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

To: Bobby Yellin who wrote (11672)	5/15/1998 9:07:00 AM
From: Giraffe	Respond to of 116861

From the Financial Times ... Further gold supply jump unlikely By Kenneth Gooding, Mining Correspondent The big increase in gold supply in 1997 - which pushed the US dollar price down to its lowest for 25 years, adjusting for inflation - is unlikely to be repeated this year, according to the Gold Fields Mineral Services consultancy. Supply from central bank sales, producer hedging and selling by speculating investment funds more that doubled last year to 1,179 tonnes, said GFMS in its latest annual gold market survey. This helped take total supply to a record 4,254 tonnes. Meanwhile, demand in east Asia was hit by the economic crisis in the second half of 1997 and "the price had to fall very steeply in order to stimulate sufficient physical off-take, primarily in other parts of Asia, to balance the market," said Stewart Murray, managing director of GFMS. The low price encouraged jewellery makers to use record amounts of gold - 3,328 tonnes against 2,837 in 1996 - as well as causing a jump in purchases of gold bars to levels not seen since the late 1980s. Last year, central bank net sales contributed 406 tonnes to supply, up from 275 tonnes in 1996 but below the record 622 tonnes in 1992. Mr Murray said central banks would continue selling this year. Hedging by producers had probably reached "saturation point" in Australia. There were other parts of the world, however, where producers might consider themselves to be under-hedged, "but we don't expect so much hedge selling this year," he said. Forward sales by producers last year added 329 tonnes to supply, up from 30 tonnes, while option hedging contributed 184 tonnes, compared with 101 tonnes. Newly mined gold supply, which increased to a record 2,464 tonnes last year from 2,357 tonnes, was likely to fall in 1998, he suggested. As for demand, although the worst of gold scrap disposal in east Asia was over, the full impact of the economic crisis in the region was still to be felt. The Middle East relied on oil for its wealth and present low oil prices would hit demand in that region. Another year of booming equity markets would also be bad for the gold price. -------------------------------------------------------------------------------- After 31 years producing the gold industry's statistical "bible," GFMS is to become an independent organisation, owned by its managers, Mr Murray announced. The present shareholder, GFSA, the South African group, will relinquish control next year. Alan Wright, chairman, said many of the companies and individuals that supplied GFMS with confidential information had become worried about rapid ownership changes in the South African gold mining industry. "It was brought home to them that anyone might end up owning GFMS." An independent GFMS could sell its long-term gold price forecasts to other companies, said Mr Wright. GFSA had not interfered with GFMS editorial policy but had insisted it was the only group given this information. Gold 1998, from GFMS, Greencoat House, Francis Street, London SW1P 1DH, UK, or www.gfms.co.uk/gfms. œ120 or US$195.

To: Bobby Yellin who wrote (11672)	5/15/1998 10:02:00 AM
From: IngotWeTrust	Read Replies (1) \| Respond to of 116861

Bobby, it is my understanding the phrase "real earnings" refers to what is truly earned after factoring in the difference between posted earnings subtracting for inflation. I'm sure someone else with a more "economics" background than I have will speak up and correct me if I'm mistaken. At least, when I hear that term, that's what I've interpreted it to me...seems like I got that conceptual understanding from one of those CNBC teachable moments(grin) O/49r