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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: bobby beara who wrote (22659)	8/11/1999 2:40:00 AM
From: Berney	Read Replies (1) \| Respond to of 99985

bb, Re: "you ignored my line in the sand." Remind me not to do that again. <g> The real fireworks are probably about a week away. Berney

To: bobby beara who wrote (22659)	8/11/1999 7:40:00 AM
From: kimberley	Read Replies (2) \| Respond to of 99985

Bobby and Heinz, did you see this? MERRILL LYNCH RECOMMENDS PURCHASE OF FOUR SOUTH AFRICAN GOLD MINING SHARES: A report from Merrill Lynch released on Tuesday, August 10, 1999, stated that sentiment in the gold market is changing and the gold price should rise in the short term providing that contangos remain low. Merrill Lynch said this could be a good opportunity to buy gold shares, and recommended Gold Fields Ltd. (GOLD) and Harmony (HGMCY). For higher risk players, they recommended Randfontein (RNDEY) and Durban Deep (DROOY). [Three of the four are in my model portfolio; I have hesitated to recommend Randfontein because it does not yet have a liquid market outside of Johannesburg.] Merrill Lynch said the change in sentiment toward gold comes amid two pieces of bullish news: first, the IMF is reconsidering the sale of 300 tonnes of its gold reserves to fund debt relief; second, since April 1999, 1-year forward gold lease rates have climbed from 1.5% to 4.0%. Says Merrill Lynch, "There is clearly a tightness in the market, which has driven up the lease rates to current levels. Reasons for this tightness are unclear at this time, but could be caused by stronger industry demand for gold, or a lowering of supply from central banks." The report said the lower contango [the difference between the price for spot gold and for gold futures in any given future month] provides less of an upside for producers to hedge, as the forward curve has been halved in the last 4 months. "For short sellers, a lower gold contango of 2% means that it is less attractive on a risk reward basis to sell gold. They may take profits." >> goldminingoutlook.com