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

To: lorne who wrote (45425)	11/30/1999 10:54:00 AM
From: Giraffe	Respond to of 116768

especially liked this bit: Twenty-five tons, just to put it into context, is about 4 percent of the daily volume in gold on the London exchanges. So it's really a fairly small amount. It's the sentimental connotations that such an auction would have. We're looking at fundamentals of the market and what we're seeing is the fact that companies have been in a lot of pain for the last two years. They haven't had the money available for capital development. Consequently, they aren't able to keep production at current levels and so would anticipate that there's going to be a drop in production over the next couple of years. Supply is going to fall from primary sources. And on the demand side -- gold demand has out-striped supply every year, save one, for the last ten years and that supply-demand gap has been met by one of shocks to the system and it's usually in the order of 400 to 500 tons of gold, not the 25 tons of gold that the Bank of England has been providing. So, looking out on the market with this 400-ton difference in supply/demand, a decrease in primary supply, we think the gold market looks very good looking out from here. I don't think the Bank of England sales are big enough to severely impact the market unless there is a lot of sentiment in either direction.