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

To: goldsnow who wrote (5230)	1/4/1998 5:37:00 PM
From: Terry Rose	Read Replies (1) \| Respond to of 116753

Goldsnow. If the U.S. interest rates continue their freefall, eventually the dollar should lose some of it's value due to the monetary policy of the Federal Reserve. Unless as in the case of the Bank Of Japan, the other central banks are creating money at a faster rate. I also believe that the future explosion in our trade defecit is going to bring the value of the U.S. dollar back to reality sometime this year. As Paul mentioned earlier sooner or later the "hot" money in treasuries and U.S. stocks will look for a new home and rates will rise at that time. Asian stocks and gold assets are likely destinations. Templeton is already nibbling in South Korea.

To: goldsnow who wrote (5230)	1/4/1998 6:44:00 PM
From: Little Joe	Respond to of 116753

Great post. I think on the money. Live long and prosper, Little Joe

To: goldsnow who wrote (5230)	1/6/1998 6:47:00 PM
From: goldsnow	Read Replies (1) \| Respond to of 116753

Gold hits 18-1/2-year low on deflation fears 07:20 a.m. Jan 06, 1998 Eastern By Patrick Chalmers LONDON, Jan 6 (Reuters) - London gold fixed at an 18-1/2-year low on Tuesday on the back of overnight losses after selling by funds betting on lower prices and by gold miners hedging future production, dealers and analysts said. Whereas central bank sales drove funds' short strategies during most of 1997, concerns about U.S. deflation, underscored at the weekend by U.S. Federal Reserve chairman Alan Greenspan, prompted the latest sales of gold, a traditional hedge against inflation. Gold fixed at $281.80 an ounce, the lowest since the afternoon fix of $281.35 on July 3, 1979, and breaking the recent fix of $283.00 seen on the afternoon of December 12. ''The big move came from New York, that's basically fund-driven movement,'' said one London precious metals analyst. Investment funds have regularly gone short on gold in recent months, selling gold they do not own with the intention of buying it back at a profit when prices fall further. ''There was also some weakness overnight, which would have been from Australian producer selling,'' the analyst added. The holiday period had offered some respite to gold as funds closed off short positions in end-of-year book-squaring and producer selling and central bank lending tailed off. ''Most people were expecting that there would be downward pressure as the New Year started after short-covering during the holiday period. However added to that, the significant factor has been Greenspan's remarks on the economy. Several dealers did not think that had been factored into the gold price,'' the analyst said. Greenspan on Saturday told the American Economic Association's annual meeting that some observers had begun to question whether deflation was now a possibility. Added to that on Monday was news of a South Korean campaign to get private citizens to sell their gold to boost the country's dwindling foreign exchange reserves. While dishoarding by private investors hit by Southeast Asia's financial woes had already been widely reported, such a public campaign in Korea and a similar effort by the Thai military has raised the stakes. ''The Korean story might not be important in terms of market fundamentals but it did hurt sentiment. It indicated in quite some detail the idea that selling across Southeast Asia generally could be quite significant a) because there's selling and b) because there's now unlikely to be much buying,'' the analyst added. South Korea's Housing and Commercial Bank, a main sponsor of the nation-wide campaign launched on Monday, has now imposed restrictions on what it would accept after the first day brought in an estimated 3,314kg of gold worth an estimated $33 million at current market prices. Technical analysts put market support for spot gold, which was last at $282.00/$282.50, at below the previously cited level of $280.00. ''The $280.00 level is just psychological support -- there's no actual support there,'' said technical analyst Karen Jones of Credit Suisse First Boston. ''There's nothing between here and $272-$271,'' she said, citing Fibonacci projections. On the upside, strong resistance was seen at $284.75, which previously was important support. The U.S. dollar shot to a fresh 5-1/2 year high against the yen and firmed against other Asian currencies, making gold more expensive in dollar terms and encouraging sales from producers outside the U.S. dollar zone. This Thursday, the influential Gold Fields Mineral Services is due to present its first estimates of supply and demand in 1997, which could throw further light on what central banks have been up to in terms of reserve sales. A GFMS report last September, which talked of 200 tonnes-worth of reserves having been sold by a central bank ''probably of European origin,'' knocked several dollars off spot gold. News of further central bank activity, or confirmation of last September's report, would not help the already battered sentiment towards gold and could fuel short position-taking. ((Patrick Chalmers, London Newsroom +44 171 542 8057. london.commodities.desk+reuters.com))