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

To: bobby beara who wrote (9383)	4/5/1998 6:57:00 PM
From: MtnBear	Read Replies (2) \| Respond to of 116790

Following is a quote from another gold page: (A day late, but still pertinent!) Regards; Mtn Bear MARKET UPDATE (4/3/98) AM---- Gold pushed to higher ground this morning routing the long-entrenched shorts and perhaps signaling the first leg of a new bull market in gold. The positive psychology has been building for quite some time in the gold market. The market has been underpinned by producer/speculator short-covering on the dips, central bank reluctance to sell or otherwise mobilize reserves in view of the rapidly changing international monetary balance ( See below.), and recalcitrance on the part of gold bulls worldwide who continue to buy gold in record amounts despite the now ritual bad-mouthing of the yellow metal by the mainstream press. Breaching the $303 figure was a big first step for most technical analysts. They will now be looking to see if it holds. If it does we have been told that $320 is the next point of upward resistance. Key to all this are the continued problems in Japan where problems with the banks have sent Japanese investors to gold as a refuge. A similar situation is developing in Europe where large many have voiced their doubts about the new euro and Euro central bank. In the United States investors are beginning to realize that all the changes in the monetary system could be the prelude to disaster for the dollar which starting in May will no longer be the world's only reserve currency. It will face substantial challenges from both the euro and the new Asian currency being structured in the wake of the Asian tsunami which has now reached the island nation of Japan. It is a day for optimism, fellow goldmeisters, but I doubt that this is the final volley fired in the war on gold. The ride will be bumpy but decidedly a hill climb. Have a good weekend. We will update if anything develops. I'm going to leave the analysis from Warburg's Stephen Yorke posted over the weekend so that all might cogitate one of the primary driving forces to the present uptrend. If you like this type of analysis, you would probably like our newsletter, News & Views, now read monthly by nearly 7000 readers. Call Marie at 1-800- 869-5115 for a complementary issue, or go to the ORDER FORM at bottom of this page and click. Please do not order the newsletter unless you have a genuine interest in gold and looking for a gold broker. We are overwhelmed with inquiries and at some point we are going to ask whether or not you fulfill the criteria stipulated. Sorry, but we have to draw the line somewhere. Thank you in advance for your consideration! -------------------------------------------------------------------------------- An interesting interview of a Warburg Dillon Read director reveals some of the behind the scenes maneuvering as the European Monetary Union moves toward its May, 1998 freeze on gold reserves. Stephen Yorke, the director of foreign exchange for Warburg, echoes themes advanced in this report last week. Some quotes from Mr. Yorke: "The reasons many gold analysts did not foresee the extent of European central bank total sales last year, and are not currently expecting the coming freeze in European central bank gold sales, is that they are not reading the Maastricht Treaty and European political situation correctly." "The whole EMU project is driven by law and the basis for any decision must be the Maastricht Treaty." "Germany has 28.9% of the vote, France 21.8% and Italy 20.3%, so Germany and France together have a majority and will most likely make this decision in conjunction with Italy." "At least 10% of reserves (will be in gold) which appears to be the market consensus, but the risks are on the upside, that is, it is more likely to be 30% than zero percent of total reserves. Why? Because Germany, France and Italy will effectively make the decision and they have the highest proportion of gold to total reserves of any European country." "France has about 50% of its reserves in gold, highest of any industrial country. As France has gold on the books at around $340 and ounce and Italy at around $364 it would clearly not be in their interest for gold prices to fall much." "But there are also political reasons why ECB gold reserves are likely to be higher than the market is currently expecting. Germany has an election year and there is a huge amount of skepticism in Germany and France about how stable the euro will be, so clearly Kohl will need to reassure the electorate of euro stability and gold backing may be necessary to do this, as gold equates to stability in the public's mind." On the subject of potential gold sales after January 1, 1999, Yorke says "it will be very difficult to get the ECB's approval in the first few years of EMU as the ECB will not want to do anything that will jeopardize the stability of European foreign exchange or interest rate markets and gold sales affect these markets." This counters statements by London Bullion Market Association ex-director Terry Smeeton's claim that sales could come between now and 1999. "Technically," says Yorke, "Smeeton is right legally, but the pressure to cooperate from May this year is likely to be so great as to effectively put a freeze on further European central bank gold sales from May." So there you have it from someone in the know. These are ideas not unfamiliar to those who read this report regularly. The verification is encouraging. The big question in my mind is why Britain is so anti-gold? Is it because they see it as a threat -- since their central bank hold very little? Or is it because they are secretly trying to acquire? I think the former. Be prepared for a sea change in all markets as the year progresses and EMU becomes a reality.