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

To: goldsheet who wrote (57995)	9/8/2000 6:31:09 PM
From: goldsheet	Respond to of 116753

12/31/99 YTD Metal Last Week This Week Change Percent ---------------------------------------------------------------- 1630.50 + 0.3% Aluminum 1572.00 1636.00 + 64.00 + 4.1% 1846.00 + 6.2% Copper 1907.50 1961.00 + 53.50 + 2.8% 478.00 - 1.5% Lead 467.50 471.00 + 3.50 + 0.7% 8450.00 + 2.7% Nickel 8610.00 8680.00 + 70.00 + 0.8% 6105.00 - 9.7% Tin 5405.00 5515.00 +110.00 + 2.0% 1239.00 + 0.4% Zinc 1205.00 1244.00 + 39.00 + 3.2% ---------------------------------------------------------------- 288.50 - 5.3% Gold 277.00 273.30 - 3.70 - 1.3% 430.20 +77.0% Palladium 724.70 761.30 + 36.60 + 5.1% 449.20 +36.3% Platinum 595.30 612.10 + 16.80 + 2.8% 5.413 - 9.1% Silver 5.004 4.923 - .081 - 1.6% 68.29 -19.8% XAU Index 52.84 54.74 + 1.90 + 3.6% ---------------------------------------------------------------- All of the base metals were up this week, with copper and zinc reaching 52 week highs. Platinum also hit a 52 week high.

To: goldsheet who wrote (57995)	9/8/2000 9:26:56 PM
From: Bob Dobbs	Read Replies (1) \| Respond to of 116753

Thanks Bob. You're very frank about your motives. I was wondering what they were. "In the interests of mutual disclosure" I'd have to say that first and foremost my motive is to make money - plain and simple. But an interesting thing happened when I began to familiarize myself with the subtleties of this burned-out, pockmarked gold landscape - I found religion! That's right - in my search for greed was a discovery that gold is more than a four letter metal - it's the financial pillar of civilization through the centuries. What's interesting in this regard is the tendency, particularly of bureaucrats and demagogues, to undermine this natural authority, only to have it bite them in the ass. I'm also fascinated by the polarization found on this thread. With the undervaluation of gold in recent years, there has been a curtailment of the usual bitter debate. Those behind fiat (reflecting the vast majority in society) are smug and assured while those pro-gold'ers are resigned, sheepish, and all too few. Now for a few facts I dug up from your website that may shed light on the POG. Here are approximate percentage changes of gold and the dollar index for two recent periods: Years__________'85-87_______'95-00 Dollar Index_____-31%_______+44% Gold__________+66%________-34% Intrinsic________+21%_________-3% Change in POG Here I've estimated an "intrinsic change in the POG" as the difference between POG nominal change and Dollar nominal change using the formula: Intrins Change POG %/100 = 1 + (Change POG %/100) - 1/(1+ Change Dollar %/100) (remember that the POG is related to the Dollar as 1/Dollar) As you can see the correlation between dollar price and POG is strongly negative but not 1:1, which is to be expected. The intrinsic POG change isn't zero, and therefore there are other factors in determining the POG than just the price of its main value index. I've found too that excess supply, over and above production (the deficit) doesn't account for the intrinsic change in the POG (with the dollar index component factored out). I puzzled over this until I realized one very simple and often overlooked fact. As an illustrative example, imagine if you would a situation in which the exact same world statistics as today held, that is: Demand = 4000 tons/yr Production = 2500 tons/yr Non-production supply (Dishoardment, Scrap, CB leases, etc.) = 4000 - 2500 = 1500 tons/yr BUT the POG were $1000/oz instead of $275/oz? Is this possible? The answer, surprisingly is YES, and it is very subtle in its simplicity: IT'S THE CASE IN WHICH THE BUYERS ARE WILLING TO PAY $1000/oz AND THE SELLERS ARE WILLING TO PART WITH THE METAL AT $1000/oz, AT THESE VOLUMES. Stupid, yes? But you see the point is that RAW STATISTICS DON'T TELL YOU ANYTHING VIS-A-VIS the POG!!!! The deciding factor is the psychological component of what buyers and sellers believe is gold's intrinsic worth simultaneously in the market. In this market, it is clear to me that the sellers who value gold the least are the ones that are filling the supply gap - the central banks. It is somewhat more complicated than just saying the CBs are willing to supply ~1000 tons/yr to the market at $275. Actually they're willing to part with it at a rental cost 4% below the prevailing rental cost of money, namely at 1% rather than at 5%. This factor alone accounts for the fact that most of the supply deficit is met by CBs at a low POG - it's that simple. Bob Dobbs