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: long-gone who wrote (33601)	5/10/1999 8:42:00 PM
From: goldsnow	Read Replies (1) \| Respond to of 116789

Now is it just me, or does it seem sort of odd that one would announce ahead of time plans to sell a bunch of gold? Wouldn't the mere mention of the fact cause prices to drop, thereby making the sale less lucrative? Oh well, apparently the British felt it necessary to tell the whole world, and that has depressed prices over $15 in just two sessions! There was lots of food feeding the bears now...IMF gold sales looming over the market, the Swiss taking a step towards selling some of their gold, and now the U.K. says they are selling gold. On top of this, the COT from Friday revealed funds have reduced their short positions...meaning some covering (buying) already took place. On the supply side of the equation, production of the yellow metal continues to operate at seemingly full steam, thereby exacerbating the weak prices. So there you have it...nobody, even Central Banks, wants to hang onto gold, and producers keep producing...not a very favorable outlook for the bulls at the moment. However, remember that just as much money can be made (or lost) from the short side of the market. Last week, technicals in gold looked positive, but technicals can't account for surprise announcements from foreign governments regarding gold sales. Downtrend resistance in the 293 area held, and those who waited to buy on strength have been able to avoid the dramatic decline. Even though gold broke out from an inverted head and shoulders last week, the techncials could not account for the surprise selling announcement, and prices are now at new contract lows. investorlinks.com

To: long-gone who wrote (33601)	5/10/1999 9:13:00 PM
From: bill718	Read Replies (1) \| Respond to of 116789

On the UK gold sale: Interesting comment today from the World Gold Council Chief Executive, ie: ''Gold is generally regarded as the asset of last resort as governments have only drawn on their gold reserves in times dramatic economic or social difficulties. The last sale of gold in France was in 1969 to deal with the financial consequences of the May 1968 uprising; in Portugal, where gold was sold following the 1975 revolution; more recently, India used its gold reserves to borrow US$1 billion to avoid default in 1991; and in the recent financial crisis in Korea gold was dis-hoarded to help the national economy." The above and more from: biz.yahoo.com The UK economy certainly appears to be in trouble. Here are some example stories coming from the BBC lately... "Company insolvencies in England and Wales rose 9.6% in the first quarter of 1999 on the previous quarter and increased 16.6% compared to the same period a year ago to a seasonally adjusted total of 3,729, a rate of 285 per week." news2.thdo.bbc.co.uk Here's another one re. small business in the UK: "...The survey showed that firms were shedding workers at the fastest rate for seven years, with 41% taking on fewer workers as opposed to 12% who took on more employees." news2.thdo.bbc.co.uk Also, the financial costs of Kosovo are high: "The war in Yugoslavia is going to be expensive -- no one disputes that - possibly as much as $2bn to $3bn per NATO member per year. These are the statistics generals and governments argue about." news2.thdo.bbc.co.uk **************************************************************** While the above suggests the sale is reasonable to me, on the other hand I am wondering why they would announce the sale in advance if they were trying to get the highest price? In this light, it seems more like a deliberate attempt to keep POG low than anything else. Smacks of deceipt and manipulation, just like the highly publicized IMF sale. My bet is a major correction with devastating consequences will occur at some stage when POG finally does rally seriously... causing major sell-offs in other sectors (like hi-tech, financial) ... margin calls, short-covering, etc. Hence the attempts to keep POG low for as long as possible by Slick & his friends.

To: long-gone who wrote (33601)	5/10/1999 10:04:00 PM
From: PaulM	Read Replies (3) \| Respond to of 116789

Fed Buys Coupons Again biz.yahoo.com A $billion worth by the way. First time in seven days bonds gained. Sven days ago being, I think, the last time the Fed did a coupon pass.

To: long-gone who wrote (33601)	5/10/1999 10:46:00 PM
From: PaulM	Read Replies (3) \| Respond to of 116789

The gold carry trade may explain why CB's are acting like $295 p ounce is the point at which the sky falls. If I sold gold short (borrowing at 1%), leverage the sale proceeds (perhaps to an extreme) and use this leverage to buy U.S Treasuries (at 5%), then I'm beginning to feel the heat. Specifically, the bonds I bought (at the earlier lower interest rate) are beginning to show losses. Just as in the case of the LTCM/Russian debacle, even small gold price increase would imply a double wammy: losing on my (long) bond position and my (short) gold position. That might cause me a margin call, resulting in my unwinding my positions, and possibly starting a chain reaction of global unwinding. And we can't have that happen, can we. Especially since, unlike the yen carry trade, there is no BOJ to cover my short position with lots of newly printed gold.