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 : DROOY Durban Deep- Best S. African Mine -- Ignore unavailable to you. Want to Upgrade?

To: RFH who wrote (477)	3/1/2000 3:21:00 PM
From: baystock	Read Replies (1) \| Respond to of 851

Another post by 8x8 on Gold Eagle forum: @COT positions - Flambeur (8x8--) Mar 01, 15:06 ..............Long.......Short....Net Long Commercials...159,480...241,012...-82,532 Speculators....60,138.....6,783....53,345 The above is heralding a price surge in gold! The Hedgers have a distinct advantage in evaluating a commodity price, because it is precisely their business. They work with other producers and users, who can fairly and objectively assess the fundamentals (supply/demand dynamics). The sagacious Hedgers rightfully realize that the majority of large short-term price fluctuations IS PURELY EMOTIONAL. Therefore, he (hedger) accommodates these moves BY SCALE UP SELLING, OR SCALE DOWN BUYING. In other words the Hedger is SELLING as the commodity price is RISING, and BUYING as the commodity price is falling. A classic example is late 1992 to 1993 gold action. And I might add the current situation! This action by the hedgers is known in the trade as "fading or averaging." The financially well suited Hedgers can afford this luxury, because they own the cash - and they maintain a long approach. The market views the Hedgers as well informed smart money. In February 1993 Hedgers had a large net long position, while Specs were heavily net short. Then in the first week of March, both Hedgers and large Specs sharply reversed their positions: Hedgers went strongly net short, while Specs went wildly net long (not unlike today). Look what gold did! Gold soared from 330 to 406 (up 23%) in the next 5 months. Here's the chart: kitco.com Today's COT's situation is exactly the same. HOWEVER, there are certain cardinal factors which will exacerbate gold's price surge this time. Consider the following. - Sept 26, 1999 Washington Agreement - Many major gold producers have junked their gold hedging programs or severely curtained them - There are between 10,000 to 14,000 tonnes SHORT, which sooner or later must be covered - No reasonably well-informed market technician can deny a Wall Street Crash is imminent - recent strength notwithstanding When one takes into account the very bullish COT's Reports, complemented by the factors mentioned above, we have the 'launching pad' for gold to go ballistic in weeks and months ahead. Of course no one can predict the extent of the public's feeding frenzy, once gold begins to soar. Nonetheless, I would guess the percent gain in the imminent gold bull market will fuel the yellow's rise at least 3 times the similar 1993 situation. That's to say I would not be surprised to see the Midas metal soar 69-70% from current levels. We are talking $500 gold by mid-summer (this year). What happened to the XAU & South African golds in the 1993 COT Gold Rally? When gold rose 23% in early 1993, XAU soared 135% and SA Gold Index sky-rocketed about 250% gold-eagle.com In the event the coming gold bull materializes, highly leveraged South African stocks like Durban Deep (DROOY), Harmony Gold (HGMCY) and Randgold (RANGY) will rise 6 to 10 times their current values. [