:10:38 06/23/02 Sun
Periodic Ponzi Update PPU
Nasdaq 1,440.96 + Dow 9,253.79 = 10,694.75 divide by 2 = 5,347.375 Ponzi
Down -142.10 from last week.
Thanks for the link RossL !
This is the 5th consecutive week the Ponzi has fallen. It has lost -699.855 points for the move. Last time it fell 5 consecutive weeks it lost -277.64 points for the move.
Back in September the Ponzi had 6 weeks down and lost -982.08 points in the move.
Will next week tie the old record with 6 weeks down?
They would need to lose another -282.225 points this week for a true tie.
Why is it I think they can do it?
Fiat -- Sharefin, 21:49:00 06/23/02 Sun
2004: The Next Great US Depression
Where to invest
If I am right and we are on the verge of a debt deflationary collapse, the only good investment will be gold. As deflation takes hold, the confidence that debtors make good on loans falls and demand for gold rises. At some point, the US and Japanese monetary authorities will find their solution to the problem in the gold standard or by monetizing debt.
The bottom line is that the US economy is headed for a major economic depression by the year 2004. Wealth will be destroyed and only liabilities will remain. The choice will be to let deflation persist until all imbalances are extinguished through the system or to print all the liabilities away. The only place to run from the coming monetary chaos will be in the oldest form of money know to man: GOLD!!!!!!
Archives -- Sharefin, 19:14:48 06/23/02 Sun
Voy Forums has just rolled all the archives (1 through 10) into one new archive linked in above.
All prior posts since the inception of this forum have now been rolled into one page which though big (mb) covers the full period.
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