Caussa Capital (formerly Antares) T.CAU Message Board

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Gold/Mining/Energy : Caussa Capital (formerly Antares) T.CAU

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To: john who wrote (2201)	1/10/1998 10:27:00 AM
From: JD	Read Replies (1) of 4718

Commentary on Au/Ag markets. Excerpt From USA GOLD daily commentary. Very interesting reading for ANZ investors. usagold.com Quotes ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ MARKET UPDATE (01/09/98) AM-----Gold dropped again this morning to below the psychologically important $280 mark but then recovered somewhat to hover just above $280. In London, gold hit $278.70. Silver got hammered yesterday and fell another $0.16/oz today before rallying. From a technical viewpoint, today silver bounced off its 40-day moving average at $5.61. Heavy buying and volatile trading are the words we are hearing from the silver pit. Yesterday, we reported that a group of buyers involved in the silver market were taken by surprise by the amount of silver available in the physical market despite reports that actual physical silver supplies were waning. COMEX silver stocks dropped another 23,000 ounces overnight. Physical gold on the other hand remains tight with COMEX gold stocks dropping another 1,621 ounces overnight. Looking back just to October 1997 and the warehouse stocks stook at over 918,000 ounces. Go back one year and they were at 1.5 million ounces. Thus, it is easy to see that the lowest gold price in 18 years is stimulating demand. What will happen to the gold price when the warehouse stocks are nearly depleted?? We think that a price explosion is just ahead. Gold prices must go back up to where mines can produce at a profit and be able to replace all of the gold they borrowed from the central banks!! One point which everyone in the media misses is that the central banks have lent more gold than they have actually sold. A loan of anything implies that it must be repaid in kind. Now if 80% of the gold mines cannot produce gold at a profit and thus must shut down, then how in the world will they ever be able to replace the borrowed gold? With this understanding, it now becomes clear why gold is at or near its low point, and that a huge short-covering rally lies ahead. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Personally, I feel that if the price of gold is being manipulated down then it is likely to not be allowed to recover until projected mine closures are carved in stone and the weaker elements are completely shut down .... lots of co's at risk at the moment but not a wnough of them them shut out so completely that they wouldn't be able to recover if POG comes back up. If the manipulators are trying to maximize their positions long term they'll force as many players out of the game permanently before collecting their 'rewards'. IMHO I think there will be more volatility in the metals before the golden age begins again. JD

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