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

To: russet who wrote (822)	9/29/2001 2:01:09 AM
From: craig crawford	Read Replies (1) \| Respond to of 1643

$340 gold seen by influential analyst Mitsui's long-time bear Smith sees positive signs marketwatch.com By Thom Calandra, CBS MarketWatch Last Update: 2:43 PM ET Sept. 27, 2001 NEW YORK (CBS.MW) - Andy Smith, a veteran London-based metals analyst, sees the price of gold hitting $340 an ounce in the next several months. ............................................................................................................................... Smith points to increased buying of gold coins in London in the wake of the Sept. 11 terrorist attacks. There are reports of increased buying of gold bars in Switzerland as well, he said Thursday. But it is aggressive hedge funds, long absent from the gold market, that will take gold's price as much as 15 percent higher in coming months, he says. On the equity front, bullion analyst John Reade at UBS Warburg in London has been talking up the metal in recent days, according to Bill Murphy, founder of rabidly pro-gold Web site LeMetropoleCafe.com. Reade's comments may have convinced UBS Warburg equity analyst Brian MacArthur to revise his rating on Newmont Mining (NEM: news, chart, profile) this week to a "buy" from a "hold." The UBS Warburg investment bank also raised its gold-price target to a year-end $293 an ounce from $270. The metal commands more of a risk premium after this month's terrorist attacks on American soil, the bank said. ................................................................................................................................ "Gold has long stopped competing with the Swiss franc and other investments," Smith said. "But it doesn't have to compete in that league. All it needs now is one or two (hedge) funds that are willing to earn some good returns." He points to Julian Robertson's massive Tiger Investment hedge funds, which spent years building up the case for - and their position in - palladium, a metal that has benefited in recent years from Russian supply problems. "Over a three-year period they built positions in palladium futures, options, even (reputedly) equity, and established physical deals with suppliers and end users," Smith points out. "Illiquid, boring, work-a-day palladium was metamorphosed from under $100 in 1996 to $1,100 (an ounce), after Tiger had closed its positions, in February this year." ................................................................................................................................ Some eight years ago, hedge fund manager George Soros and Sir James Goldsmith of London, using a combination of aggressive options contract buying, futures trading and equity investments, helped to push gold prices above $340. It took four years for the price of the metal to come back down to that level, when a Federal Reserve economics paper suggested central banks might rationally sell all their gold. "You won't need a Soros or a Goldsmith now, just a smart fund or two, because expectations for the metal are so low," Smith said. Some 15 of the world's largest central banks regularly sell about 400 tons a year of gold, which is then used by both producers and bullion banks in a market dominated by forward sales, gold lending and other practices. The lending and short-sales tied to central bank sales are said by industry analysts to depress the metal's price.