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Gold/Mining/Energy : Gold Price Monitor -- Ignore unavailable to you. Want to Upgrade?

To: Alex who wrote (35454)	6/17/1999 6:58:00 AM
From: long-gone	Read Replies (1) \| Respond to of 116764

All, Just got this E'Mail Reply to one I sent yesterday. Dear Richard: The public funds are all acting independently based solely upon the technicals. Their positions flip back and forth and not simply short gold long-term. A conspiracy would require a coordinated efforts between a group of public funds and that is unlikely to be the case. Gold is a small part of their portfolios and they trade everything. Right now, the open interest in gold has risen sharply on the COMEX and this is being attributed by the floor as "fund selling". Most would probably cover their shorts soon and may even attempt a long position. I do not see the issue as a manipulation since we are dealing with a global combination of a strong dollar, which is deflationary for commodities, and an environment where investors as a whole are simply not interested in gold when they can get rich quick in stocks. These things have a tendency to change direction. The very same people many are blaming for the demise of gold today will be those who turn around and become the buyers tomorrow. If gold were the ONLY commodity moving lower and the economy were set up differently in favor of commodity investment, then there might be a case. Likewise, we argued AGAINST the Hunts as manipulators for the very same reason that everything was pointing higher for commodities going into 1980. To me, a manipulation is when a given individual market is acting abnormal from the group sector in which it resides. So far, we see no evidence of a manipulation but merely a change in reserve policy for gold among the central banks. It would be nice if they sold everything now even if that meant gold fell to $100. At least, the trend would then change and we never have to worry again about central bank intervention. Yes it is painful for the mining community. However, at the peak in the cycle people are opening gold mines in their backyard like the internet today. At the bottom of the cycle the weak fall and closures become commonplace. That eventually reduces future supply and the price rises again until over competition once again abounds. All things operate in this manner. It has taken 12 years since the 1987 S&L real estate bubble before we are just now seeing signs of speculation once again in new office buildings. Eventually, there will be a glut of office space and the next contraction will be underway. Gold seems to make a low fairly regularly every 8 years. The next target is 2000. If gold moves lower after 2000, then it is in serious trouble. Most bull markets come back to retest the previous high of the last cycle. That level still stands at the $200 range. A fall to that area is by no means bearish from a long-term perspective. If gold fails to hold $185-$200, then pehaps a complete meltdown may take place. So far, there is no indication that such a trend will develop. However, if the world economy continues to contract leaving the US as the ONLY haven for capital, then the dollar will soar into 2003 and gold may indeed move into a very serious low. This remains to be a seen and it is mentioned as a possibility - not a forecast. Martin Armstrong