Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Alex who wrote (23631)	11/30/1998 5:40:00 PM
From: Enigma	Read Replies (1) \| Respond to of 116762

Alex "Traders added gold was also pressured by concerns of further bullion sales by the European Central Bank". Do you think there is any possible validity to this statement? Sounds like the sort of thing people make up when they want to rationalise a move. might make more sense if they had said 'banks'? E

To: Alex who wrote (23631)	11/30/1998 5:51:00 PM
From: goldsnow	Respond to of 116762

INTERVIEW-Dresdner Asia head sees Europe gold risk 10:39 a.m. Nov 30, 1998 Eastern By Simon Cameron-Moore NEW DELHI, Nov 30 (Reuters) - Today's low gold price still holds plenty of downside risks, as European central banks cannot be counted on not to sell off their bullion reserves, Dresdner Bank Ag (DRSD.F)'s Asia-Pacific Chairman Rolf Willi warned on Monday. Gold traded around $295 an ounce on Monday and hit a 19-year low of $270.75 in late August, but even that would look good if the depreciating precious metal begins to burn a hole in central bankers' pockets, Willi said. ''The central bank behaviour is the key to the future of the gold price,'' Willi told Reuters in an interview on the sidelines of the India Economic Summit conference organised by the World Economic Forum. Dresdner was one of the big German banks at the forefront of the bull gold market which peaked dramatically on Cold War fears after the Soviet invasion of Afghanistan at the start of the 1980s. ''When it hit $850 we were all smoking big cigars, just to see it go phut,'' he recalled from his days as head of treasury and trading in Frankfurt. But he said his sentimentality toward the metal was outweighed by market economics these days, and the bullish arguments for investing proffered by the World Gold Council, and producers were unconvincing. ''I cannot see it in the rose-tinted way in which other people would like to see it,'' he said. ''The commodity that gold is today is no longer a monetary instrument and this means that we will find ourselves, unfortunately, $100 lower than what we have today,'' he said, reckoning on the supply/consumption equation. The big unknown was what European central banks will do with their residual gold reserves after depositing a statutory 15 percent of their bullion reserves with the European Central Bank (ECB). ''The only thing I can say now really, is it cannot be good for the price of gold,'' he told a seminar at the conference earlier. He estimated Europe's central banks will be left with 11,000 tonnes after meeting commitments to the ECB. He noted that the Banque de France had given an assurance that it and Europe's other big two holders, the Bundesbank and the Bank of Italy, had no plans to sell but he suspected the instinct to unload a wasting asset will prove too strong. ''When it comes to reality, who wants to be the last one to be seen to lose further hundreds of millions (of dollars),'' he said. Europe's central banks will have to seek quasi-approval from the ECB before making any sales, but one had already shown where its self-interest lay before those rules kicked in, he noted. Luxembourg sold all but 15 percent of its gold reserves in order to comply with the ECB deposit requirements, releasing around eight tonnes onto the market, he said. This hard-nosed attitude to the world's traditional symbol of wealth has become increasingly widespread. Even in Middle East souks gold was regarded as just a financial investment, as women paid for their jewellery by weight and refused to pay a mark-up for the workmanship, and sold when the price rises. But in India old loves die harder, Willi noted. The country's unbridled appetite for gold, founded in social traditions, meant millions of dollars left the country annually, creating a large hole in the trade balance. Copyright 1998 Reuters Limited.