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Gold/Mining/Energy : Gold Price Monitor

GDXJ 134.75

-0.9%

Jan 21 4:00 PM EST

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To: Terry Swift who wrote (42335)	10/7/1999 4:38:00 PM
From: Ken Benes	Read Replies (3) of 116897

Terry: I am not certain that the bull is not on his needs right now. The only victims of the current run up in prices are the producers. Whether there will be more casualties remain to be seen. If we do get a pull back in the price of gold, the producers may approach their lows in price with the price of gold being much higher. This rally has exposed the producers for what they are and it will take a long time for them to regain their credibility. First the price of gold went down the toilet, now the mystique of the mining companies have followed. Many investors had placed at lot of trust in the producers to be their saviors in case of a financial meltdown. This past week has destroyed that confidence. As Jim McMannis has stated, gold equities will do better in a good market and will go down with a selloff in the marketplace. Investors have ignored this and used the producers as a proxy for the metal in a flight to quality scenario. While the metal may persevere, the image of the mining companies has been shattered. They never worked for the shareholder and with their lack of managerial skills allowed themselves to be exploited by the bullion banks providing the collateral for the speculators, hedgefunds, and central banks. The gold investor has missed the glory of the bull market in equities and at the moment of their triumph and the greatest short covering rally of all time has not made any meaningful money. While the investor falls short, the top execs of the producers issue themselves some options or reprice existing options and walk away with a bundle. The investor not only has been deprived of his pot of gold but is left with diluted shares. Ken

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