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Gold/Mining/Energy : Gold Price Monitor

GDXJ 108.29

-0.9%

Dec 1 4:00 PM EST

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To: John Hunt who wrote (31653)	4/13/1999 9:18:00 AM
From: Ken Benes	Read Replies (1) of 116790

John: It is a common thought on this thread that the price of gold will soar when the shorts are forced to cover their 8000 ton position. This may not be the case. With the world economy improving and the consequent rising of commodity prices, not to inflationary levels but to levels that producers can make some money, the price of gold may in fact rise to the 300 to 340 level indicated by some. This can be done in a very orderly manner. Switzerland, the IMF, and some other large holders will begin selling some of their gold. This gold can be purchased by the shorts to cover their positions. How much of the 8000 tons can be covered in arranged sales. That is the question. I believe many of the reasons that caused the cb's to force the price of gold below 300.00 is dissipating. The gold carry trade provided a lot of liquidity to the worlds markets during the currency upheavals of the past two years. As those battered countries begin to recover and the excesses of the years prior to the decline are overhauled, the need for this artificial liquidity will decline. As has been mentioned many of the emerging markets that were hit so hard were economies based on natural resources. Already, the oil sector is on the mend with the blessing of the industrialized economies, how far behind can gold be. OPEC did not put together the agreement to raise prices by themselves, the process had the blessing of the G7. The fundamental shift by the industrialized nations will spread. Hopefully markets will return to prices based on fundamentals rather than ones set by interference. Ken Ken

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