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Gold/Mining/Energy : Gold Price Monitor

GDXJ 101.44

+3.5%

4:00 PM EST

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To: Crimson Ghost who wrote (5502)	1/9/1998 5:01:00 PM
From: John Stopforth	Read Replies (1) of 116756

George The key is interest rates. If the Fed refuses to lower rates at their next meeting, the stock market has a lot farther to go on the down side. This would just delay the inevitable decline in rates and the increase in the price of gold. It would in fact make the possiblity even greater. If the Fed decreases rates a quarter of a percent, there will be a temporary slowdown in the market decline and a move of gold back up to $300/ounce. This is what I perceive as the next move. With the decrease in earnings however the market will decline even further. The Fed will have to lower rates at least three quarters of a percent to calm the markets which I think is unlikely at present. When rates are lowered in future months the dollar will weaken and gold will rise. I've been following the Fed for ten years now and this is the first time, IMHO, they have dropped the ball. John

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