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Gold/Mining/Energy : An obscure ZIM in Africa traded Down Under -- Ignore unavailable to you. Want to Upgrade?

To: TobagoJack who wrote (63)	7/26/2002 10:37:08 PM
From: TobagoJack	Read Replies (1) \| Respond to of 867

Betrayal by gold ... mips1.net Gold meltdown wipes out 9bn in 1 week By: Tim Wood Posted: 2002/07/26 Fri 17:30 \| © Miningweb 1997-2002 NEW YORK -- Gold's Friday syndrome is back with a vengeance. Far from fear-stricken investors lightening general equity holdings ahead of the weekend, they were comforted by the Dow's firmness above 8,000 points after Wednesday's record rally. A roaring dollar simply added to the mutilation. Gold traders are expecting a near record day in the pits with huge volumes flowing through Comex. "It's not over yet," said a harried Ian McDonald of Commerzbank, New York. He painted a picture of confusion, volatility and borderline mania as the waning gold price triggered stop loss orders that blew away all this year's hard-won gains, but is hardly a fatal blow to a sector that has had a fantastic run this year. Gold futures had nearly 7% sheared off before the New York close, the worst weekly performance since late 1999, but up from intraday lows that scraped $300 an ounce. It's an ominous parallel because that year's rally ended in tears with a slide to $255 in mid-2001. Things really got moving when gold broke technical supports below $310, and it was an express elevator down from there. The consensus is that non-gold securities were oversold, while the political and economic fears of recent months are receding a little, providing an opportunity to switch back into mainstream investments. Accelerating the losses were equities that had outdistanced the gold price and was looking for a correction. Signs of trouble were already showing up when gold failed to move in response to the wild ride down on the Dow and Nasdaq. McDonald said a physical demand drought in key Middle Eastern and Asian markets was also cause for concern, with little buying above $308 an ounce. Without investment demand to mop up the difference, additional pressure was brought to bear. Nevertheless, a gold price of $300 is healthy enough for most miners who were jubilant just to see $280. Traders believe next week could see the metal testing $290, although that could be an equivalent overreaction. However, we are within a whisker of 200-day moving averages and machine trading could really stoke a bloodbath if those lines are breached. There is still the prospect of a Fall war against Iraq, while the US accounting scandal is hardly over. But $290-300 may be a sufficient hedge against those risks with the American economy on a reasonably even keel and with the War on Terror in hand. Equities It was a grim day for gold stocks. The Amex Gold Bugs Index, filled with unhedged stocks, was pounded 9.5% lower, while the GOX and XAU had muted losses thanks to the hedgers who predominate. Coer and Hecla were the HUI's big losers, each off more than 19%, while Meridian, Glamis and Gold Fields also got hammered with 8-10% burnoffs. Barrick, Placer and Newmont were among the least affected of the major producers, losing around 5% each.