Anglogold contributing to the low price of gold? This from Bill Murphy......
Anglogold of South Africa claims to be the world's biggest gold producer. In the fourth quarter last year, though the price of gold was below $300 and at rock-bottom levels, Anglogold raised its hedge position to 11.8 million ounces from 8.1 million ounces. That is a dramatic increase, and it means that Anglogold flooded the market with gold in the fourth quarter.
The press release circulated by Anglogold in North America made no mention of this extraordinary selling of gold. It was mentioned only in South Africa, where Anglogold is required by law to disclose such sales. Even there Anglogold did not make its extra selling clear; analysts had to review the company's information carefully to figure it out.
Anglogold's recent commentary about the gold market failed to highlight the company's own flooding of gold to a depressed market as a big factor behind the stagnation of the price of gold.
To top it off, some major contributors to the World Gold Council met last November, supposedly to discuss the problem of gold leasing. Anglogold took the subject off the agenda.
Our economic dream team member, John Brimelow, was Johnny On the Spot and alerted us the shenanigans of Anglogold. Today, John sent out the following:
Anglogold hedge increases 46% in 4th quarter 98
Comparisons of the data table published ( in SA only ) by Anglogold reveal that forward sales rose 45.5%, by 3.7 million ounces, to 11.847 million ounces as the result of forward sales made in the final quarter of the year.
The "aggregate of dollar priced contracts" actually fell, from 66% to 59%. This seems to suggest the proportion of gold sold through to the rand ( e.g. rand price fixed ) rose some 81% or 2,169,000 ozs. To 4,857,000 ozs.
U.S. shareholders might like to consider why this information, obscurely released in South Africa, has not been made available via American channels in any way.
Over the past several months we have reported to you that Goldman Sachs has been a major seller of gold at strategic points in time. They were also running around South Africa last fall offering credit terms to producers to sell gold forward that were practically unheard in terms of their leniency.
It is with that in mind that we note the following that was sent to us from www.lemetropolecafe member, yukongold: " I found in Anglogold statements that they retain the services of Goldman Sachs ( London ) & Merrill Lynch ( London ) to act as independent financial advisors". London is the bullion capital of the world.
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