Alex
More on the subject, see Late News Flash at bottom of article.
USAGOLD's
DAILY MARKET REPORT/For Current
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02/3/98
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Gold
295.80
- 7.60
Silver
6.62
+ .36
Platinum
386.20
- 5.80
COMEX Gold
Stocks
445,879
- 18,817
MARKET UPDATE (02/3/98) PM-----Well, we keep saying we'll update
you if anything happens and today we will actually do that................The
various new services tell us that the gold market sold off precipitously today
because "the Korean government collected 170 or so tons of gold." The
implication is that they will sell it. I am at this moment looking at a Bridge
News report dated 1/20/98 saying that the Bank of Korea is likely to buy for
its own account the gold collected from the Korean people. A Korean
central bank official in the same report stressed that "it would not be sensible
to flood the market now as this would not be sensible to flood the market
now as this would reduce the amount of dollars BOK would get in return."
At the same time over the weekend, a report surfaced in Sydney, Australia
and published by a Sydney newspaper that there were rumors coming out of
New York that "a major Swiss bank (was) being forced to buy large
amounts of gold to cover a Korean corporation's default on a gold loan."
And that "several gold loans to Korea were on the verge of default, which
would mean hundreds of tonnes of gold would need to be bought in the spot
market by Swiss and Dutch banks to cover their loans with central banks."
That's HUNDREDS(!) OF TONS!. Keep in mind that Australia tanked the
market be selling 150 tons. There are two important aspects to these
statements that I would like to bring to your attention. First, note that "a
Swiss bank" was now in the position of buying the gold, not the defaulting
Korean corporation. Why is that? Did the Swiss corporation, presumably a
bullion bank, gaurantee the loan. I think the answer is yes. Second, note that
"hundreds of tonnes of gold would need to be purchased in the SPOT
MARKET to cover the loan." Today the spot silver market skyrocketed
36.7› and gold went down $7.60. Could it be that this bullion bank along
with the central banks mentioned are on the hook for a large amount of gold
that they feared would have to be purchased at rapidly escalating prices.
After all, many analysts were of the belief late last week that we were in the
midst of a strong uptrend. Silver goes with the trend and gold tanks. What
happened?? Is it possible that some major players are running gold down on
paper to buy physicals cheap to cover those shorts. I leave these questions to
your own thought processes. If all this true, though, the most conspicuous
conclusion one could draw is that if it is the case the short-siders are playing
for time. If the sellers are few and far between, which is my suspicion, today's
market action might be short-lived (though I wouldn't be surprised to see
carryover in tomorrow's early action). I hold to the idea that gold is scarce
and that the shortage is being masked as a surplus -- a reality that I believe
will surface some day -- perhaps soon..................The only other
explananation I can find for today's downside is a major seller (central
bank?) waiting to be announced, but most of the information we have been
able to gather in recent weeks mitigates against that possiblity. If anything
surfaces, we will update.
LATE NEWS FLASH!!! CNBC just reported that multi-billionaire
financiers, George Soros and Warren Buffet, have purchased one million
ounces of physical silver. It was also announced that Warren Buffett, through
his holding company, Berkshire-Hathaway, has accumulated 130 million
ounces of silver beginning in July 1997 through January 12, 1998. Some
analysts put this amount at 20% of the known silver reserves. Perhaps this
explains why silver jumped 36 cents today to a fresh new high on the
COMEX, and why silver is now trading at $6.78-- up another 17 cents in
the aftermarket. We have also heard that these two gentleman are buying
physical gold as well, but we could not comment on it until the news of their
silver purchase broke. Watch out tomorrow. Prices could skyrocket on all
metals, but especially gold as the shortsellers get caught on the wrong side of
the market.
regards
gmweber |
