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

To: Probart who wrote (34781)	6/2/1999 11:20:00 AM
From: John Hunt	Respond to of 116912

<< Why then is the price going down even with the central banks selling etc. >> The central banks have been leasing gold to speculators at 1-2% per annum which is then sold into the market, driving the price down ... the money from the sales are being invested in US Government short term debt which earns several percent and the speculators are pocketing the difference. As long as they can continue to control the price of gold through continued selling, it is a great deal. However, at some point they will have to buy the gold to return it. Many think this will cause a run on gold as they attempt to cover what are essentially short or hedged positions. John

To: Probart who wrote (34781)	6/2/1999 11:21:00 AM
From: Gord Bolton	Respond to of 116912

Gold is a very political metal. Most of the gold in the world is above ground in vaults, much owned by central banks. The U.S. dollar is currently very high in value in relation to gold. The U.S. stock market has been doing very well. Even though demand for physical gold is high, there is a perception that there are better returns in holding U.S. dollars and investing the U.S. dollars in the stock market. Investors in general fear that gold will go down and therefore it goes down. I don't think that I can make it more simple. Perceptions may change and reality may change.