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.

Pastimes : Clown-Free Zone... sorry, no clowns allowed -- Ignore unavailable to you. Want to Upgrade?

To: ild who wrote (22138)	9/27/2000 11:41:04 AM
From: pater tenebrarum	Read Replies (1) \| Respond to of 436258

that's easily explained. sentiment in the sector is so poor, that no-one believes anymore that a gold rally can possibly hold, or a bull market, even a minor one, be forthcoming. the consensus opinion propagated by GFMS and the WGC (essentially the mouth-pieces of the big hedgers and other assorted short sellers) is that gold can not possibly go higher than $290 (incidentally that's the price at which all carry trade positions created over the past three years would begin to suck wind). what everybody overlooks is that the supposedly endless source of supply, the CB's , is slowly but surely running out of material to manipulate the market. of the reported 33,000 tons in CB vaults, half is held by the largest holders (Fed, BuBa, Bank of France) who ain't selling. the small, exotic CB's have been relieved of their entire hoard (Kuwait, Chile, Uruguay, Jordan). of the remainder, several are either down to their last few ounces (e.g. Canada), or have simply lent out their entire stash (Denmark, Australia). the BoE, well known for being consistently run by the biggest contrary indicators the world knows (the list of ill timed gold disposals and currency interventions is long) will soon have disposed of the remaining amount earmarked for sale...i can almost guarantee you that as soon as the BoE gold is gone, they'll watch the price rally big. last time they sold a huge amount, the price rose 20-fold in the decade following their disposals. in the meantime, the biggest hedgers (AU and ABX) are frantically trying to worsen the already extremely depressed sentiment for fear over their hedge books. if gold were to rally to $1,000 oz. for example (sounds outlandish now, but so did $850 in say '75), Anglo's hedge book would sport a negative mark-to-market value of $10 billion. that's quite a hole for an otherwise strong balance sheet. haven't done the calculations for ABX, but considering those two are short 40% of annual global production between them, it would probably be similarly disastrous. so the vested interests lined up against gold are vast, and the poor sentiment is indicative of the spirit of resignation that has engulfed the industry and investors. sounds like a great time to buy to me. but then, i' ve been unsuccessfully trying to pick the bottom for quite some time, so you better ignore that last remark.