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

To: marek_wojna who wrote (66625)	3/28/2001 1:20:59 AM
From: Andrew	Read Replies (1) \| Respond to of 116787

From The goldmining outlook website. I thought that somewhere He said the Nasdaq would be 1000 again but I couldn't find it. How absurd that sounded just a year ago. he might just be off by a few years. LONG-TERM (ONE- TO THREE-YEAR) OUTLOOK: Gold was in a long-term bear market from January 21, 1980 through January 12, 1998, and an intermediate-term bear market from February 2, 1996 through January 12, 1998. All of the important support levels created on the way down in 1996 and 1997 will be converted to resistance levels on the way up until gold finally regains $420 spot. This means that $286, $317, $324, $343, and $377 are the most important inflection points; notice that $317 was already touched in April 1998. Expect $343 to be visited at least briefly no later than the spring of 1999 as the volatile bear market in U.S. equities encourages a small core of investors exiting traditional stocks to select the alternative of gold mining shares. The price of gold exceeded $420 an ounce in 1989, 1990, and 1991, but could not close above $425 in either year. In 1988 the yellow metal briefly touched $500. Therefore, once gold closes above $425 an ounce, which is most likely to happen in April through August in the year 2000, this event will trigger an upside breakout causing the price to surge rapidly to $500. Notice that exactly this kind of upside breakout occurred in 1997 first in palladium, then platinum, and finally in silver. As euphoria begets euphoria, the stock market blowoff will also act as a stimulative spur to increase the likelihood of such a move happening in gold. The resulting public attention and likely insider selling will cause a counter-reaction, causing it to retreat all the way back to $380 before rallying again. When gold reaches $500 an ounce, the XAU will make a euphoric top around 270. The subsequent drop to $380 will cause the XAU to make an intermediate-term bottom near 130. That will occur as stability is temporarily restored to the general equity markets and an army of late-arriving precious metals speculators are left holding the bag. (Since platinum touched $500 per ounce in 1997 and then fell back, this makes a useful technical guide for gold.) VERY LONG-TERM (FIVE- TO TWELVE-YEAR) OUTLOOK: In January 1980, spot gold traded at $850 per troy ounce while the Dow Jones Industrial Average was about 800. In the late afternoon on Thursday, July 16, 1998, the Dow was at 9332.31 while spot gold traded at $293.25 per ounce, making the Dow worth more than 31.82 ounces of the yellow metal, a new all-time record. As the bear market approaches its inevitable nadir sometime in the next decade, we might see the Dow at 1850 (dividend yield 7.5%, indicating a moderately severe bear market bottom) and gold at $1000 per ounce (adjusted for inflation, equal to its average price from 1979 through 1983). Since panic bottoms often follow euphoric tops, and vice versa, one could imagine the Dow at 1485 (dividend yield 9%; it was 11% in July 1932) with gold at $1500 per ounce (adjusted for inflation, its January 1980 peak will top $2000 per ounce in a few years). If these numbers seem absurd, consider what an investor from any month in the early 1980s would think upon getting a sneak preview of the financial section of today's newspaper!

To: marek_wojna who wrote (66625)	3/28/2001 4:54:54 AM
From: Greg Ford	Read Replies (2) \| Respond to of 116787

I think that Bob's comments are very well balanced. I don't have a view on where the price of gold will go but I feel that in order for gold to move higher we will need to see a reduction in mine supply. Clearly, we are not going to see a reduction in central bank supply. The risk is that if the price does go higher what happens to physical demand. Jewellery demand has continued to increase but it is unclear whether those increases can be sustained in the face of an increase in the gold price. Most people would be comfortable with a gold price above $285 but the reality is that we haven't seen those prices since June of last year. What we have seen is a increase in lease rates - resulting in little to modest impact on gold price; A sell off in equity markets - resulting in no increase in gold prices; A decrease in hedging by producers - resulting in a short term increase in the price. I have a hard time seeing $285. Why should gold move higher and who will buy it and will the price be sustainable? Greg

To: marek_wojna who wrote (66625)	3/28/2001 7:48:30 AM
From: Richard Mazzarella	Read Replies (2) \| Respond to of 116787

marek, I recently saw a message board post making fun of any real ability to return to a gold standard. The poster pointed out that just the US national debt couldn't be covered by the available gold and gold reserves at $300/oz. That left me wondering if gold $5000/oz would be sufficient? Probably. Your case using the past predictions for the Dow and NASDAQ have merit and are valid. Speculative excesses have and always will occur. Can people return again to gold? Good point. Got Gold?