International Precious Metals (IPMCF) Message Board

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Gold/Mining/Energy : International Precious Metals (IPMCF)

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To: TheBusDriver who wrote (3075)	2/28/1997 8:40:00 PM
From: go4it	of 35569

Wayne and all : I wanted to share a post with you by George S. Cole from the kitco discussion forum. If you wanted to play Hewlette-Packard and say "what if", it just might get that "CAP" trigger finger a little itchy. The failure of the gold shares to keep up with bullion on the upside is not surprising in view of their earlier failure to follow bullion down. I do think though that the shares will soon perform somewhat better relative to bullion. If April gold hits my target of $375, I would expect the XAU to break 130. Gold mutual fund performance varies tremendously. Note that some soared last year despite the smash in bullion and XAU. Recent weakness in BRE-X has hurt some including the 2 Fidelity gold funds. TO ALL: If Republic Bank was indeed responsible for the last minute jump in gold today, THAT WOULD BE MOST UNUSUAL. Their closing quotes for spot gold are almost always below the COMEX. My instinct is to follow APH's advice and sell my gold funds if the target of $375 is reached. A big retracement of this advance is what one would normally expect. But a little voice keeps telling me that SOMETHING VERY BIG MAY HAPPEN QUITE SOON. Frankly, I'm not sure now what I will do if bullion hits $375. Below is today's GOLD TRUST REPORT. They are even more bullish than Arden. All serious gold investors should subscribe. THE GOLD TRUST NEWS REPORT Feb. 28th, 1997 -- Issue 1997 - No. 166 Market Closes Spot Gold- $364 April Gold- $365.10 up $4.10 March Silver- $531 up 6.7 cents TECHNICALS Uptown! The bears are in full-scale retreat. For two weeks that shorts have been trying to hold gold down to no avail. Even when they have been successful at selling the close , we have been coming in higher out of London. Today they tried again all day and got caught as gold erupted on the close to finish powerfully. It rallied $4 in the final 15 minutes. $371 is in reach. If that number is breached our short term target of $380- 400 makes sense to us. We bet that sounded far fetched when we predicted that area last week. Silver is also no surprise to us at all. Much higher prices are in order. Platinum traded over $400 for a brief while today. Why not gold? We have been right on target predicting that Platinum and Palladium would lead gold and silver. FUNDAMENTALS Rumors surfaced yesterday that the Bank of China bought 700 tonnes of gold on the lows. On February 14 we said with all the hedge fund shorting " There must be a big buyer out there or gold would be priced at $300 not $340 ." Turns out we may have been right. If the Chinese bought anywhere near this much, that would mean the central banks are net BUYERS, not sellers, to the tune of as much as 400 tonnes. The Dutch sale was only 300 tonnes. Think on these things.We also have been telling you that the hedge funds could be short as much as 1800 tonnes.The supply-demand deficit is probably 1000 tonnes per year at this point in time. Do you get the picture? We have the potential for a real explosion.The central banks in total may have taken 400 tonnes out of supply not added 300 to it. That is why the bears attempt to keep the price down is not working. There is a shortage of gold. Again, we have been telling you so for weeks. Platinum breached $400 to the upside because of Russian supply problems. Gold could breach $400 because the hedge funds cannot find the gold to cover their shorts. Remember they have borrowed the gold from the dealers. The banks have lent money to the shorts to borrow the gold. The higher the price of gold goes, the more nervous the banks are going to be about the solvency of their loans. There is the possibility that a panic could develop if gold goes into a parabolic up move. Sweet dreams anyway. Ours is that gold hits $425 before a major correction occurs. THE GOLD SHARES The gold stocks are still way ahead of bullion. The divergence of their failure to follow gold down was another indicator that the bullion price was a fabrication of hedge shorts. The XAU closed today at 122.46 up 1.02 and is poking its way through its 200 day moving average

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