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Politics : Formerly About Applied Materials
AMAT 224.31+0.4%2:04 PM EST
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To: Jacob Snyder who wrote (32642)9/28/1999 10:32:00 PM
From: Ian@SI  Read Replies (1) of 70976
 
The surge in gold can mean only one thing: lots of people are beginning to be convinced that
inflation is on its way.

That's confidence. Wrong, but confidently so.

Fact 1. A few European central banks said they won't sell much more gold than they've already sold during the next 5 years.

Comment 1. Soon the market will recognize that there are more than 7 central banks in the world; and that the others just might take advantage of this unexpected rise in its price to dump a little.

Fact 2. These same central banks said they won't loan out their reserves to short sellers to the same extent that they've been doing in the past.

Comment 2. Lo and behold, an opportunity to make some money by others who have gold that just sitting there bearing no interest, giving no return whatsoever, ... Hmmm, what these other bankers might do when they find there's a big unserved market that will allow them to make a buck or 2 (times several million)

Fact 3. Some big short sellers panicked. They drove the price up to unsustainable levels. It's already fallen back from $330/ounce.

Comment 3. Expect the price to drift lower as the panic ebbs and the short sellers recognize that the fundamentals for gold haven't changed one iota.

JMHO,
Ian.
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