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Gold/Mining/Energy : International Precious Metals (IPMCF) -- Ignore unavailable to you. Want to Upgrade?

To: Wildcat who wrote (29511)	12/27/1997 10:00:00 PM
From: Aurum	Respond to of 35569

Wildcat, Australia (the central bank, The Australian Reserve Bank that is) sold two thirds of it's holding several months ago and this was factored into the gold price immediately. This was announced about ten weeks ago. Australia only has about 100 tons left so I wouldn't worry about any further sells offs from Australia. I understand that the EU countries were thinking about getting rid of their gold because there is a rumour that the EU will introduce restrictions on central banks within the EU trading gold. There is another, more recent rumour, that some countries in the EU are thinking about the re-introduction of some sort of gold standard. Personally, I think the market is being manipulated, perhaps by many groups. However, one thing is certain - if the gold price does not go up appreciably a lot of production will be shut down. Once an underground mine closes, it is likely to remain closed because the start up costs are so high. In particular, if the South African mines close they will never re-open (because of technical reasons). Another factor is hedging - I understand that many North American producers are only hedged out for about 6 months. If this is true then mine closures in North America might occur fairly soon. Australian producers are mostly hedged for 3-6 years.