Strictly: Drilling and oil-field services Message Board

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Gold/Mining/Energy : Strictly: Drilling and oil-field services

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To: Think4Yourself who wrote (66474)	5/18/2000 10:29:00 AM
From: que seria	Read Replies (1) of 95453

Q, Slider, anyone with a take on EEE now? I'm in with an entry position this morning. I see it as a solid medium and long term play on a continuing strong NG pricing environment. The market will discount the hedges coming off in the Fall--I would think fairly soon. It seems to meet this concept: Rotating to laggards with good fundamentals has allways been right ~ . . . and there aren't many such NG plays that haven't taken off. There's a lot of baggage in the closet but I see Duke as a good bet to put things right. OT gold: I think Slider's diagnosis of the macro factors favoring a rise in gold is right on--but the better thinking bugs have been saying versions of that for a long time, before and since the 1998 troubles and the subsequent near-confirmation that central banks, hedging/forward selling producers, and houses such as GS and MSDW have been papering over the consumption of physical gold above production levels. What surprises me is Slider, with such finely honed trading instincts, buying into this story without his otherwise cogent posts identifying a catalyst to move the gold price. It seems he sees the Fed behind the curve as the catalyst, but I think aggressive (even if late) determination to raise rates is negative for gold. Why will big players hold it when opportunity cost (measured by interest rates) grows, and the Fed seems determined to snuff inflation? Perception is what matters here. I used to own many gold stocks but tired of the opportunity cost of waiting on a threat to fiat's perceived worth. I believe the US dollar has to be fading before gold will rise--don't see signs of that. The paper trade that's been going on for years may be showing strain, but I don't see any sound basis for expecting it will blow up in the near or intermediate term. Gold is all about market psychology, but its fundamentals have been so constrained by central banks and producers' hedges/forward sales that they barely have a role in affecting that psychology to investors' advantage.

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