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To: Glenn D. Rudolph who wrote (74903)	8/23/1999 3:03:00 PM
From: GST	Read Replies (2) \| Respond to of 164684

OT -- Glenn <Could we visit this a bit more? Supply shortage is what I do not see. Please explain> This was with reference to gold. The bulk of the trade in gold is not in transactions involving 'the physical'. Think of the gold market as largely a derivative market. The market for the metal is subject to over or under supply -- and the thinking is that is in over-supply. But do keep in mind the derivative aspect of the market as well. The sharp increase in gold demand combined with IMF supply likely not showing up is part of a drying up up the metal. The derivative market has been tilted towards abundant supply. As 'the float' gets bought up by GS et al, there is a tightening that forces the specs to close out shorts and for everybody to try the long side. At that point there is short covering, new demand, and spec long positions coming into the market. We are nearing that inflection point. The metal is about to become 'scarce'.