Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : Barrick Gold (ABX) -- Ignore unavailable to you. Want to Upgrade?

To: nickel61 who wrote (3141)	6/5/2002 10:10:45 PM
From: nickel61	Read Replies (1) \| Respond to of 3558

The John Brimelow Report June 5: The central question in gold today is, of course, the nature of the heavy selling in the late NY afternoon which knocked the price down $4, starting the slide which has continued today, with a huge 15,000 contracts trading by 9 am. The selling was clearly predatory, as the hours between the Comex close and the opening of Australia and the Far East around 8PM NY time is the one real gap in the gold trading day. No price-maximizing seller would do anything then, and in fact significant price moves are quite unusual. Although Leonard Kaplan of Prospector Asset Management reports a rumour that a gold trading newsletter issued a sell email in the afternoon, this seems implausible. Such a service would be unlikely to guide followers to use the thin after market, and anyway it happens that Mark Hulbert surveyed the gold timing letters for CBSMarketWatch at the close, finding no great change – which he interpreted as bullish! See www2.marketwatch.com{90B4CB14-2A45-4C8C-9372-77B7AEE831F9}&siteid=mktw. Mitsui Sydney suggests “funds taking profits”, Mitsui HK refers to “Huge fund selling on Access”,which UBS Warburg remarks was “anecdotally the largest trade remembered (including in 1999)” – Reuters quotes a Sydney trader estimating it at 700,000 ozs. Placed in alignment with UBS Warburg’s comment that the now-overshadowed but actually dramatic sell off from the year’s high on the NY opening yesterday was “from one large US Investment bank” it seems clear that the determined rear guard action observed at $328 for the past few days has launched a counter attack. How successful this will be is questionable. Indian ex duty premiums rose sharply: AM $1.74, PM $1.93, with world gold at $325.60 and $324.90. Still below legal import point, but c. $1.50 higher than yesterday. At the current price (around $321) India is likely to be a buyer. Yes, some Indians are selling – but others are buying. The premiums tell the story. Much more interestingly, the Japanese public turned a large buyer last night, “of about 200k, the largest activity seen since the first quarter” according to UBS Warburg”. Open interest jumped an impressive 3,271 Comex equivalent on a volume equal to 25,646 Comex lots – buying faltering in the afternoon as Europe opened and “..prof(essional) selling spooked furtherbuyers“ (Mitsui HK). Enlivening matters in Japan was news of the 26th public company bankruptcy this year (Fuijiki Kometen, a general contractor, with $510Mm in liabilities). One notes that gold shares, judged by the indices, have been stable since their initial decline today, even though gold has weakened further. With two key, if poorly understood, markets moving into a buy posture, it seems unlikely that the 2002 gold market is over just yet. A noted bullion dealer points out that small specs are at a record long, but large operators are quite reserved. One feels Mark Hulbert’s analysis likely to be more useful: “It's nothing short of amazing that the gold timers are not exhibiting more exuberance. After all, that is exactly what they did on every other occasion in recent years in which gold showed even a fraction of its current strength.” JB