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Gold/Mining/Energy : Gold Price Monitor

GDXJ 97.99

+0.3%

4:00 PM EST

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To: Enigma who wrote (39168)	8/17/1999 9:15:00 AM
From: Ken Benes	Read Replies (1) of 116753

Last October, with the market in a deep correction and gold moving above 310.00, the central banks offered to the bullion banks unlimited amounts of gold at ridiculous terms. The bullion banks took advantage of the situation providing the markets with a burst of much needed liquidity. Unfortunately, this begain the final decline of gold below 300.00 an ounce. In May of this year with gold again rallying, the BOE preannounced a sale of gold at predetermined auction dates. This move has been unprecedented, in the past, central bank sales have been announced months after the transactions have been completed. I would like your explanation of this action by the BOE which in effect reduced the proceeds of their sale by 15%. It is difficult to imagine the strategy behind the BOE's decision, unless, the desired effect of a lower gold price was the premise. With overvalued markets, strained liquidity it is not difficult to understand why the worlds leading central banks would want an image of gold as a relic to replace one of gold being an alternative investment to paper. Ken

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