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THE GOLDEN POT gold news & views - charts & more not so much a forum but rather a news archive

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Gold -- Sharefin, 20:24:29 04/16/02 Tue

Emetra decides to stop trading

Emetra, the metals trading site that has been one of the dwindling band of survivors of the metals dotcom boom, is shutting down at the end of the month, reports Reuters from London.

"Due to the continued lack of activity on the trading platform, Emetra has decided to cease trading with effect from April 30," the company said.

Emetra was once touted as a possible threat to the London Metal Exchange (LME), the world's largest base metals exchange. It was formed in 2000, with the backing of MG, then a leading trading company.

"While we enjoyed a great deal of interest from the industry, this failed to produce sufficient trading activity on the site," said the company.

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eMetra gone, Quadrem says safe

eMetra is another big failure for Internet Capital Group which was an original investor along with British trading firm MG, Safeguard International Fund and subsequently Deutsche Boerse. The involvement of the German exchange was a bid to create a rival to the London Metal Exchange which did not have its own electronic system at the time.

The June 2001 liquidation of MetalSpectrum is perhaps the biggest failure to date, but is far from an isolated incident. Metique, MetalSite, Aluminium.com, Coppernet, Ferrousexchange, BaseMetalsExchange.com and MetalSmart are the other big names that crashed and burned after riding high on Internet hype. TheBullionDesk.com shelved plans to become a fully-fledged online precious metals trader and is now a news and data dissemination service.

GlobalCoal.com, MetalMerge.com, SteelScreen.com, Hong Kong listed WorldMetal.com and e-MetalMarket.com are survivor exceptions although they are hardly setting the world alight.

Quadrem is drawing attention now, especially since its primary competitor, Mining and Metals Procurement, collapsed before it even got off the ground.

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Online metals trading platform EMETRA to close

EMETRA was formed in February 2000, with a heavyweight backer in then-leading trading company MG plc.

It caused a real stir in the market with an announcement in June 2000 of a deal with Germany's Deutsche Boerse to set up a metals derivatives trading platform.

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Gold -- Sharefin, 20:19:02 04/16/02 Tue

Japan may drive gold price to $330

Gold prices might rise to $330 an ounce this year, the highest since 1999, as demand gained in Japan and violence in the Middle East would lead investors to buy the metal as a safe haven, analysts said yesterday.

Gold prices have gained by as much as one-tenth this year as Japanese government limits on bank deposit insurance spurred a tripling of demand for gold from Japanese investors.

Speculation that prices will rise further encouraged companies such as Newmont Mining, the world's biggest gold producer, to spend $8.5 billion in the past six months buying new mines.

"What you're getting in Japan is a real crisis of confidence in their banking system," said Brian Bath, the managing director of Australian Gold Refineries, which is half-owned by Newmont and refines two-thirds of Australia's gold production. "People are going into gold coins or any other gold as a defence against any concerns that they have."

Japanese investors bought about 45 tons of gold (1.45 million ounces) in the first quarter, up from 12.6 tons a year earlier, the World Gold Council said.

"The Japanese have lost confidence in political leaders to right their economic woes and are buying gold by the bucketload," said Tamara Stevens, the Australian Gold Council's chief executive.

Japanese demand might rise again in early 2003 if banking rules were changed again, analysts said. The nation's investors were concerned about the weakness among Japan's banks, which hold about '151 trillion in problem loans.

"The gold boom may emerge again before next April, when the government will expand its limit to other deposits," said Nobuyuki Kudo, a gold researcher at Ace Koeki, a Tokyo-based commodity futures brokerage. "The rising trend in gold demand from Japanese investors will continue."

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Gold -- Sharefin, 20:12:17 04/16/02 Tue

Sultan & Shaitan

As a matter of fact, the US dollar has no cover. It is a cheque written by a bankrupt wastrel, good to be framed and put on the wall. Provided they issue as many dollars as they need, it is not amazing there is one superpower and all the rest are in debt. It is not a secret: brave Fidel Castro tells it at every conference, thus assuring endless hostility of the US.

