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

To: long-gone who wrote (41100)	9/27/1999 1:42:00 PM
From: Alex	Read Replies (1) \| Respond to of 116790

Reduced Lending in Market Could Boost Gold Upside Potential <Picture> Sep. 27-MAR-- [B] Reduced lending in market could boost gold upside potential By Andrea Hotter, Bridge News London--Sep 27--Producer selling at the new higher spot gold levels could be reduced following the decision by the European Central Bank to limit future lending activity and physical sales by its members, according to Kevin Norrish of Barclays Capital. The potential for higher prices in the short-term has been increased significantly, he added. * * * The nerves of the large speculative gold shorts are likely to be severely tested over the next five days, Norrish said. "If tighter forward spreads discourage a knee-jerk sell response from producers, prices could continue to move higher on short-covering," he added. One analyst had predicted that spot gold would run into resistance around the US $285 per ounce level--"a price which has played a pivotal role from as far back at 1982 (when it was the low in the correction after the massive rally in the late 1970s)," said Rhona O'Connell at T. Hoare & Co. A period of consolidation is now required, O'Connell continued, adding that although the US market may see prices initially higher, they will come back to start to fill the gap. "We are still friendly to this market and reiterate the view that prices will be in excess of $300 before (and at) year-end," she said. "We doubt that all shorts have yet been covered, but equally it would be surprising if (the US market) were to go careering on upwards in the short term as some sho rt positions would have been covered through international resting orders in the Far East," she added. "The imbalance between physical supply and demand, which we recently referred to as 'the tortoise,' is now starting to make its presence felt over those who have been trading from the short side, in other words, 'the hare'," O'Connell concluded. End Bridge News, Tel: 44-171-842-4138 Send comments to Internet address: metals@bridge.com The Bridge ID for this story is ZRRRWL (c) Copyright 1999 FWN futuresource.com