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

To: d:oug who wrote (39199)	8/17/1999 10:12:00 PM
From: kimberley	Respond to of 116837

Gold Bears' Picnic Ends In Panic As Price Jumps Source: Daily Mail THE BEARS' gold picnic looks like coming to a sticky end, leaving them rushing to get out of the woods. A sudden gold price turn has wrongfooted short sellers. Any further rise could trigger hefty losses for hedge funds and banks. Some say a bounce to $300 an ounce could push losses to GBP 5bn. Minesite.com, the mining website, warns this could devastate hedge funds and cause losses for lenders and even the Bank of England. Minesite's Charles Wyatt says: 'Some gold loans are unsecured. The risk flows straight from the hedge fund to the central banks.' Gold's financing is complex. Twenty years ago miners began financing future production by selling the rights to it to banks. That left the lenders exposed if the price fell. Since central banks held huge gold reserves that earned no interest, lenders 'leased' some of this cheaply and sold it on the market. It seemed ingenious and pain-free. Then hedge funds and aggressive traders began using the 'gold carry' to short-sell. They profited hugely as bullion plunged from $800 to $250. Now it has rallied to $259, and short positions may be a huge 5,000 tonnes, over two years' output. Nervous central banks have lifted lease costs from 1pc to 3.7pc, shrinking lenders' profits. Conspiracy theorists believe central banks are selling gold to save the financial system. Far fetched, but Rhona O'Connell at broker T Hoare says: 'I wouldn't bet against a $300 price by yearend'. If so, the bears' pain is only beginning. - (Copyright 1999) _____via IntellX_____

To: d:oug who wrote (39199)	8/17/1999 10:24:00 PM
From: Hawkmoon	Read Replies (3) \| Respond to of 116837

Very interesting article Doug. If what he says is correct, then the gold market could get real interesting. However, I imagine that certain CB's will no longer feel the compulsion to adher to the cries of African gold mining nations and will freely sell their gold. If I'm not mistaken, I believe the Swiss could sell their gold at will. That's the problem with these conspiracy theories. They always have an element of truth, but far too many untruths for anyone to really know what the scoop is. The question is... why did Goldman wait so long to accumulate such a position in gold to help Tiger cover its short (assuming the rumour is correct?) They've had all summer to cover that short position since gold plunged on the BOE announcement. Why does Tiger need to take physical delivery when it could have merely covered its short position (or started working on covering it) over the past 3 months as the panic selling was taking place? Why do something so friggin' obvious as accumulating 1/2 the COMEX gold supply unless you were trying to lay a nasty bull trap for the goldbugs?? Some things are just not adding up. Regards, Ron

To: d:oug who wrote (39199)	8/18/1999 8:54:00 AM
From: Hawkmoon	Read Replies (2) \| Respond to of 116837

Doug, I was thinking a bit more about that article you posted and I had a few additional thoughts to add: ... to protect this hoard, Gould paid $2 million to two shameless attorneys to lock up in litigation the assets of the NYGE and countless brokers, as well as to defend the pair from the 300-plus law suits subsequently filed against them. Some of this money also went to Boss Tweed, who through the Tammany Society controlled New York City's finances and politicians..... This strikes me as quite similar to GATA actions. They are trying to ty up Central Bank gold holdings in litigation and political intrigue, preventing the CB's from properly managing their currencies. And then there was this part that just didn't make sense to me: As I understand it, Tiger did what most hedge funds do; they hedged this position. How? Tiger had sold short Gold bullion, and its gains from this short position as the price of Gold slid lower have more than offset the losses on the drop in the NDY stock price. So this guy is trying to convince us that Tiger took a large long position in a gold company, an industry where the higher the gold price the more money they make, then shorted HEAVILY against gold as a "hedge"?? Australia's largest Gold mining company is Normandy Mining (NDY). According to NDY's fourth quarter report dated June 30th, Tiger owned 11.68% of NDY. At present prices, the face value of that position is about US$156 million, surely not one of multi-billion Tiger's biggest positions, but nevertheless, it still is a big chunk of change. As Hutch noted: petty cash. And one that should not be difficult at all to cover. Certainly when your banker has acquired 1/2 the Comex gold supply to help you out (if this story has any basis in fact). Btw, if gold should rise, then that NDY position should climb as well for Tiger, giving them the liquidity to decrease that position at break even or even with a profit. And one last edit. I don't know when Tiger was supposed to have acquired that position in NDY, but here is the 3 year chart for the stock: feist.snap.com finance.yahoo.com So something isn't adding up here, Doug. Regards, Ron