The US financial wizards, Greenspan et al, play with us an old trick of confidence, called a ‘pyramid’. Such games were played in many countries, notably in Albania and Russia, by local tricksters. Usually they end with a catastrophic crash. The Judeo-American con-game differs by its size. It is global. Otherwise, it the same pyramid. 90 per cent of all financial transactions are speculative transactions, writes Noam Chomsky. The pyramid is supported by a massive propaganda brainwash to encourage consumption and expansion. Ordinary people of the US and its allies get no fun out of it: in England, child poverty grew threefold since Margaret Thatcher came to power. In the US, there are millions of homeless children. Americans, Brits, Germans are deeply indebted, as the countries of the Third World.

The US dollar succeeded to replace gold, because it offered an attractive fixed interest rate. The interest rate has become a honey trap for the mankind; it has caused the burden of debt, impoverished states and persons, created the ugly aberration of globalization. Not in vain, Sam Bronfman the Bootlegger, the founder of the powerful Bronfman dynasty and father of the World Jewish Congress chairman, when asked what the most important human invention is, replied without hesitation: ‘interest rate’.

The US dollar is not ‘money’ anymore; it is a license, like a Microsoft license, or a patent by a pharmaceutical company. Whenever the US rulers decide, they can freeze the assets of a rebel country. Iran had its assets frozen, Libya, Iraq; surely Saudis will suffer the same fate the moment they will object to American policies. Here is a good riddle for Bilbo Baggins: what is overpriced, unsafe, green and greatly desired by fools?

In the last days of the war in South East Asia, I travelled by a slow junk boat down Mekong River, in the company of fellow-journalists, adventurers, local peasants, pigs and chickens. The boat was frequently stopped, searched and taxed by warring parties, but it made an unhurried progress from the old royal capital of Luang Prabang towards Vientiane. In a sleepy village of twenty huts and three elephants, where we stayed overnight, I wandered into a Chinese shop. In front of me, a dark and dour Pathet Lao guerrilla in rubber tyre Ho Chi Minh sandals and AK assault rifle on his back completed his modest shopping and paid for it with some funny money. I recognized its colourful pattern: it was Pathet Lao currency. As the soldier went away, I took out a few Pathet Lao bills I got as a change on the boat and asked the shopkeeper for a pack of cigarettes. The Chinese did not move. “But I have seen you accept this money”, I protested. He replied with wise words worthy of Lao-Tzu, “Only from people with gun”.

The US dollar is still accepted by the world community out of fear, and that is why the US military budget grows every year. That is why the hermit kingdom of North Korea, Iran and Iraq became The Axis of Evil: they do not accept dollar. But fear is a bad adviser. The collapse of the pyramid is imminent. The meltdown began in August 2001, as the Economist advised its readers on 25.08.01, and, unless the timely intervention of persons unknown on 11.09.01, the US dollar would be now of value to numismatists only. But the World War III can only delay the completion of the process.

Sheer prudence and enlightened self-interest have caused the wise rulers to move out of the dollar sphere. European countries launched Euro, the Japanese Yen rose sharply. But their attempt to substitute paper by paper while keeping interest rate is necessarily flawed. In a revolutionary proposal, Dr Mahathir, the Prime Minister of prosperous Malaysia, proposes to return to gold and silver, more specifically to the idea of golden ‘Islamic’ Dinar as a zero-interest rate reserve currency for the world. His great idea to undo the dollar and loans’ double hold deserves to be compared with the reform of Solon, the legendary Sage of Athens, who cancelled debts, defeated Oligarchy, returned land and freedom to people. If implemented, it would put an end to the suffering of Palestinians and to suffering of the Third World in general. The US dollar would fall as fast as in 1929, and with it, the US support for Israel and your debts.

It should not be seen as an attack on America. The ordinary Americans would regain their homes from the banks’ clutches, as mortgages would disappear. The burden of debt would fall off the back of people. True, George Soros and Mark Rich would have to apply to welfare office, together with many ardent supporters of Israel. But it is hardly a misfortune: they would be too busy to make mischief as they would have to earn their living.

