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

To: Ken Benes who wrote (48233)	2/6/2000 6:41:00 PM
From: Vitalsigns	Read Replies (1) \| Respond to of 116762

I don't know if you guys have seen this but well worth the read; Also this chart is intriguing in that the Gap In September was never backfilled ( a bullish sign) , Fridays spike in Gold did not happen by chance. The announcement by PDG was not enough to cause this spike, I believe we will get the real reason soon enough. Fridays activity may in fact have started the Short Squeeze of the century, but My gut says we will have to wait a little bit longer as we may get another Surprise CB gold sell announcement this week to quell the rally. These breakouts seem to be happening more often these days and are a sign that this will explode very soon and that nothing will stop it. securitytrader.com Message 12790757 Trading around $280 in April 1999, gold is below the total cost of production for many mines and not far above the cash costs of quite a few. What is more, annual gold demand is now almost 4000 tonnes, exceeding annual new mine production of 2500 tonnes by almost 1500 tonnes. This deficit, building over several years, is largely filled by sales of gold leased from central banks by the bullion banks. Analysts trying to calculate the net short gold position of the bullion banks in early 1999 are coming up with some astonishing figures, some as high as 10,000 tonnes, equivalent to four full years of production. More from the article Given a sharp spike to $370/oz. or thereabouts, many believe the gold banking crisis would spiral out of control. Each periodic British auction is for 25 tonnes (803,750 ounces). At $370/oz., an entire auction could be had for less than $300 million, a trifling sum in modern finance. That may seem like a large premium to current prices of around $280-$290, but many gold analysts peg the true equilibrium price of gold today at between $500 and $600. Add in rumors of difficulty finding physical gold in size, and 25 tonnes of deliverable physical gold at $370 could almost look like a bargain. In any event, anyone -- friend or foe -- with a spare $300 million who cares to bid $370/oz. for the full amount of the next British auction could more than likely crash the gold banking system with consequences far more serious than those threatened by the failure of LTCM. Not long ago Marc Faber publicly suggested to Bill Gates the investment merits of switching his almost $100 billion of Microsoft shares into gold. M. Faber, "An Investment Tip for Bill G.," Forbes, Nov. 29, 1999, p. 248, also www.forbes.com/forbesglobal/99/1115/0223099a.htm. My advice to Bill G. would be a little different: Start buying gold, leak that you are doing so, watch the price rise and governments sweat, bid early and high at the next British auction, and wait for a settlement offer you really like. No reason not to have both Microsoft shares and gold. Since the government likes free, unfettered markets, give them one -- in gold. The next auction is March 21, 2000, a date perhaps uncomfortably close to the ides of March for bullion bankers and would be Caesars. Vitalsigns

To: Ken Benes who wrote (48233)	2/6/2000 6:55:00 PM
From: Zardoz	Read Replies (1) \| Respond to of 116762

Investors do not purchase gold stocks because of low pe's, cash on hand or any of the other usual fundamentals that can be applied to investing in most other equities. Ok, but that is only part of what goes into valueing a gold company. Buyers of gold shares want leverage to an increase in the price of gold during periods of uncertainty. Buyers of gold shares want returns on investment. Anyone suggesting leverage, safety, preservation of capital; is lying. Leverage would best be done in currencies, safety into cash {or gold if you are so inclined; which is really a currency hedge}, and to preserve capital: CASH is king. This move on friday was, amusing to say the least. It goes to show that many here, and elsewhere make a direct connection between: no further hedging; and closing a hedge {when none exist!!!!} The ironic part is, that what occurred in Sept and friday, is still playing into the hands of the shorters'. When I said that before, gold was at $329. Gold then found a way to fall to $275 {-$54} Hutch I know what I'll be shorting this week

To: Ken Benes who wrote (48233)	2/6/2000 7:18:00 PM
From: goldsheet	Respond to of 116762

> Investors do not purchase gold stocks because of low > pe's, cash on hand or any of the other usual fundamentals >that can be applied to investing in most other equities There is only on "normal" financial measurement I think applies to producing gold equities - price-to-cash flow. I've previously mentioned that in a capital intensive industry cash flow is more important than earnings. A P/CF ratio of about 10 seems to be where some of the major producers are trading; MKT CAP CASH FLOW RATIO Barrick 7479 702 10.7 Newmont 4018 402 10.0 Placer 3618 427 8.5 Not an exact science, just an observation.