Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Richard Mazzarella who wrote (48069)	2/5/2000 10:38:00 AM
From: Ken Benes	Read Replies (2) \| Respond to of 116944

The main point worth considering about Fridays spike in gold prices, what is behind it. First, we have the undefined dislocation in the bond market. There has been damage, but it is not clear how large and to whom. Assuming that some institutions have experienced large losses, they may have been forced to close out other speculative positions to raise capital or reduce overall market exposure. Secondly, Fridays employment report was not good putting pressure on a bond market that had plummeted for artificial reasons, reduction of outstanding 30 yr instruments. Finally, Placer declares a moratorium on hedging after gold had risen about 10.00. The gold price explodes. Looking forward, with a continuation of a rising gold price, the hedgebook problem we saw in October will reappear threatening some producers and the bullion banks. Further loses to the bullion banks will compound their bond trading losses. In the past with this kind of risk in the markets there has always been a fix. With the producers withdrawing from the hedging market, one leg of capping the gold price is lost. The BOE story is old news, Kuwait has made gold available for leasing and there may be others in the days ahead, however, with leasing gold coming under scrutiny there may be no takers. The last resort an outright sale. Who will sell and how much gold do they have. We know that the cb,s have approximately 32000 tonnes of gold on the books, but how much sits in the vaults. A direct movement of gold bullion may be required to cap the market in the weeks ahead. Issuing paper gold in a market flooded with paper will not due. Who has the gold and are they willing to put it on the market. The final and biggest question, will the producers support the price of gold by purchasing non mined gold filtered into the market to close out their existing short positions. One thing is certain, it is very late in the game, can the producers rise to the occasion. Ken

To: Richard Mazzarella who wrote (48069)	2/5/2000 10:40:00 AM
From: russwinter	Respond to of 116944

I think the fundamental factor of inflation creating the investment demand that Enigma was alluding to is what will create the longer sustained move. Also most investors jump on bandwagons after the fact. But, right now the old technical underpinnings of the gold market are so out of wack that there is no way this can be played out as a "flash in the pan"(inferno perhaps). There are so many people on the wrong side of the trade, that a scramble has to take place. Producers have already sold the next four years of output. Now you have the prospect that in aggregate the whole year of 2000 might not see any forward sales, just deliveries on old contracts. That's pretty powerful technicals. The wild card, as always, is government intervention. But that's like putting a finger in the dam. Also politically, how will it look to English voters when they realize their treasury gave away gold at the bottom? Or the Dutch. These two banks are also going to be discredited. And then this practice (giving away gold for dollars for example) will stop. Somehow I think that if this thing gets rolling Easy Al Greenspan will try to intervene. I just don't think he can succeed for long.

To: Richard Mazzarella who wrote (48069)	2/5/2000 11:43:00 AM
From: goldsheet	Read Replies (1) \| Respond to of 116944

> Will there be carry through, is this the new gold bull market, or just a flash in the pan? Gold has fooled us many times before with bear markets rallies, most recently in September 1999. The gold chart is starting to look like an inverse head and shoulders bottom. We really need to stay over $300 this time and a move to the $325 area would really complete the pattern.

To: Richard Mazzarella who wrote (48069)	2/5/2000 6:32:00 PM
From: William H Huebl	Respond to of 116944

From a TA standpoint, even though momentum and a few other indicators on a weekly basis seem to say "buy," I would want another week for Accumulation, CCI and a few other assorted and sundry weekly indicators to show a breakout.