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Gold -- Sharefin, 20:04:23 04/16/02 Tue

Gold Fields: Gold prices too low

"At US$300 (an ounce), the gold price is not yet high enough to either justify massive increases in expenditure and/or development of any resulting discoveries," Gold Fields chief executive Chris Thompson said.

"Most of what is available out there can't really be profitably developed at $300," Thompson told the Australian Gold Conference.

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Gold -- Sharefin, 19:59:39 04/16/02 Tue

More ride left in gold merger wave

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Gold -- Sharefin, 19:56:00 04/16/02 Tue

Move out of golden hedges continues

Gold mining companies have reduced their hedge books and were willing to sell more of their commodity at market prices as bullion prices creep higher, industry executives said.

In Australia, hedging continues to fall out of favour, dropping nearly eight percent in the December quarter as mining houses speculated on an upturn in world prices.

The reduction to 34,2-million ounces from 36,5-million took in a wide swathe of the industry and was led by three of Australia’s biggest mining houses - Aurion Gold, Newcrest Mining and WMC- and the former Normandy Mining.

Hedging has been criticised by industry behemoths such as Newmont Mining and South Africa’s Harmony Gold, avowed non-hedgers, for long restricting bullion’s upside by effectively erecting a price ceiling.

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Gold -- Sharefin, 19:41:13 04/16/02 Tue

HK's jewellery retail sales down despite a rise in tourist arrivals

The year 2001 didn't ring in very well for jewellery, watches, clocks and valuable gifts retailers in Hong Kong. The retail sales of the above items fell by a staggering 5 % by volume to US$2,721 million as compared with 2000.

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Gold -- Sharefin, 19:36:37 04/16/02 Tue

Early NY gold drops below $300/oz, silver on ropes

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Gold -- Sharefin, 19:31:50 04/16/02 Tue

Goldman's McConvey Comments on the Outlook for Gold Prices

Daniel McConvey, New York- based vice president of global investment research at Goldman, Sachs & Co., comments on the outlook for gold. He was speaking with reporters at the Australian Gold Conference.

McConvey raised his forecast for the long-term gold price to $325 an ounce because of an anticipated decline in output. Spot gold recently traded at $299.45.

Annual U.S. production may fall to about 300 metric tons during the next five years, from 350 tons, he said.

On the outlook for gold prices, and his stock pick:

``We've had quite a run from $275 to $300. A lot of the jewelry markets, the markets in India etc. have to adjust to that new price. Without another event, we're going to settle here for a little bit.

``If you want to be in a company that's leveraged to the gold price, in my universe it's Newmont Mining Corp. Relative to the other North American production only about one year of its production is hedged.

``It's got great leverage and it's the favored stock for those people that believe the gold price is going up.

``The smart investor has been in the hedged stocks for the last number of years. Going forward it's a tougher call.''

On a central bank agreement to limit gold sales:

``The chances are high that it will be renewed but I don't think it's going to be renewed early. The problem is you've got 15 central banks that are involved in this -- try to get them all to agree. Until they have to it's going to be very difficult.

``It's not a sure thing -- if the gold price went really high they might think `there's no real need for this'.''

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Gold -- Sharefin, 19:29:40 04/16/02 Tue

Gold Fields' Chris Thompson Discusses Industry Consolidation

On consolidation:

``Consolidation is going to slow down. The opportunities left here in Australia are getting few.

``The thing that disturbs me in the outlook for the gold business is the hiatus that has taken place in exploration in the last five or ten years that almost guarantees a decline in production.

``That decline in of itself has implications for the price. It used to be an issue that was on the edges of the radar screen - - it's now advancing to a point where most of us can see it.

``Simply by buying assets we're camouflaging the real issue and the real issue is a shortage of reserves. The old clich‚ of shuffling the deckchairs on the Titanic is starting to apply.

