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

To: long-gone who wrote (49765)	2/28/2000 3:28:00 PM
From: Alex	Respond to of 116753

Investing in Gold This article was excerpted from a forum held on January 12, 2000, titled "Investing in Gold in Today's Market." Q Why is gold considered valuable, and what affects its value? A Gold is valuable because it's a scarce substance, it's difficult to mine profitably and it's a highly desired material for jewelry. Jewelry demand continues to grow at a very rapid rate. Much more gold is consumed for jewelry and other industrial uses than is mined every year, but sales from above-ground supplies, mainly central bank holdings, balance the market. Without these above-ground sales from central banks, also known as "the official sector," plus forward or hedge-book sales [contracts to sell a commodity at a set price and specified future date] by the mining companies, the price of gold could be several hundred dollars higher than it is today. Without these sales, it is possible the price of gold could increase from its current level of approximately $280 per ounce. Q Why could the price of gold increase if central bank holdings are readily available to be dumped onto the market? A The Washington Agreement of September 1999 addresses this very issue. Under this agreement, the European central banks, the United States, Japan and the International Monetary Fund put limits on future sales of gold by the central banks. They also agreed to limit the lending of gold ? the basis of the short-selling [selling borrowed securities or commodities] buildup. So future supplies of official-sector gold will be far more regulated and restricted. This represents a tremendous fundamental change for the gold market, and it's the reason I think that gold has bottomed and is poised to do much better. Q What events should gold investors be on the lookout for today? A First, I believe there will be a buyback of hedge books [position designed to guard against fluctuations in the price of gold] by the mining industry this year. Concerned about the downward trend of gold prices, the gold industry took advantage of the forward market in the gold price, in which the price of gold futures was higher than the current (or spot) price. In effect, they sold future production in the present, and in doing so became short. It appears the gold industry has sold forward more than 3,000 tons, or approximately two years of future production. In my opinion, the industry is seriously considering reducing this exposure because they recognize that it has damaged the gold price. Second, there is the possibility of a bear market in stocks. Certain sectors of the market are considered overvalued by many. I'm not predicting any particular imminent demise, but remember that gold may perform an insurance function against a possible bear market. Third, watch out for a resurgence of inflation. It's worth remembering that money-supply growth has been extremely rapid in recent years, culminating with extremely high growth rates prior to the end of 1999 as the Fed provided high levels of liquidity in preparation for Y2K. Q How can beginning investors incorporate gold investing into their portfolios? A One option would be to invest in a well-managed gold mutual fund. Aside from this, one could invest in gold coins, the most easily available form of bullion. And, finally, you could invest in selected, high-quality mining companies. schwabon.com

To: long-gone who wrote (49765)	2/28/2000 4:36:00 PM
From: lorne	Read Replies (1) \| Respond to of 116753

Iraq: Ignore US Calls for More Oil FEBRUARY 27, 13:38 EST BAGHDAD, Iraq (AP) ? The United States has no right to pressure oil-producing countries to raise output in order to bring down the price of crude on global markets, Iraq's oil minister said Sunday. ``We consider this unwarranted and unjustified, and it is an overreaction by the American administration,' Oil Minister Amer Mohammed Rashid said in response to a U.S. bid to persuade Gulf oil producers to loosen reins on output. Rashid urged his partners in the Organization of Petroleum Exporting Countries not to yield to American pressure. U.S. Energy Secretary Bill Richardson ended a tour Saturday of leading Gulf oil producers, including oil giant Saudi Arabia, in a bid to persuade them to support a production increase to force down oil prices that have been surging near $30 a barrel ? and that have American consumers complaining about high costs of heating oil and gasoline. Richardson said on Saturday he had obtained an encouraging response from Saudi Arabia, the world's largest exporter, to his plea to pump more oil, but left the region with no firm commitments. OPEC oil ministers are scheduled to meet March 27 in Vienna to decide whether the time has come to open the tap at least slightly on their self-imposed cuts. The reductions, along with those by non-OPEC members, have denied markets of more than 4 million barrels a day for nearly a year, sending prices to levels unseen since the eve of the 1991 Persian Gulf War. Though world oil supplies are at dangerously low levels, Iraq has slashed exports by up to 400,000 barrels a day. Rashid warned of further cuts if the United Nations continues to places holds on applications for equipment so that Iraq can upgrade its flagging oil sector. Under a U.N. oil-for-food program, started in 1996, Iraq can sell oil under U.N. financial controls, with proceeds funding U.N. humanitarian programs as well as paying for oil spare parts. Since May 1998, the council has authorized Iraq to buy $1.2 billion worth of spare parts. But Iraq says only $186 million in equipment has been sent. wire.ap.org