To All wondering what's going on with the Gold Market, hope this sheds some light on what maybe going on!
NEW YORK, Nov. 12 /PRNewswire/ -- The following is being issued by Gold
Newsletter:
Noted international gold market analyst Frank Veneroso said today that
Bundesbank disclosure
of massive gold loans ''confirms our view that the global gold market
deficit is 700 tonnes larger
than consensus estimates and that the aggregate short position in the
gold market is too large to be
covered... This is the beginning of a reappraisal of the gold market that
will slowly unfold...''
Veneroso said that the very large amount of current gold forward sales,
short sales and central
bank gold loans is forcing a day of reckoning in which the demand for
gold to cover all of these
positions will overwhelm current supplies, greatly disrupt orderly
markets and send gold's price
soaring. This analysis springs from Veneroso's ongoing study of actual
central bank gold loans
which, he has concluded, are materially higher than official estimates.
Veneroso's research shows that official and private gold loans total
8,000 tonnes, far more than
the 3,000 tonnes that most analysts project. To put this in perspective,
annual global production of
gold is approximately 2,400 tonnes. This research has been developed and
reported over the
months in Gold Watch, a fax advisory service published by Veneroso, and
in Gold Newsletter, an
investment newsletter published by James U. Blanchard III, based in
Jefferson, Louisiana.
Germany's central bank, long recognized as one of the strongest
supporters of gold in the central
banking community, has just disclosed to a German newspaper that it has
loaned on the order of
10 percent of its gold reserves to the market.
This admission, long suspected by Veneroso but not proven until now,
supports his findings of
huge central bank gold loans overhanging the market.
Regarding the recent crash of the gold price, Veneroso attributes ''mad
dog selling'' by European
central banks which are anticipating new gold sales rules and
prohibitions to be established by the
emerging European Central Bank in April 1998. European central banks are
taking their last
opportunity to dress up their books for admission to the European
Monetary Union by selling
gold.
The balance of Veneroso's research and findings will appear in a
comprehensive new annual study
of the gold market, The Gold Book, to be published by Gold Newsletter and
Veneroso
Associates in January 1998.
SOURCE: Gold Newsletter
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