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

To: Bob Dobbs who wrote (26242)	1/15/1999 2:50:00 AM
From: Terry Swift	Respond to of 116796

Bob: If you're looking for wisdom regarding gold or gold stocks you're talkin' to the wrong guy. My crystal ball broke long ago. However, an opinion I have. A lot depends on what sort of pin pops this stock market bubble. If its the usual monetary pin; i.e., Fed tightening, leading to the usual general consensus among major investors that the top is in they will all head for the door at the same time and we will see panic selling across the board of all stocks, including the golds. The small investor will eventually follow when the pain level gets high enough. Gold stocks don't have much farther to fall (some juniors are trading near cash-in-the-bank values now) so their losses will be small compared to general market stocks and they will recover relatively quickly because they will be viewed as washed out value plays compared to the general market. The Fed has no control over long term rates and, IMO, eventually it will have to follow the market and tighten so the most likely "pin" I see is higher interest rates. I don't believe we will see the next bull market in gold until this stock market bubble is popped and investors start looking at something other than the DOW 30 and the internet stocks to invest in. Gold stocks haven't been on investors' radar screens for a long time and won't be until this levitating stock market crashes. On the other hand, if the Euro turns out to be a strong currency (unlikely, IMO) and it replaces dollars as a major part of the European Central Banks' reserves, China follows through with its statement to replace a major % of its dollar reserves with Euros, and the BOJ continues its new policy of not buying its long term bonds (thereby allowing interest rates in Japan to rise dramatically), the world could very quickly see a lot of unwanted dollars sloshing around. That would lead to a drastically weaker dollar, higher inflation in the US and a much higher gold price in dollar terms. We could then have our own version of a "currency crises" and gold would rise significantly in dollar terms. I agree with you that gold bullion will not be affected much by a stock market crash but panic selling of stocks will negatively affect the gold stocks, IMO. Good luck in your investments. Terry