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

To: long-gone who wrote (69291)	5/16/2001 5:56:14 PM
From: marek_wojna	Read Replies (2) \| Respond to of 116790

Friend of mine told me CNBC had gold specialist recommending large-cap gold miners this afternoon. Did you watch it? Might be a signal for small pull-out. Power of media, gonna start watch them again.

To: long-gone who wrote (69291)	5/16/2001 7:30:52 PM
From: russwinter	Read Replies (1) \| Respond to of 116790

Some more good Leonard Kaplan commentary: Lease rates and USD the main influences on the gold market The main influences on the gold market, these past months, have been lease rates and the value of the US Dollar, especially against the ‘gold’ currencies of the Australian Dollar, the South African Rand and the Indian Rupee. As the US Dollar remained strong, the price of gold was pressured, as producing countries, South Africa and Australia, with costs in their local currencies and income received in US Dollars, were strongly encouraged to sell, to add to their already extensive hedge books. Meanwhile, the strong US Dollar discouraged demand in India, the world’s largest gold market, as the metal seemed expensive in the local currency. The other influence on the market was internal, rather than external, as lease rates were carefully watched by both the speculative and industrial sectors of the market. OUTLOOK A new dawn? As the past several months have proven difficult, there is significant reason to believe that we may have entered a new dawn and that gold and silver prices may improve on current levels. The internals of the gold market have been altered and may produce rising prices in the next few months, albeit slowly rising prices. Reduced supply The first factor worth considering is the combination of lower US interest rates and a gold lease rate that has remained firm, now trading at about three times the 10-year historical average. Due to this confluence, forward rates are now the lowest we have seen in many years. Such thin contangos in gold discourage producers from the practice of forward selling, as they receive only about USD6 per annum when they sell forward, rather than the USD14 to USD15 per annum seen in recent times. There is anecdotal evidence, presented by several analysts, including the World Gold Council, that the reliance on derivatives for producer selling is dwindling. As such, we could see some diminution of supply. Bullish chart formation Next, the meager forward rates also discourage the massive speculative short selling seen in recent years. Such short speculative forays by large hedge funds are also made less comfortable by the fact that we may have traced out a long-term technical ‘inverted head and shoulders’ chart formation. This is normally interpreted as a bullish trend and is significant in that prices have successfully tested the low USD250s on several occasions. Weaker US Dollar? There is widespread belief that the persistent strength of the US Dollar may dwindle in the coming months as interest rates in the US are carried lower by the actions of the Federal Reserve. And, as such, industrial and investor interest and demand may be re-kindled in India and other gold consuming nations, as noted above. ‘Mild bull trend’ in near future But the investor operating at the margins of the supply/demand fundamentals is the wild card in the equation. Based upon current conditions, I believe that the gold market, and the silver market in sympathy, will be in a mild bull trend in the near future. Should the investing public decide to participate, in even the smallest way, prices could trend much higher and much faster than imagined. After all, the gold market is infinitesimally small in comparison to other world financial markets. By way of example, the total value of the drop in the past year in the market capitalisation of Cisco, Intel and Microsoft (USD1.28 trillion) – just three stocks in a single country – is more than the value of the world’s entire above-ground gold supplies (140,000 tonnes, valued at USD1.19 trillion). Just imagine what might happen if a tiny fraction of investors decide to forego the current investment mania of selecting their investments in terms of momentum and resurrect the aging but proven portfolio theorem of buying "value". And with gold just ‘spitting distance’ from 20-year lows!