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Gold/Mining/Energy : Agnico-Eagle Mines Ltd. - AGE (U.S. AEM) -- Ignore unavailable to you. Want to Upgrade?

To: Yogizuna who wrote (1013)	7/12/2000 10:56:33 PM
From: Robert J Mullenbach	Read Replies (2) \| Respond to of 1612

You are going to like this, never figured this side. goldminingoutlook.com KAPLAN'S CORNER: QUESTION: What did you think of today's Bank of England gold auction? ANSWER: Most analysts stated for the record that they considered the auction results to be bearish, since the price was lower than expected, and the number of bids submitted was substantially lower than expected. In my opinion, the auction results were strongly bullish for exactly the same reasons; after all, the recent strength in the XAU supports a positive-spin hypothesis. Gold producers and other commercials (insiders) were taken by surprise when the Bank of England originally announced its auction scheme, and their behavior in the second and third auctions especially was to submit bids to publicly show support for the gold price. After several auctions were finished, however, gold producers realized that the most effective strategy would be to ensure that the Bank of England always got the worst possible price for its gold, to strongly discourage it from continuing with future auctions. Therefore, they decided to intentionally not submit any bids for the most recent auction, thus ensuring that the auction would yield close to the lowest price of the past two months for the Bank of England. Should producers continue to boycott future auctions, the Bank of England will continue to get the lowest prices of any cycle, and will eventually have to answer to their constituency to justify their auction strategy. The boycott, then, is the most intelligent approach if producers wish to support the gold price, and will inevitably result in the Bank of England suspending its auctions and becoming an adjunct signatory to the Washington Agreement. In addition, failed auctions by the Bank of England will strongly discourage other central banks from adopting the auction strategy.