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Gold/Mining/Energy : Gold Price Monitor

GDXJ 109.28

+3.8%

Nov 28 4:00 PM EST

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To: Albert V who wrote (5862)	1/14/1998 6:17:00 PM
From: Robert Floyd	Read Replies (1) of 116790

Why is gold dropping? In my opinion: Part of the reason is that selling gold seems to be the way Asian countries are raising dollars to meet their dollar cash requirements. With the big sell-off of gold by these countries, the supply of gold on the market is too high, leading to the drop in gold prices. The fact that gold is dropping feeds on itself and this too causes gold prices to fall. Momentum kicks in and panick takes over. I am not surprised that the current situation has caused gold prices to drop. Part of the reason is that the faith in gold has been diminished, with several countries choosing to sell most or much of their gold reserves. If a product is to demand a price higher than would be required for an industrial commodity, it is able to do so only if the purchaser places additional value in it. Gold has lost a great deal of its shine and will act more like a commodity than an investment strategy in the future.

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