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

To: Alex who wrote (19965)	9/28/1998 6:48:00 PM
From: goldsnow	Read Replies (2) \| Respond to of 116761

I do not think one want to stay short much longer..Check this out.. Gold rates stay high as opinion split on LTCM 12:29 p.m. Sep 28, 1998 Eastern By Patrick Chalmers LONDON, Sept 28 (Reuters) - Sharply higher gold lease rates split bullion market opinion on Monday, with analysts and dealers at odds on the cause of rising metal borrowing costs. Implied gold lease rates remained high, with London Bullion Market Association figures for one-month metal at 1.51 percent, down from Friday's 1.70 percent but still well up on Thursday's 0.65. Andy Smith, principal commodity analyst at Mitsui & Co in London, said the rise was more due to a knee-jerk market reaction to Friday's bailout of U.S. hedge fund Long-Term Capital Management (LTCM) than lower metal supplies available for loan. ''The short answer is that the market has been very efficient and typically nervous, raising borrowing rates first and asking questions later,'' he told Reuters. Friday's four-month high in spot gold prices came after lease rates jumped, a rise dealers and analysts put down to a combination of factors linked to the LTCM bailout. Hedge funds have regularly been short gold during recent months, borrowing metal to sell in anticipation of buying it back later at a lower price. Dealers said the near-failure at LTCM turned the spotlight on other funds, boosting spot gold prices on the back of real or anticipated short-covering. Funds like miners, use the gold lease market to borrow metal for their derivative transactions, with the lease rate a measure of how much metal is around. Smith discounted the idea that a huge weight of short positions remained to be covered, citing U.S. data showing collective net short positions on New York's COMEX gold futures market as having shrunk by the equivalent of 208 tonnes since the start of September. Others said central banks had withdrawn metal for loan and commercial banks had hiked rates. ''After the Long Term Credit Management rescue they (central banks) are uneasy about the exposure of hedge funds short of gold and under increased pressure to close out positions,'' said Nick Moore of Flemings Global Mining Group in a report. Rhona O'Connell, metals analyst for brokers T.Hoare and Co., said another factor was that bullion banks had also taken in more metal in anticipation of having to execute producer sales orders if gold hit $300 an ounce. Whatever the cause of higher lease rates, spot gold had calmed come late Monday business in Europe, drifting to be last at $292.40/$292.90 a troy ounce versus New York's Friday close of $293.80/$294.30 and its session peak just below $300.00. Copyright 1998 Reuters Limited.

To: Alex who wrote (19965)	9/28/1998 6:59:00 PM
From: goldsnow	Respond to of 116761

Inflation policies? You can count on it... FOCUS-France sees German vote chance for leftist agenda in EMU 12:01 p.m. Sep 28, 1998 Eastern By Myra MacDonald PARIS, Sept 28 (Reuters) - France on Monday seized on the election of German Chancellor Gerhard Schroeder as a chance to press a leftist agenda in Europe that could dramatically change the region as it heads into Economic and Monetary Union (EMU). French Finance Minister Dominique Strauss-Kahn said he hoped Germany's election of the centre-left Social Democratic Party (SPD) would pave the way for greater political cooperation inside the euro-11, an informal council of EMU members. The outgoing Bonn government resisted giving teeth to the euro-11, fearing it could meddle in exchange rate policy and impinge on the independence of the European Central Bank (ECB) by pushing for lower interest rates to boost growth and jobs. Strauss-Kahn, in comments relayed by a finance ministry spokeswoman, said he saw the vote as a chance to step up European calls for reform to the international monetary system. Strauss-Kahn sought support from his European counterparts at a meeting this weekend for action to tackle the crisis in emerging markets by strengthening the role of the International Monetary Fund and improving supervision of capital movements. ''I welcome the ample victory of Gerhard Schroeder and the SPD which is an additional opportunity to practice common policies for growth and jobs in Europe, supported by the euro,'' the spokeswoman quoted Strauss-Kahn as saying. ''Once again, the left has won in Europe. It is an opportunity to reinforce within the euro-11, co-ordination of economic policies and better regulate the international financial system,'' he said. Strauss-Kahn's comments underlined a determinedly positive French approach to Schroeder, traditionally perceived as less francophile than outgoing Chancellor Helmut Kohl. What France loses in terms of Kohl's personal attachment, it gains, so the argument goes, in having a government in Bonn whose thinking is closer to its own Socialist-led coalition. Schroeder's willingness to build ties with British Labour leader Tony Blair need not damage France if it leads to a leftist coalition pushing for change in Europe and in the global financial system. French President Jacques Chirac, who shares power with the left-wing government, invited Schroeder to Paris as soon as the election results were out. Though a conservative, Chirac holds similar views to the government on the need for a shift from prevailing economic liberalism. So far France's positive approach appears to have been paying off. Schroeder said he would visit Paris sooner rather than later and stressed his commitment to the Franco-German alliance. ''The Franco-German axis is of historic importance...and will remain the most important axis in Europe,'' he told Europe 1 radio. The comments coming out of Germany sounded more like those of French politicians. Schroeder promised to work with Britain and France to reform global financial markets and spoke of strengthened cooperation on economic policy and exchange rates. SPD chairman Oskar Lafontaine, tipped as the next finance minister, went even further, saying a cut in interest rates would be the best way to fight unemployment. Not even French politicians nowadays would openly call for a cut in rates, so used are they to Germany's sensitivity about central bank independence, though Strauss-Kahn has said the ECB should favour policies which encourage growth. ((Paris newsroom, +33 1 4221 5381, fax +33 1 4236 1072, paris.newsroom+reuters.com)) Copyright 1998 Reuters Limited.

