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To: patron_anejo_por_favor who wrote (102587)	5/16/2001 11:29:46 AM
From: John Pitera	Respond to of 436258

The Tick got to 1250 at 10:50 AM...that is rare to get above 1200 and bullish.

To: patron_anejo_por_favor who wrote (102587)	5/16/2001 11:45:40 AM
From: Activatecard	Respond to of 436258

Panic would be nice -g- Daily gold market commentary for May 16, 2001 at www.USAGold.com Gold rallied convincingly in early New York trading, blowing through the $270 barrier and causing concern among traders short the market. In what I thought to be a slightly odd assessment of this morning's market conditions and one which perhaps reveals more than was intended, one trader said, "There is no panic on the gold market now, especially after yesterday's disappointing (Bank of England) auction. But things might change in the second half of the day." Panic!??!! Apparently there is cause for concern in some quarters, but "panic" is a fairly strong term to be used at this juncture, wouldn't you think? But this unexpected and strong rally could very well be a side bar to the Fed rate cuts that only a handful of analysts had considered. With the Fed pushing down yield rates on one hand and the gold market pushing up lease rates on the other, the return (and the fun) is being wrung out of the gold carry trade. The apparent beneficiary is going to be what we always thought it would be -- the gold price. If you happen to be hopelessly short the gold market with a string of loans outstanding to a bevy of shaky gold producers who would be seriously damaged if the gold price were to start rising, perhaps there is some cause for panic. Along these lines, www.thebulliondesk.com is reporting a rumor that Mike Price, apparently a heavy hitter in the gold lending business working out of N.M. Rothschild & Sons offices is leaving for greener pastures. Thebulliondesk.com doesn't say why Mr. Price might be leaving -- and let's face it, the departure could be for any number of reasons -- however, the timing does invite a question or two given the rapid, deep-seated, and potentially dangerous changes occurring in the gold carry trade business. Don't orget it was Rothschild that presaged the Washington Agreement with its call for transparency among central banks in 1999. Recently Rothschild has called for Third World central banks to curtail their gold lending practices, suggesting that it is no longer in their best interest. Very few analysts entering the gold fray can escape acknowledging Rothschild's critical role in the gold market going all the way back to the time of Napoleon. That influence is no less today than it was some 200 years ago. So what happens at N.M. Rothschild & Sons, for better or worse, is followed with a great deal of interest. Along these lines,the London Bullion Market Association (in which Rothschild & Sons plays a leading role) released their monthly turnover figures earlier this and once again they reflect the view expressed often here that the gold carry trade -- which has acted as a deterrent to higher gold prices over the past several years -- continues to unwind. LBMA April gold turnover was down a steep 12.5 percent. That could very well be the largest drop since the LBMA started publishing its daily volume figures. If nothing else it clearly signals that something is changing, and perhaps changing abruptly, in the gold lending business. This has not been lost on gold investors the world over. Bullion demand remains strong internationally and Lipper reports over the weekend that gold stocks have suddenly become a hot item, in fact the best performing sector, in the world of equities. Rising gold stocks usually presage rising gold prices. Salomon Smith Barney's Leann Baker seems to think we are in for some changes in the gold market. In a report released this morning titled "Gold -- A Discernible Shift, For the Better, in Investor Sentiment," she says: "In our view, the higher lease rates suggest that central banks are less willing to lend gold at subpar rates, and some in fact appear to be setting "lease rate targets" below which they will not lend. Moreover, we understand that some major central banks lenders are now lending further into the future, in turn becoming less active in responding to short-term lease rate fluctuations. Lease rates have firmed despite an apparent reduction in demand for borrowed gold both by producers and by speculator short sellers. Rising lease rates and declining interest rates make it less likely that producers stand ready to boost hedging activity if gold proves able to successfully penetrate $275 resistance, which bodes well for a more sustained move higher at some point." Ms. Baker goes on to offer a gold price estimate in the $275 to $325 range for the rest of 2001 and 2002. That's it for today, fellow goldmeisters. We invite you to call toll-free with your questions and concerns, or to get a quote.