Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Claude Cormier who wrote (36127)	6/29/1999 2:40:00 PM
From: long-gone	Read Replies (2) \| Respond to of 116857

Just depends if it supports his position(that day) or not.

To: Claude Cormier who wrote (36127)	6/29/1999 3:07:00 PM
From: Zardoz	Read Replies (1) \| Respond to of 116857

What about Gold Eagle, do you believe them for data?

To: Claude Cormier who wrote (36127)	6/29/1999 3:15:00 PM
From: Alex	Respond to of 116857

Going to Bat for Gold Not many want to listen, but gold-fund manager Gil Atzmon gives some reasons for a modest rebound Gil Atzmon, portfolio manager for U.S. Global Investors' gold funds, doesn't like the label "goldbug." He sees it as a disparaging term for investors enamored of the precious metal who long for a return to the gold standard and believe that gold bullion should be a core holding in any long-term portfolio. By that definition, he's far from a goldbug. Still, Atzmon, who has worked in the gold industry for 12 years as both a stock analyst and consultant, believes gold prices are lower than they should be. Technical indicators he has long trusted made him think gold prices would rise this year -- which they sure haven't yet. From a range of $280 to $290 an ounce late last year, spot prices recently plummeted to below $260, nearly a 20-year low. Atzmon says gold prices normally rise along with Tokyo's Nikkei stock-index average, which started recovering late last year. The two correlate because 75% of world gold demand is for jewelry, much of it bought in Asia, and the Nikkei is "a good proxy for the health of Asian economies," he says. Gold prices also usually start rising about six months ahead of long-term interest rates, which have moved higher this year. "In both cases, the correlations worked well until the end of 1998," says Atzmon. Then rates and the Nikkei both started rising -- and gold started plummeting. CUT SHORT. The culprit? Twice this year, Atzmon says, fledgling rallies in the price of gold were abruptly ended by announcements of potentially large gold sales over the next few years from major government reserves. In mid-March, news of possible gold sales by the International Monetary Fund sparked a steep decline. Then in mid-May, the Bank of England announced a plan to sell a big chunk of its gold reserves over the next few years, which drove prices down to their $258 low. "It's suspicious," says Atzmon, who says he doesn't want to sound like a conspiracy theorist. But he believes that central bankers may have "conveniently" timed their announcements to keep gold from rallying, since a rise in gold prices often sparks fear of inflation. While he says he doesn't necessarily disagree with that policy -- since inflation fears can cripple global economies -- central bankers "can artificially suppress the price for just so long." Many investors believe that central bank sales are just a symptom of the real problem with gold: that its status as an essential part of any portfolio has faded beyond repair. A recent commentary by Business Week's Joseph Weber concluded as much (see BW Online, 6/7/99, "Gold Belongs in Your Jewelry, Not Your Portfolio"). The performance of Atzmon's funds would seem to bear that out: U.S. Global Investors World Gold (UNWPX) is down 20% in the past year and has lost an average of 28% a year over the past three years. U.S. Global Investors Gold Shares (USERX), which invests in larger-capitalization gold stocks, has declined 11% in the past year, and an average of 18% a year for the past decade. $300 AN OUNCE? Thankfully, perhaps, Atzmon isn't arguing that investors should buy and hold gold stocks. Rather, he thinks they should buy gold stocks when they're cheap, and bet on the upside. Atzmon doesn't see gold going back to $800 an ounce, where it briefly traded in January, 1980. But given the current supply-and-demand equation, he thinks gold should be priced around $300. According to the World Gold Council, demand in the first quarter of 1999 was 62% higher than in the first three months of last year, thanks to a 75% surge in worldwide jewelry demand and a 20% increase in investment demand. The next clue to whether gold has bottomed out could come on July 6, when the Bank of England will hold its initial sale of the metal. Some investors say gold is doing just what it should be doing: the reverse of whatever the stock market does. "Gold is one of the few asset classes that is acting opposite of the stock market," says George Dagnino, editor of the newsletter The Peter Dag Portfolio, which recommends a 10% allocation to gold stocks. He isn't worried about inflation or a stock market crash, and he thinks the central bank sales are just a side issue. But Dagnino does think the stock market is overvalued and that a small position in gold makes for a good insurance policy. Along with Atzmon, that makes two investors who believe gold still has some lasting value. Stone is an associate editor at Business Week Online _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ businessweek.com