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

To: Rarebird who wrote (42790)	10/12/1999 1:58:00 PM
From: Robert J Mullenbach	Respond to of 116764

When oil doubled, did not see any Oil company go bust. MARKET REPORT(10/12/99): Day Twelve of the Big Breakout....Gold went into recovery mode this morning up as much as $5 in the early going, up $2.30 as we go to fetch this over to the server........News of the Ashanti merger talks with UK's Lonmin dampened expectations for gold yesterday as traders felt that Ashanti's $570 million short position would not have to be unwound. Ashanti, a company valued in total at about $600 million, is also facing a $270 million margin call with the prospect of that going even higher if the metal continues to rise. Since then a closer look at the numbers and a realization that Lonmin will back off if the hedge book situation is not resolved has lit a fire under the yellow metal again. Beyond that, the market is beginning to wonder how many Ashanti's are out there making the short side of the market a financial minefield for big speculators..................... Conspicuously absent from lists of counterparties damaged in the fallout of mining companies and hedge ablaze in the gold carry trade inferno: London's N.M. Rothschild, the centuries old gold trading firm usually thought of as the center of the gold universe. Conspicuously present on that list: Wall Street's Goldman Sachs and Morgan Stanley along with Union Bank Switzerland.........................Says one London dealer this morning: "What's driving gold is still the fear of further moves to the upside. There are still positions that have to be adjusted as they are not going to go away unless gold dips back $40, which it's not going to do. The higher it goes, the more some will have to focus on what they have to do." ...Oh, the life of the London gold trader!..................Gold was up $5 in Europe overnight on bullion bank buying presumably to cover their short positions associated with the carry trade. Bullion banks are the guarantors of gold loans to the central banks. If Ashanti, for example, bellies up, their bullion bank counterparties will have to make good on the gold loans..........By the way, trading has been halted in Ashanti shares ostensibly because of the merger talks, but in reality so investors don't drive the price through the floor.... usagold.com PANIC TIME,