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Politics : Dutch Central Bank Sale Announcement Imminent?
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To: Bill Murphy who wrote (2575)12/12/1998 4:18:00 PM
From: Crimson Ghost  Read Replies (5) of 81084
 
The gold market seems to be completely unglued because of all the manipulation. Friday was the first time I can remember when POG plunged the day after the XAU soared.

There seem to be two different views on the role of gold in the modern world. Supply-siders like Jude Wanniski believe that the gold price serves primarily to indicate if Fed policy is inflationary or deflationary. They feel POG should be around $350. In fact supply-sider Jack Kemp who plans a Presidential run in the year 2000 will make a $325-350 gold price target one of his major economic planks.

Other such as Bill Buckler at the Privateer argue that gold's primary function is to serve as an alternative to the fiat monetary system. To the extent that central bankers accept this, the lower POG goes the better.

Of course the gold situation has been complicated by the enormous short position. Even those who favor $350 POG might be afraid that the short position is so large that the price could soar far above $350 if the downtrend is broken.

I think Tom Byron is dead wrong on the gold/CRB relation. Gold leads the CRB, not visa versa. The CRB is only now catching up with gold on the downside. At some point gold will lead the CRB back up again. But not until the free market takes over from the manipulators.
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