``At $300 the gold price is not yet high enough to either justify massive increases in exploration expenditure and/or development of any resulting discoveries. What is out there can't really be developed profitably at $300.

``The debate perhaps needs to shift from the issue of who's going to win the consolidation race. So far it hasn't necessarily been a value-adding proposition from some of the deals I've seen.''

On the effect of AIDS on Gold Fields' business:

``AIDS is not as big an issue as you would ordinarily think. While it will have an impact, even without interventions we calculate it will cost probably about $10 an ounce. With interventions, and we have a number of very good interventions under way, we can probably get it down to about $4.''

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Ross -- Suresh Garg, 13:16:40 04/16/02 Tue

Marvellous chart. Thanks.

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postage vs gold -- Ross, 11:48:20 04/16/02 Tue

After reading beesting's link to the Armstrong letter on
Miningweb, the following statement struck a chord:

"Gold is no longer a barometer of inflation, we all know that
a postage stamp is... and maybe a loaf of bread..."

I thought it would be nice to whip up a little chart with
the $POG overlaid on the price of first class postage.

here we go:

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Silver's 2-pronged attack - @auspec -- Giovanni Dioro, 09:10:34 04/16/02 Tue

Auspec,

I think you're right about this perpetual runaway bull market aspect being a bit of wishful thinking. Of course things come and go like the tide and then come back again - peaks and troughs, so to speak. Well, silver has been in a trough for awhile, and many of us think its tide is about to turn significantly for the better. However to say that silver is going to become more or less extinct or can be mined and consumed out of existence goes against the principle of "conservation of matter".

Nonetheless, I do believe the fundamentals for silver look very promising on two fronts.

Firstly, US money supply been expanding very rapidly over the past years. This bastardisation of the money supply should be inflationary, and it is in many respects. When you think about how much things cost years ago and what they cost today it's ridiculous.

Case in point, a couple of weeks ago I spoke to an elderly man in a betting shop. We talked about how prices have gone up a lot with the introduction of the Euro. He said he remembered paying 7 pence for a pint of Guinness in his youth ($3.00 today), although that was the old money he said.

"How much was that", I asked him.

He said, "7 pence was in old money was......."

I said, "7 coppers anyway" (7 copper pennies) to which he nodded his head.

I would think that the amount of copper in 7 old pence might be worth today around 15-20 cents. So today it takes roughly 20 times the equivalent value of copper to buy a pint today than it did 75 years ago. Many comparisons with silver and gold could be made as well. My point is that most commodities (e.g. silver) have not kept pace with inflation in other items, and are thus undervalued.

Secondly, we must look at the cyclical nature of commodities in general and how it relates to silver. Usually there is a cycle in which a shortage of a given commodity brings forth higher prices. These higher prices spur increased production which in turn leads to a glut and then lower prices. The lower prices lead to lower production and an eventual shortage again, and thus the cycle repeats. Malthus observed this cycle with pigs which was a 3 year cycle, influenced by the time it took to raise a pig to sell to market.

In regards to silver, we are seeing that stage where today's relatively low prices are leading many mines to be shut down. Coeur d'Alene announced just yesterday that it was facing a cash crisis, and many other mines are under pressure. Exploration has also suffered, as you mentioned. This should therefore lead to a cyclical shortage, and much higher prices in the years to come.

The only thing holding it back in my opinion are the stockpiles of above ground supplies, and it is hard to say how much exists, and how much is for sale or lease. One of these days, much of the above-ground sources are either going to be exhausted or they are going to be "not for sale". Then we will see the feeding frenzy.

So when the day comes when silver shines again, we will likely see it rise in price due to 2 factors - one being due to inflationary pressures, the other being due to a cyclical nature. The cyclical nature could lead to a 5-15 year boom, based on your estimates on how long it takes to get a mine into production. I think we both agree that this wouldn't last forever. It would just be part of a multi-year cycle. However prices could still stay at relatively high levels due to built up inflationary pressures caused by the constant printing of money by the central banks.

