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

To: The Barracuda™ who wrote (49094)	2/15/2000 3:18:00 PM
From: Ken Benes	Read Replies (1) \| Respond to of 116759

It is important for gold to remain above 300.00. Currently, the gold market is in somewhat of a no mans land. Cb sales have been contained, the forward sale/leasing of gold is all but dead, and demand is greater than supply. Gold should rise in price, correct. Not necessarily, gold has been in the doldrums so long, that the commercial buyers stop buying at prices above 300.00 expecting lower prices in the near future. The producers have changed direction 180 degrees, but they need to do more. Supply can be restricted even more by delivering their gold against their hedgebooks. This is physical gold not paper gold as barrick has done in their pulic relations motivated flim flam games. At some point, demand will return and the gold price will move towards equilibrium. Ken

To: The Barracuda™ who wrote (49094)	2/15/2000 3:24:00 PM
From: IngotWeTrust	Read Replies (3) \| Respond to of 116759

Ashanti Hedgebook size defined by Cannacord: Fair Use, etc., Emphasis Mine Posted: 2000/02/11 05:38 AM EST Funds are actively buying gold Commodity and hedge funds have the bit between their teeth and are actively buying gold. For the moment this is the main force driving the price higher since jewellers and other consumers of gold have been holding back, hoping for a pull back in prices. Consumers are expected to re-enter the market if the price falls below $300, but growing numbers of dealers doubt whether the price will go below that level. US funds are mainly buying, according to my precious metals friends in New York, London and Switzerland. They have decided that the fundamentals and charts now favour gold and the bets are getting larger. Analysts are monitoring rising volumes and open interest on Comex, the New York futures market, but that is only part of the story. The Over The Counter (OTC) market is the biggest and the really large trades take place there. As reported, the precious metals community and investors and speculators have at last begun to appreciate that producer hedging i.e. forward sales through the derivatives market will be much lower this year. The growing throng [editor: a throng of....of 6!!! Yeah, that would be a throng allright...wonder how producers it takes to make up a "handful..."] of producers to pronounce cuts in hedging programs include Placer Dome, Barrick and Agnico Eagle Mines of North America; AngloGold and Western Areas from South Africa and Normandy Mines in Australia. Indeed Barrick has taken out some call options to take advantage of higher prices. Meanwhile dealers are closely monitoring Ashanti's creditors. Goldman (which, of course, could have been buying for anyone) was active on Friday and Monday. [2/4 and 2/7] As can be seen in our Ashanti story, creditors are getting nervous about the mine. According to T. Hoare Cannacord, which is acting for Ghana (with a 20 percent stake in the mine) says Ashanti had a hedge book covering some 11Moz through forward sales and put options. A further 3Moz was the subject of written call options. This was at the time of the company's liquidity crisis in October last year. According to sources, Ashanti was buying back 2 million ounces last Friday. But the hedge book is only comprehensible to the creditor bank rocket scientists who devised it. So who knows the size of the liability is during current volatile conditions. Of course producers are taking advantage of higher gold prices and are selling on the spot market, but in the past the hedge sales were over and above this amount. Central banks will also sell and probably have taken advantage of present higher quotes. But the Europeans have agreed to limit their sales to 400 tons. Technically this means that the market is in deficit, although of course, statistics are dated as soon as they are printed and if the price soars through fund buying and producer covering, physical demand will drop. [editor: like demand has dropped in the current Great Palladium Caper?] The history of the gold market since the market became free in the late sixties is that investment and speculative flows are the most potent force in driving the price higher. Consumers panic and follow and in the current cycle, panic stricken producers that are caught short follow and buy back their derivative positions. That is phase one and two and it seems that we are in phase one. Eventually it's phase three. Funds and other investors become overexposed, consumption slumps and gold holders in the Middle East, India and the rest of Asia, dishoard and sell their trinkets. But at what price? I suspect it could be much higher than the market expects. By: Neil Behrmann MY COMMENTARY: Not much...just a clue as to the current "clock-face moon phase" gold interpretation. Phase one, eh?