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Gold/Mining/Energy : Gold Price Monitor

GDXJ 92.99

+2.9%

Nov 7 4:00 PM EST

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To: paul ross who wrote (3823)	12/4/1997 9:35:00 PM
From: Terry Rose	Read Replies (2) of 116753

The way I look at the current gold market is that it is a buyer's market. With the maximum pessimism out there I can sit on my bid on a quality company, and wait for someone to give up and sell to me now for the tax loss advantage. Since I am in an accumulation mode and also long term bullish on gold, any further weakness is to my advantage. What are my alternatives for my excess cash flow? I could remain in cash (U.S. dollar), bonds, or non-precious metal stocks all with definite risks of devaluation due to their current over-valuation. I view my investments in gold as preservation of wealth primarily. Ask anyone in South Korea, Thailand, or Japan if they could go back in time would they not have loaded up on gold before their currency crisis beforehand. Since the U.S. has similar problems, it is inevitable that it will come under pressure. One last thing, as the Japanese overnight lending rate goes up and the yield on U.S. treasuries drops, the gain on the yen-dollar carry trade contracts. At some future point this trade will be liquidated. Since this is free money and has been used to buy stocks a resultant contraction will be felt in the U.S. stock market.

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