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Sharp pullback -- Cyclist, 08:32:17 04/16/02 Tue

in gold and expect hui to check out 93 and 88 within previous given parameters.
Oil cycles looking to top in second week of July.

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More thoughts on where we are -- Mike Stewart, 08:14:03 04/16/02 Tue

Shell, another consideration. The Dynamic Canadain Precious Metals fund is a Canadian fund that has a high percentage of juniors in it. I use it to cover this area with some pension plan money. In a bull market, it tends to lag a bit in the early years and outperform in the later years. I assume that this is a result of "public" money coming in at the end of a bull market move. In the last bull, 93-96, the fund rose by 377%, close, but stronger than the big cap Toronto gold index (up 310%).

Since the Oct 2000 low, this fund is up 123%, on track with this timeframe from 1993-96 (17 months into it), and slightly underperforming the 1993-1996 price pattern at this time. It is not overheated, nor overpriced at this time from a long term view.

FWIW, the big South Africans were very strong early in the 93-96 bull and then slowed down in the last half. They were spent.

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Gold Specimen -- Sharefin, 07:39:48 04/16/02 Tue

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Shell -- Mike Stewart, 04:31:09 04/16/02 Tue

Shell, I have noticed that there are three worlds out there right now. Unhedged majors, juniors and the hedged majors. As you know, the XAU has a good blend of these as hedgers like Anglogold, Barrick and Placer Dome are offset somewhat by Newmont, Harmony and Meridian.

The Unhedged South Aficans have been boosted by the weak rand. That is hard to factor in. The hedged majors are weaker because investors are looking for pure upside at this point. This leads me to wonder, like you,whether the XAU will perform normally. Newmont is about the only pure benchmark around now. Unhedged, North American and big.

The Toronto Gold Index has the same problem, so it doesn't help to look there. Too much ABX/PDG.

My opinion is that outside of the rand benefit, South African unhedged mines will always vastly outperform the XAU in any bull market. USERX reflects this. The rand is a bonus. This is why I bought them and ignored North America.

Bull markets last around three years in gold itself. The stocks lead by six months to a year at the start. Some gold bulls start strong and finish weaker (93-96), other are the opposite. Along the way, we can expect three or four sharp corrections of 25 - 33% in the XAU. (A stock like Drooy may be cut in half). We had one already late last year, assuming that the bull in gold stocks started in Oct 00. It is usually very difficult to buy and hold in a gold bull with such large swings.

I am still waiting for the XAU to rise to .32 of the gold price, but realize that it ABX/PDG/AU begin to suffer seriously from hedge postions, rather that just lagging the market, we can't expect the gold indices to work.

For the record, I reduced my holding recently as sentiment is too bullish for me, I was way up on Drooy/Hgmcy/Hcmcw/Gold. I kept the Gold Fields and some juniors(total 13% of my partnership) and will return on a correction. If I am wrong, I can live with it as I have hit my targets on these shares anyway. I try to avoid "greed vs fear" extremes.

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mike stewart-if the xau [full of hedged mines] had risen as much as userx for instance, the ratio -- shell, 22:20:17 04/15/02 Mon

to gold now would be .31----many other gold funds are up more than userx, ie 80 to 110%--would appreciate commment

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Gold & Hedges -- Sharefin, 09:51:19 04/15/02 Mon

I'm not sure on this and just taking a stab in that dark so correct me if wrong.

I presume that most all of these gold hedges that are being wound down (Harmony 2.7 million ounces - Anglogold 1.7 million ounces - Goldfields 230,000 ounces - Australian producers reduced hedges by 7% etc etc) are being transferred out to a counter party through paper contracts of gold rather than by closing out the actual position with physical bullion. This means that the counter party is left still hold a major position and carrying all the risk.

This would remove the risk from the gold producer and transfer it across to the new holder - the bullion banker who crossed out the position.

So some major paper gold holder is increasing their exposure immensely.
Perhaps they consider themselves to big to fail.
I don’t know but I doubt the original hedges are being closed out with physical.

