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Gold/Mining/Energy : Gold Price Monitor

GDXJ 105.34

+5.2%

4:00 PM EST

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To: Alex who wrote (8465)	3/18/1998 12:56:00 PM
From: Alex	Read Replies (1) of 116767

From USAGold site................. MARKET UPDATE (3/18/98) AM---- In the gold market this morning, COMEX gold stocks are up a whopping 89,484 ounces. The Belgians announced that they had sold an additional 299 tons of gold from its reserves in the past few months. The sales were channeled through five other central banks. This explains gold's rangebound behavior in recent months. There is another rumor floating the market that Netherlands was selling gold as well. Both had said previously that their gold reserves were high relative to needs for the upcoming European Monetary Union. Gold expert James Turk points out in the March issue of Gold & Money Report that he suspected "the Dutch and/or the Belgian" central banks of selling gold forward earlier this year for delivery in March. Perhaps it was the Belgian bank and not the Dutch doing the selling. We would have to assume that the 89,484 ounce uptick at COMEX has to do with that contracted delivery. Says Turk, "It has been my contention -- which was well stated in these letters in the ending months of last year -- that central banks dishoarded some 500-800 tonnes of Gold in 1997. This weight of Gold equals about 25% to 40% of annual production, so it would be a considerable amount of Gold for the market to absorb." He goes on to say that "the low Gold price is an aberration resulting from one-off central bank transactions which are now complete, and that higher prices will return this year as the market recognizes that further European dishoarding is unlikely." Keep in mind that lease rates have jumped since the sales have completed adding credence to Turk's argument. After the dust settles, it will be interesting to see what the gold market decides to do. As he points out, 71% of the voting power in the new EMU resides with Germany, France and Italy, who also own 73% of Europe's gold. Gold policies from here on out should be decidedly bullish in Europe. Central bankers and finance ministers from all three countries have come down in favor of gold playing a central role in the euro. Mr Turk ends with this: "As the market begins to recognize the importance of the pro-gold view of the 'big three'...higher gold prices will likely be the result....I still expect 1998 will prove to be a good year for gold." Have a good day fellow goldmesiters. This will likely be it for the day.

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