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

To: lorne who wrote (25939)	1/11/1999 6:35:00 PM
From: Alex	Respond to of 116915

1/06/99 - Y2K PROBLEM MAY TRIGGER INVESTOR RETREAT INTO GOLD: REPORT <Picture> PERTH, Jan 07, 1999 (Asia Pulse via COMTEX) -- The year 2000 (Y2K) millennium bug may trigger a buying panic back into gold bullion, having a positive impact on the gold industry, a new research paper claims. The research paper by United States group Morgan Stanley Dean, claims financial markets could become more volatile due to Y2K-related problems and a growing number of investors now appeared to be turning toward gold as a potential storer of value. "Gold has proven itself to be a reliable store of value against unexpected economic and political instability for thousands of years," Morgan Stanley Dean said. "Perhaps Y2K will provide gold with another chance to regain its traditional lustre." The report said gold coin sales in 1998 had increased vastly over previous levels, with many buyers citing Y2K as a key motivating factor. "Given that Y2K-related costs are relatively small in the industry, even a $US2-$US3 per ounce increase in the gold price over a one-year period would likely be enough to turn Y2K into a small net benefit for the major producers," the research group said. Third quarter gold sales in 1998 in the United States were 50.3 tonnes, a 133 per cent jump above the first nine months of 1997. The World Gold Council, the industry"s demand experts, has said that Y2K had emerged as a third key reason why some investors were turning to gold. The millennium bug is a computer programming malfunction where in a standard two-digit date field, the year 2000 may be read as 00 causing possible major errors in systems. As for the likelihood of the Y2K bug causing headaches for the mining industry, the research group was confident that the major gold producers would be able to modify their internal mine-specific computer systems before 2000. "Considering the small total outlays required, plus the fact that the majors appear to be fully cognisant of the potential risks, we see very little likelihood that Y2K will be a major operational obstacle," Morgan Stanley said. But third-party non-compliance may emerge as a more-important issue than direct mine-site compliances, with the research group reporting that Placer Dome chief executive John Wilson had noted that "one weak link can break the whole supply chain." The research group"s Y2K assessment focused on the five pure gold companies in its coverage - North American companies Barrick Gold, Battle Mountain Gold, Homestake Mining, Newmont Mining and Placer Dome. ASIA PULSE -0- (C) 1999 Asia Pulse Pte Ltd