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Politics : Dutch Central Bank Sale Announcement Imminent? -- Ignore unavailable to you. Want to Upgrade?

To: Francis R. Biscan Jr. who wrote (6294)	6/13/1999 7:50:00 PM
From: Hawkmoon	Read Replies (1) \| Respond to of 81101

Thanks Francis, I could spend quite a bit of time tearing that article apart, but there were a few points where the author tried to claim that gold was not a commodity like other metals. In other words, the value of stocks and gold depends on the bid and asked prices of a myriad of buyers and sellers. Bonds share this characteristic. Commodities do not. Commodities are consumed soon after they are produced. Their prices are determined solely by current supply-demand conditions Well, we only have to look at copper, silver, platinum, and many other metals to understand that almost the full bulk of these metals are still in existence in some form, raw or finished. Anything that is bought or sold is a commodity, both perishable, and permanent. The price for those goods are governed by supply and demand. Now right now we're seeing a distortion in the demand curve for gold due to temporary Y2K fears, but even though that physical demand is greater than physical production at its current rate, it does not exceed the amount of paper supply that is being forward sold by miners locking in these higher prices. That's right... miners, those who you'd think know the gold market better than anyone else, have sold forward some 10 years worth of supply by some estimates I've read. They have been joined by hedge funds and speculators who also see the handwriting on the wall with regard to oversupply in the gold market and the threats of CB selling. Those same CBs that only hold 30% of the world's gold supply according those authors and are unable to manipulate the POG like Bill Murphy claims they do. So while we're seeing CBs selling in order to meet physical demand calls for gold, again due to those temporary fears of Y2K and the thought that on Jan 1st, 2000, we'll suddenly be living in a post-apocalyptic society, the reality is that the mining companies know full well that a large majority of that physical gold that was sold to the public as gold coins, will be quickly sold back into the market after Jan 1st. The gold companies are taking this opportunity from Y2K to make massive forward sales of gold on paper. The CBs are selling physical gold to meet a short-term distortion in demand. And the individual investor?? The individual investor is being suckered once again by the big boys who are placing all of those ads about Y2K and gold, or the futures brokers who are advertising huge gains in the precious metals market due to Y2K. Be a contrarian.... when the industry is going to such great strides to sell you their physical gold in coin form or through call options, don't think they're doing it out of civic-minded generousity. They want you to buy out their positions. Regards, Ron