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

To: scotty who wrote (61398)	11/28/2000 6:54:17 AM
From: long-gone	Respond to of 116762

<<NOT A GOOD TIME TO BE SHORT GOLD"....>> but not sure about how good an idea it is to be massive long either.

To: scotty who wrote (61398)	11/28/2000 10:19:11 AM
From: Rarebird	Respond to of 116762

"Gold talk brings out the pundits Metal's small bounce brings out the bugs By Thom Calandra, FT MarketWatch.com Last Update: 3:15 AM ET Nov 28, 2000 LONDON (FTMW) - This week's rising gold price, and the turmoil surrounding tech stocks, is setting off alarm bells with the people we know as gold bugs. The price of the December gold contract in New York climbed to $270.30 early this week. Gold prices had lingered in the $265-an-ounce range since mid-October. Ok, so that's not a monster move. Still, gold-mining stocks have risen as much as 15 percent in the past several days, led by Placer Dome (PDG: news, msgs). The depressed CBOE Gold Index rose 8 percent in a day. Gold mining companies in North America, Australia and South Africa have seen their shares plumbing 10-year lows. Analysts generally see a weakening dollar pushing gold prices higher. The metal itself is still near its lowest price in more than a decade. Others cite gold as a temporary shelter from U.S. political woes after the presidential election stalemate. Morgan Stanley Dean Witter's Michael Durose told Dow Jones News Service he saw gold stocks as a "safety-haven factor." Technicians, meanwhile, point to heavy short-selling of the metal and perhaps the gold mining stocks. The short interest in the gold futures contracts could lend a boost to gold prices - in the event of a political or economic trigger, like a prolonged battle for the presidency, greater inflation or a sliding dollar. Short-sellers would have to buy gold to eliminate their risk if gold prices rose sharply. Many gold companies use futures contracts to hedge their bets, thus fixing a higher return on the gold they mine than they would receive in the spot market for the metal. The hedging could backfire on the companies if gold prices rise swiftly. Ailing technology stocks also could be convincing hedge fund managers to buy gold mining stocks, some of which sell for 1 and 2 times yearly earnings. Not everyone is crazy about the possibility of greater gold prices. Most professionals point to gold stock indexes, like the Philadelphia Gold and Silver Index above (XAU: news, msgs), and see a mere fillip in a decade-long trend that is down, down, down. "It's very tricky to see gold rallying on anything significantly long term without a problem," Lawrence Eagles at GNI Research in London told me. "This is the peak demand period and so far it has performed poorly," Eagles says. "A huge proportion of global jewellery sales occur in the fourth quarter. So if it can't perform well in the fourth quarter, you have to question where it will go for other parts of the year." Eagles said gold might have received a boost from base metals such as copper and aluminum, which early this week rose on a "technical bounce." Rising base metal prices could indicate that other large investors are worried about the possibility of financial turmoil and are covering their short positions. Eagles also conceded that a weaker dollar traditionally benefits gold, which is priced in dollars in many markets around the world. In an earlier piece, I laid out some scenarios for 2001 that could include fiscal turmoil. "The possibility of a sharp drop in the value of the dollar or a crash in yen could rattle markets throughout the year. I personally think that will be good for gold mining stocks such as Placer Dome, but I'm only one of 23 people in the world who share that belief," I said. See the column. The comments prompted responses from dozens of gold pundits. "On gold I am the 24th on earth to think that gold mines offer good value in a troubled market," said Lequeu Laurent in Belgium. "Read my lips," says Doris Rudnick. "Homestake Mining (HM: news, msgs) and Newmont Mining (NEM: news, msgs) will be tremendous plays." Steve Hayes, who is steeped in the history of the metal and its role as a monetary standard, notes: "You can always buy a new car for 80 ounces of gold. I still don't know what a dollar is. My sister says it is good for a cup of coffee, my brother says it is a unit of exchange." To be sure, some analysts, including Larry Edelson, see the price of gold falling below $200 an ounce, which is the cost of pulling the stuff out of the ground. That doesn't bother the 24 or so gold bugs left in the world. "Whatever gold is, I try to keep enough of it to buy a small schooner, provision it, and sail it to Australia," says Hayes. Typing up this much capital is a waste, but I sleep well." Thom Calandra is editor-in-chief of FTMarketWatch.com and CBS MarketWatch.com.