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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: TobagoJack who wrote (42116)	11/27/2003 3:55:38 AM
From: EL KABONG!!!	Read Replies (1) \| Respond to of 74559

Hi Jay, I think you and I shared some PMs some time ago now regarding the price of gold and any potential price movements. The people I know (allegedly knowledgeable in precious metals, foreign investments, domestic equities markets, bonds, etcetera) still haven't changed their thinking. The very persistent rumor is that many Central Banks will be selling gold in the very near term future. Of particular note would be both Germany and France, who view the sale of gold as a "quick fix" to many of their recent budgetary shortfalls. They would join Italy and other European countries that have been selling gold over the past few years. The near term sale of gold is also viewed as quite necessary in order to prevent the EU stability pact from falling apart, where both France and Germany are currently in violation of their obligations under that agreement, which has been conveniently "forgiven" for the moment. (By the way, sales of gold to China are rumored to be largely private sales, which in theory anyway, doesn't really impact on the public markets or the index price of gold.) Anyway, the current thinking, based largely on rumor and innuendo, is that gold will ultimately return to the $300-$325 range. When (or even if???) this comes to pass is anybody's guess, but the so-called "smart money" remains on the short side of gold, or no position in gold at all. The viewpoint is largely encapsulated in the article you posted, basically that the Central Banks (in aggregate) simply cannot afford to allow the price of gold to rise excessively against their various domestic currencies. Time will tell, I suppose... KJC