To: Alex who wrote (19965)	9/29/1998 7:02:00 PM
From: goldsnow	Read Replies (3) \| Respond to of 116761

FOCUS-Norilsk shifting to Soviet-style economics? 09:39 a.m. Sep 29, 1998 Eastern By Sebastian Alison MOSCOW, Sept 29 (Reuters) - Russia's major metals producer, Norilsk Nickel, on Tuesday set out its response to the impact of the country's financial crisis on wages but left a raft of questions unanswered. Some analysts interpreted Norilsk's position as marking a return to Soviet-style command economics. ''On the agenda (of a meeting of Norilsk unions and management on September 26) there was just one item: the restoration of the purchasing power of the pay of more than 100,000 miners and metal workers,'' the company said. But despite a slump in nickel prices which has driven Norilsk into serious financial difficulties and led many to believe it would cut unprofitable production, the statement made no mention of reducing output or bloated staff numbers. The only commitment it made which acknowledged that Russia and the company were facing a crisis was to say it would not index pay to the dollar, as this could only be done by cutting staff numbers, an approach it called ''irresponsible.'' Far from looking to trim costs, the company listed a swathe of expensive benefits which it said it would continue to guarantee to employees at unchanged prices. These included rent on company flats, water, electricity and heating rates, transport charges, places for children in kindergartens, holidays at sanatoriums, buying winter clothes, financing training for a new profession for employees under 30, and many others. The company made no mention of where the money for these ambitious social plans would come from. Some analysts say this policy reflected a major switch in thinking by the government of new Prime Minister Yevgeny Primakov, that a move back to Soviet-style economics, especially in the many ''one-industry towns,'' was already under way. Analyst Doug Upton of HSBC James Capel in London said Moscow was increasingly likely to take back control of foreign exchange revenues from exporters, and would only give back to companies such as Norilsk enough money to stay in business. ''There'll be prioritisation. The government is moving back into control, and the instructions may be fairly clear: 'responsibility number one is to employ and to feed and to house the people,' which is the old system,'' Upton said. He added that he believed the Primakov government may use Russia's greatest resource, its people, by reopening industrial plants which have collapsed since the Soviet Union ended in 1991 and increasing industrial capacity. ''From the point of view of the metals markets, particularly nickel, copper and aluminium, it means that we might see over the next few years consumption of all these metals start to increase again as the lights in all the different factories are turned back on,'' he said. But he added this policy would inevitably lead to production cuts, as Norilsk would no longer have enough foreign exchange at its disposal to buy expensive imported machinery. The company spends around $50 million per year on such equipment, he estimated, and dependence is rising as imports have pushed domestic equipment producers out of business. Analyst Maxim Basov of MFK Renaissance bank in Moscow took the opposite view. ''Obviously the company is in deep crisis and the situation is very grave,'' he said. ''But we don't think the company will or should cut production. The most important thing they have to do is cut the number of people who work there.'' He pointed out that Norilsk was more interested in cash flow than profits, which made maintaining output essential. And he said that while the company employed 100,000 staff, its nearest competitor, Canadian INCO employed just 10,000. Basov added that Norilsk would find it hard to maintain the level of social provision it has promised. ''Personally I don't see how this is possible. The only idea is if Norilsk, which obviously does benefit from devaluation no matter what they say, is maybe planning to use some revenue from the devaluation effect,'' he said. Copyright 1998 Reuters Limited.