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Gold/Mining/Energy : Gold Price Monitor

GDXJ 136.00

+6.2%

Jan 20 4:00 PM EST

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To: Rarebird who wrote (60092)	10/24/2000 3:25:20 PM
From: Ken Benes	Read Replies (1) of 116895

Total capitulation for the following reasons. 1. because of the complexity of the hedging techniques employed by the producers, investors are no longer certain that they will benefit by a rising gold price. 2. the producers thru overproduction, and leasing gold have flooded the market with supply. 3. investors have lost faith in the management of the producers. 4. the volatility associated with the commodities markets have been rung out of gold thru the use of derivatives instruments(selling gold short as it rises above 280 and covering those positions as the price sinks. 5. a strong dollar. 6. an awareness that as gold trades as a commodity the equity prices of the producers will be revalued using lower multiples, and discounting reserves in the ground that may have been leveraged in elaborate derivative positions. Do you need any more. The decline will continue unless and until supply and demand are more in line. This cannot happen until supply contracts. The plan by the producers to peddle jewelry/gold over the internet will not eliminate the oversupply. Ken

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