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

To: long-gone who wrote (34275)	5/20/1999 6:10:00 PM
From: Ken Benes	Read Replies (3) \| Respond to of 116763

Richard: The dichotomy that exists in the gold market is becoming more evident with each passing day. Two weeks ago with gold approaching 300.00, the BOE steps in and announces a sale of 400 tonnes, the price quickly falls to new lows. Concomitant to the decline, gold analysts rush to release sound bites of the successful demonetization of gold and predict new lows. Quickly, as the price retreats, cb's rush to support gold with press releases that the major gold holders including: Italy, Germany, the US, and France had no intention of selling gold. Today, we have information from the World Gold Council of the near record demand for gold in the first quarter, and the discourse continues with the cb's lending support to golds role as the ultimate store of wealth. What is going on here. Quite obviously, the price of gold was on the verge of a further breakdown with substantial consequences to some emerging markets who derive a substantial amount of their hard currency thru the export of gold. Richard, it seems very reasonable to me that with the increase in demand, and the closure or posponement of new projects, the large short position; the producers could exert a considerable amount of leverage on the side of higher gold prices. As you indicated in one of your posts Kinross will not sell forward at current prices, but would look favorable at spot prices of 300. This is tantamount to Clinton announcing: no ground forces will be committed to Kosovo as he commenses an aerial bombardment. Tipping your hand is not a wise strategy. Kinross is validating the strategy of keeping gold under 300.00. I will say it again, the producers have the potential to exert a lot of leverage in appreciating the price of their product. They have not used their advantages and the argument could be made that they have been acting in the interests of the bankers. Now is the time to reverse direction. It is not too late to ready a strategy whereby the producers pre-announce their intention to buy all of the gold the BOE intends to sell at the July auction. No need to wait for the quarterly auctions, we will take it now. Within a week of this announcement, offer to purchase the IMF gold immediately. Within a week after that communicate a correspondence to the Swiss people to speed up their ratification of selling 1500 tonnes of their gold. What do you think would be the result. Gold would begin to move very quickly, and the gold market would be destabilized. To accomplish this it would take no more than what the members of OPEC recently accomplished at their winter meeting. Oil has risen over 60% at a time when analysts were calling for perpetually low prices into the forseeable futured. The 2000 tonnes of gold made available from the IMF, the BOE, and the Swiss would not cover all of the producers hedged/forward positions. This is the time. The demand is there. A renewed interest in gold as a store of value is beginning to form. Let the producers put up or shut up. Ken