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

To: lorne who wrote (14621)	7/18/1998 11:07:00 AM
From: William JH	Read Replies (1) \| Respond to of 116762

According to an economist who I heard interviewed Thursday, gold is up against every currency in the world except the U. S. Dollar. In some cases gold has doubled and tripled. He didn't specify time frames, but I assume he meant recent year or so. What gold investors need is a weaker dollar.

To: lorne who wrote (14621)	7/18/1998 5:33:00 PM
From: Wizzer	Read Replies (1) \| Respond to of 116762

Question-- Wouldn't the pog have gone up in these countries in terms of their currencies so gold may not be cheap for them, wouldn't they have to purchase gold with $US reserves. My understanding of currency, which is somewhat limited, is that typically when a currency suffers (Canadian dollar for example) that the Bank of Canada will buy Canadian dollars with their US reserves to offset the disparity between the two currencies. Most countries would sell US reserves as most of their currencies are compared to the strength of the dollar. In that way, the bid/ask for the currency will be higher because demand for the currency would increase and support the price upwards. I believe, the policy is to do this before the downward spiral of a currency. Oddly enough, Canada has yet to support it's dollar to a great extent. Many other countries have not helped their falling currencies in this manner either. Hypothetically, had this policy been implemented for the many countries, like Canada, that are "losing ground" to the U.S. dollar, we would have seen some weakness in the US dollar because countries would have been selling reserves. This has not happened as the US dollar continues to rise against many currencies. Certainly, the US economy is strong, however, currency market pressures (selling of US reserves by several countries to support their own currency) would have shown up in the currency market. What I am suggesting is perhaps some countries are purchasing gold with their US reserves. Their US reserves would now buy more gold than before, and the long term effect on their currencies would be an improvement in stability, and increased value of their currency. If my memory serves me correctly, the POG began to suffer around the time or shortly after the G7 summit in Vancouver last year. This roughly coincided with announcements by Central Banks that they would be selling gold reserves. The Canadian dollar, and other currencies also began to suffer. This may be merely a coincidence, but perhaps it is something else that is not apparent on the surface: an agenda by the G7 countries and the world economic community to purchase gold to support their respective currencies for the very long term.