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Strategies & Market Trends : Commodities - The Coming Bull Market -- Ignore unavailable to you. Want to Upgrade?

To: craig crawford who wrote (322)	6/25/2001 1:17:54 PM
From: craig crawford	Read Replies (1) \| Respond to of 1643

Monday June 25, 10:57 am Eastern Time NY gold cuts early gains on news of big gold merger biz.yahoo.com NEW YORK, June 25 (Reuters) - COMEX gold was cutting gains in early trade Monday, digesting news that Canada's Barrick Gold Corp. (Toronto:ABX.TO - news) would combine with Homestake Mining Co. (NYSE:HM - news) to form the world's second-largest gold producer. Under the $2.3 billion share exchange, Barrick, North America's No. 2 gold company, will offer 0.53 of its own shares for each Homestake share. ``My initial reaction is it should be short-term bearish. You had a hedger purchasing a non-hedger,'' asserted one bullion trader, who guessed that Barrick would fold any uncovered Homestake North American output into its sophisticated and extensive hedge program. August gold <0#GC:> at 1002 EDT was up 40 cents at $273.70 an ounce, slipping more than $1 after the news in a range of $275.90 to $273.10. Spot gold was at $272.70/3.40, against Friday's close at $272.30/90. Monday's late was fix at $272.90. The new company will have a hedge position of 18 million ounces. Gold remained entrenched in a sideways pattern between $270 and $278 as the market anticipated more U.S. interest rate cuts at the Federal Reserve meeting starting Tuesday, dealers said. The Federal Open Market Committee starts its two-day policy meeting amid market predictions that it will cut for the sixth time this year to stave off a deep recession. Wall Street expects a reduction of at least a quarter percentage point from the fed funds rate, with many looking for another 50-basis-point cut. The Fed's five rapid-fire reductions since January have helped support gold this year, which spiked to a 10-month high near $300 a month ago, by reducing the yield spread between gold and paper assets and narrowing bullion's forward price premium, or contango. ``Theoretically, it ought to give support to the market because it takes away further incentive to sell forward. Contangos ought to get squeezed,'' said another bullion dealer. July silver <0#SI:> was up 0.2 cent $4.305 a ounce, trading in a $4.30 to $4.325 range. Spot silver was quoted at $4.32/34 versus Friday's $4.30/34 close. Silver was fixed at $4.32. NYMEX September palladium <0#PA:> was off $4 at $614 an ounce. Spot palladium was last quoted at $607/$617. July platinum <0#PL:> was unchanged at $574 an ounce. Spot platinum was quoted at $572/$577.