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

To: goldsheet who wrote (48689)	2/9/2000 1:17:00 PM
From: Enigma	Read Replies (1) \| Respond to of 116770

He stated it correctly - but the inference was something else - as your data so eloquently rebuts - as usual thanks for all of the data. I thought the graph vs. the S&P was illuminating. And the important thing is as always - 'should I buy in NOW - Sell it now, or short it now, or write calls on it now', and so forth and so forth.

To: goldsheet who wrote (48689)	2/10/2000 4:40:00 PM
From: Ken Benes	Read Replies (3) \| Respond to of 116770

Bob: Your analysis of Barrick vs Neumont is on the mark. Prior to the past year or so, both abx and nem offered comparable returns on short term trades. This past year, nem has clearly been a better choice and I have taken advantage of this with successful trades on at least three occasions. As you pointed out, between 1985 and 1993, barrick was an awesome performer as the company quickly developed from an exploration play to a senior producer. The only other company that had similar results during that time frame was fcx with the discovery of the grasberg copper/ gold deposit in 1988. If you were not a trader and it is hard to imagine anyone investing in gold stocks not being a trader, the total return for barrick since 1993 could either be a loss, break even, or a small gain depending upon what price the position was established during that year. This is in spite of the three fold increase in production and cashflow that the company has experienced since 1993. Many individuals who attend corporate annual meetings are buy and hold shareholders. It would appear, the insurrection at Mondays barrick meeting included many of the buy and hold group, whose frustrations bubbled over when the company bucked the trend to declare a moratorium on forward sales. With gold up 10.00 today, the less than inspiring performance of the gold stocks is indicating one or two possible scenarios. First, the market does not believe the current prices are going to hold. Second, gold equities are held in such disfavor, that a more favorable environment for gold cannot attract investment dollars into the group. It is proving difficult to overcome the bre x debacle in 1996 and the subsequent scandals of that period followed by the realization that the forward selling by producers exacerbated poor market conditions. We are in a critical period for gold. With gold moving above 300.00 we can make some observations. First, the reprieve of producer forward selling will reduce the supply available to the market. Second, the gold market can expect a drop off in demand by buyers who believe lower prices will return in the near future. Finally, with the market being in deficit, the cb's limiting their sales, and the producers reducing new hedges, will these factors offset the drop off in demand with a big intangible overhanging the market, will the speculators and forward sellers be forced to cover their positions. If the producers deliver into their positions, the amount of deliverable gold should fall with the anticipated reduction in demand. This affords the market an opportunity to adjust to higher prices and open the way for gold to trade in one of its roles, as a commodity. Without artificial interference, gold will have the opportunity to establish an equilibrium price. I do not agree with those forcasting 500 to 600.00 gold as that price. The price of gold is not very elastic and if and when gold moves above 400.00, a combination of disinvestment and a significant reduction in demand should stop gold in its tracks. I am looking for an equilibrium price of between 350 and 375.00, possibly higher, if the producers curtail their efforts to increase supply. As traders, we will have the opportunity to make a decent return as the XAU moves to the 111 level. Ken