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

To: Alex who wrote (3819)	12/4/1997 6:34:00 PM
From: Gary	Respond to of 116753

Alex, While Armstrong is callng for support at $275 he is also calling for $229 - $250 for a gold bottom. Recovery starting either in April 1998 or June/July. The former would be nice but he says if the latter the upside would be greater.

To: Alex who wrote (3819)	12/4/1997 7:16:00 PM
From: Al Cern	Read Replies (1) \| Respond to of 116753

Alex, Someone, who can afford to wait is buying the massive amounts that are being sold into the market. The sellers/lenders are exposed in several ways. The speculators who want to see the price down, are selling as much borrowed gold as they can, and investing the proceeds to earn a positive yield, which is compounded with the price dropping. If the price turned the other way, most of these speculators, would go bankrupt, and the lenders would be out the gold, all for 3-4% yield, a lot less than supposedly risk free treasuries. The central banks, therefore can't let the price go up, or they will lose a lot of gold. As production dries up the imbalance gets worse. Demand just might increase too. The central banks, as lenders, are between a rock and a hard place because the overhang is huge, and at some point it has to correct. Cutting their losses now would make more sense, but hey, the Japanese have been able to postpone the grim reaper for a few years, why not them. Sincerely, Al Cern

To: Alex who wrote (3819)	12/4/1997 7:31:00 PM
From: PaulM	Read Replies (1) \| Respond to of 116753

Alex, I wouldn't buy any support number, because the nature of gold market dynamic is inherently unpredictable right now. You asked in an earier post why central bankers would sell at multi-year lows. I'm coming around to the view that they could and are, and not because of any conspiracy. A conspiracy is usually a secret agreement, but gold is going down because of an open, well-known agreement, Maastricht. I called investor relations at one of the junior gold's today. Coversation turned to price of gold, and she told me something I didn't know: Maastricht set requirements for CB gold holding that were below what everybody already had. At the same time, Maastricht represents an austerity program for most countries, in that it has fairly strict debt and paper reserve requirements that seek to force countries to get their financial houses in order. I'd guess this house cleaning is partly a cause of the high unemployment we've seen in Europe. And it's also the reason that countries who feel they have too many problems (unemploment) already won't be joining. Maastricht has been around a while, and so has the Gold slump. But as we get closer to EMU countries get desperate to satisfy the strict paper requirements. And even third-world non-european countries view it as a guideline for good fiscal policy. Needless to say, the tax increases and less spending required by Maastricht is politically unpalatable. Much easier to instead sell gold, even at multi-year lows, if that's what it takes to make the grade. Non April 1998 EMU countries are less pressed for time, and will attempt to maximize profit from gold sales over longer time period (Swiss for e.g.). Like you said, they would be stupid not to. In essense, the world is trying to take a stab at sane, stable (paper based) monetary policy. And gold is much easier to sacrifice than votes at the ballot box. Basically, you hold gold if you believe all of this won't work, that it will fail, whether tomorrow or 5 years down the line. When it does fail, it will be a doosie. Things could play out lots of ways. Personally I think in April 1998 we'll find that some of the original 1998 have not met the requirements. Maastrict may have to be relaxed or the EMU scrapped altogether. Japan puts a recessionary (depressionary) damper on the world economy, the U.S. is showing signs of a slowdown and we have austerity in Europe. In other words, I think the Global economy will be forced make lots of currency soon, and both it and Maastricht will be worth the paper they are written on.

To: Alex who wrote (3819)	12/4/1997 7:59:00 PM
From: paul ross	Read Replies (2) \| Respond to of 116753

!9% of investors bullish.... We don't have to look any further than the threads here at SI to see how true that is. Its interesting to look back at some of the posts of the gold stock threads that existed at the end of 96. To some 400 gold was a foregone conclusion. For many a 25-50% return on their gold stocks was inevitable. Which stock was going to be the next one to double? Now there's talk of 200 gold. Will someone start a thread on gold stocks that will disappear in 98? Somehow I feel that the optimism that wasn't to be in 97 will turn into the pessimism that won't be in 98.