May 11, 1999 - Yesterday, the central banks of two major countries announced they would NOT be selling any gold. It is getting very little attention. See if you can find out who they were!
Tonight's Commentary
We're getting a lot of questions about gold and the markets and the reserve banks of certain countries. We have published for several months now, links to the Gold site comments and GATA suit filed for manipulation.(www.indocan.com) It seems that the British have opened themselves further to this suit. Announcing to sell 415 metric tons of gold over the next three or four years is ridiculous and clearly manipulative.
Who telegraphs their sell intentions, unless required to do so? They are not so required. Governments have dead money in gold and want to use it to lever into income somehow. I smell world financial crisis!
Many countries have leased out their gold or sold short in the market. They could get very offside if the gold price goes up just to $325 USD. The only reason someone who appears long a metal would not want it up is because they have sold short against the box!
"Gold mine production in 1998 was about 2,529 tons. Gold
demand was about 4,130 tons. That left a production
deficit of about 1,600 tons. Gold Fields Mineral
Service estimates that central banks sold about 450
tons last year."
The British selling 450 tons over a period of years is meaningless to the gold market as industrial demand is outpacing production by 1600 tons per year, each of the last three years running. They do want to cover their short position, as the GATA suit is real and will cost them in the long run.
Futures markets are fickle and swing wildly on small news. Something that big, which will unlikely actually happen, can make the market swing hard.
May 10, 1999 - Gold futures continued their sharp descent Monday on the New York Mercantile Exchange amid fears world governments, which control about 25 percent of world supply, will begin a selling frenzy in coming months.
Gold tumbled 1.9 percent as market participants continued to react nervously to the United Kingdom's announcement last week that some 415 metric tons from its 715 metric-ton stockpile will be sold off in coming years as the government moves into better-yielding bond investments.
Britain's decision caused a measure of calm because officials made an announcement before taking action, but investors are worried other governments will begin dumping their reserves without notice in a bid to make the biggest profits before others join in.
Since 1990, central banks in the Netherlands, Austria, Belgium, Argentina and Australia have sold some of their holdings all without prior warning. There are fears now that other European countries and the new European central bank will do the same. (AP)
May 8, 1999 – You'll all be glad to know that Indocan's gold is safely in the ground where it has been for billions of years. It's a good thing too, if we had it sitting in bullion form like some central banks we may be tempted to sell it off and purchase packages of interest bearing bonds. |
