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

To: Alex who wrote (70743)	5/30/2001 11:54:17 AM
From: ahhaha	Read Replies (2) \| Respond to of 116762

They(gold mining major companies) have the ability to move the markets and apparently have repeatedly chosen to do so in a downward direction. How does manipulating the price down help a company?

To: Alex who wrote (70743)	5/30/2001 12:15:29 PM
From: Alan Whirlwind	Respond to of 116762

"Got Capital Losses!" Enough to make a guy cry over spilt milk.

To: Alex who wrote (70743)	5/30/2001 3:12:03 PM
From: Michael Collings	Read Replies (4) \| Respond to of 116762

Sorry Alex for taking a few hours to get back to you…. Some of us still work for a living. I’m flattered that you read me, but I’m just a simple investor like you. I like reading RussWinter as I appreciate the in depth analysis and the willingness to share it all with us. First, let me assure you I’m no technical guru, and never would claim to be. I just view the technicals as the psychology of the market. I guess I just see this whole thing as a trick box. Sure all this manipulating can have its affect but it just can’t continue forever. We are talking about a limited resource. That alone tells us any type of manipulation has a limit. I think we are seeing it. Let’s just say I’m a miner and I have been in this business for the last 20 years. Every year the gold price goes lower. Now I figure that maybe my smartest move is to sell a percentage of next year’s production any time there is a rally and try to make a profit. That would have been a smart move over the last 20 years. Sure I’m helping cap the price but phew! I’m in this to stay in business. In fact this has been such a smart move that I decide to increase the percentage of next years production that I sell forward. Maybe even sell a percentage of a few more years while I’m at it. In the meantime, a lot of other miners just can’t make ends meet and close their mines. Production goes down. Now the demand stays relatively constant. OK some CB’s are selling gold too to make up some of the shortfall. But the problem persists. Gold just can’t seem to go up. But then, after years and years of all this, gold doesn’t go to a new low. It’s just stuck in a trading range, mostly below mining costs. It starts slowly moving up and after a few months some shorts get nervous and push it up $30. Whoopee! I get to sell more forward, phew again! Subsequently gold goes down and gives up the whole gain. Boy, was that a smart move on my part. But now I have to deliver more gold next year and the year after at the price I sold it. No problem as long as CB’s keep selling and loaning theirs and demand remains constant. Of course I can also go into the market and buy back my forward sales if gold goes down, so hopefully someone will borrow enough gold to sell it to me at that point. Or maybe one of the CB’s will draw down their supply and sell it to me. Then I can do this trade again the next time gold goes up. Only problem is that those pesky lease rates aren’t helping. It might get harder to borrow that gold. But for sure someone will sell it. If not, I can always mine it out next year and deliver it against my contract. So if gold goes down I win, and if gold stays in a trading range, I win. But if gold goes up, I only lose the potential profit on the gold I have sold forward. So as a miner, I calculate the risks and act accordingly. In the meantime I stay in business. As an investor, we look at all these factors in a slightly different light. We see that even with all these sales by CB’s and miners and all the gold loaning by the BB’s, gold has not made a new meaningful low in several years. Let me say that again….. With all these shenanigans GOLD IS NOT MAKING A NEW LOW. So as an investor, I say, gee, with all this forward selling and CB sales, how come gold isn’t continuing to drop? Then I figure that gold has reached a point where supply is once again a constant. We’ve got miners selling forward and CB’s selling their reserves and the shorts are renewing their shorts, where is the additional supply going to come from to take gold to a new low? I can’t imagine that the miners are going to increase their production at a loss (thanks Russ). So if any of these factors slow down, either one of the other activities has to increase, or the price of gold increases. Period. No brainer. And in fact, very slowly, in spite of all the negative media, gold stocks are moving up. No news is triggering this move. The dollar is strong, the stock market is dormant, no wars have been declared. Just the gold stocks are moving off their lows. Institutional ownership of gold stocks is increasing. Nothing too exciting is happening except a little squeeze in the gold price recently. Same old, same old. The gold price goes right back down. Even my $270 support is taken out and shot. Hmmm… but interestingly, the gold stocks haven’t broken down. Corrected yes, but not broken their trend. At least not as yet. And I’m betting they won’t. It’s all a question of patience at this point.