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

To: B.REVERE who wrote (79622)	11/27/2001 12:05:18 PM
From: Secret_Agent_Man	Read Replies (1) \| Respond to of 116764

Analyst goes ultra-bearish on gold after auction By: Ken Gooding Posted: 2001/11/27 Tue 17:44 \| © Miningweb 1997-2001 LONDON - London analysts are holding out little hope of a rise in the gold price after a pedestrian Bank of England gold auction today. One senior analyst says gold is almost certain to remain trapped in the $275 to $280 an ounce band, with its only immediate test being its ability to stay above $270 an ounce. The Bank sold 20 tonnes (643,200 ounces) of bullion at US$273.15 an ounce, slightly below the US$273.85 spot price prevailing ahead of the auction, to raise US$175.9 million. The key figure analysts pointed to, however, was that the auction was covered only 2.6 times. Howard Patten, analyst at Barclays Capital, said: "2.6 times covered is disappointing and anyone looking for higher prices this week would be disappointed to see it well down on the last auction." (The previous auction was held only the day after the September 11 terrorist attacks when the Bank sold at US$280 an ounce and the auction was 4.3 times covered.) "The best you can say about this auction is that it was a very mediocre result," Patten added. "I can see nothing in it to lift the gold price above 275 to test 280 again. The next major event will be a test of 270." Nevertheless, he believed that, if the gold price broke below US$270 an ounce it would be only for a brief time and only a short drop, perhaps to US$268 or $265. Although the latest Comex data showed investment funds had built up short positions again for the first time since mid-August, "the funds are unlikely to be brave enough to sell short aggressively again, so some of the downward pressure has been removed." Andy Smith, analyst at Mitsui Global Precious Metals, said the low cover ratio implied bids for only 52 tonnes (1,655,600 ounces) of UK gold - the second-lowest bid for tonnage in all of the 15 auctions the Bank has so far held. He suggested that some of the producers who have put in bids in the past are embroiled in merger battles and might not have wanted "a spellbinding auction to scupper bubbling deals." He pointed out that, with only two more UK gold auctions left, there were other factors more important to the market when determining where the gold price might go. (The latest Commitment of Traders report from the CFTC was published yesterday, relating to the week ended November 20, and showed that the large-scale speculative position on COMEX had been reversed from a net long of 5,417 lots (16.7 tonnes) the previous week to a net short of 9,173 lots (28.5 tonnes).) The Bank of England said the next auction – another 20 ton tranche – will be held on January 16 next year and the last one would be held in March on a date to be announced. Comment on this story > Return to Miningweb Gold Related stories Gold and deflation explained further Gold conspiracy's Gordian knot Gold's real test starts as rates turn negative