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From Midas -- Sharefin, 09:16:13 04/15/02 Mon

The US system is now creaking with debt. The deflationary forces of debt are so strong that it is taking more and more phony legal tender to offset the forces of deflation.

Meanwhile, it's taking an increasing amount of so-called dollars to buy an ounce of true money -- gold.

This is a clear and present danger to the central banks. For should gold start surging -- say 400, 500, 700, a thousand, it could blow the system apart. It could do that because the population would start asking questions, they would start asking why the value of these so-called dollars were sinking so rapidly in terms of real money.

Gold is your and my way of getting out of (defending ourselves against) the Federal Reserve system. But the Fed does not want you and me out of the system. The Fed wants us to live within the system, because they have the power; they run the system.

OK, enough background. The trend of almost everything but housing appears to be declining against real money, gold. How long will this last? I don't know -- I only know the trend. I think this trend may be the beginning of something BIG, but I obviously don't know for sure.

However, I'm not taking any chances. I want my foot in the water, and I think your foot should also be in the water. The best way to do that is to buy gold stocks or even to buy some gold coins -- or preferably both. If you only buy one gold stock I'd say buy Newmont, but it's generally better to buy a few stocks in a group -- say NEM, AEM and GG.

My good friends and gold experts for decades, the Aden Sisters, are quoted in Barron's today on page MW19. The Adens' advice is that 40% of your "investing portfolio" now be in gold items. The Adens note that gold is stronger than stock, bonds and currencies -- and that's a clear fact.

How much of your portfolio you want in gold is a personal choice, but I would at least get your foot in the gold pool now. Alan Greenspan won't like it, the Fed governors won't like it. But you may like it. You may like it a lot before the next few years have passed.

_____________
Also:
The Gold Story

Several people have inquired about my gold stocks and whether or not I would attempt to sell these near the highs and buy them back on a retracement. That strategy sounds tempting, but its too risky to let go of these positions. Something could happen overnight to cause an explosion in gold prices, and we do not want to be left behind.

An interesting story popped up today. We were approached a couple of years ago by a group who wanted us to finance their business. They were involved in brokering and investing in gold, mainly on the short side. There are many quick buck artists here in Los Angeles with all kinds of schemes to speculate on gold. And given the miserable performance of the metal the last 20 years, most of these guys are speculating on the short side.

Today, I found out where these guys went. They got their deal financed over at General Bank, a local bank owned by Chinese Americans. General Bank is known as a sweat shop, with intense pressure on the lending officers to drum up lots of commercial loan business.

Well, today, GBC Bancorp (General Bank’s holding company), was smoked for a huge loss today after it was revealed that large loan losses were going to have to be taken as a result of bad loans made to “metals dealers” encountering “severe liquidity problems”. Sounds like those guys betting on the short side are getting squeezed.

“GBC Bancorp GCBC is off $4.20, or 13.1 percent, to $27.82, in afternoon trades. After Thursday's closing bell, the Los Angeles bank holding company disclosed two potential problem loans totaling $27 million. The company said that the loans are to companies in the metal importing and trading business that are having liquidity problems. "We cannot estimate at this time the extent to which the collateral plus insurance coverage will repay the loans," said the company in a press release. In light of this situation, GBC is recording an additional $5.4 million charge-off associated with the loan, reducing its book value to zero. For the first quarter, the company expects to record a provision for credit losses of $18.5 million. Including its share of an impairment loss related to its investment in an aircraft finance trust, the company expects to report a loss of about $3 million in the first quarter.”

I suspect that there are going to be a lot of squeezes out there if we have another breakout on gold. So it is simply too risky to let go of positions on the gold mining stocks.

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Leonard Kaplan -- Sharefin, 09:03:32 04/15/02 Mon

GENERAL COMMENTS:

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Gold -- Sharefin, 09:02:13 04/15/02 Mon

Platinum versus Gold / Considerable Slack

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Gold -- Sharefin, 08:53:58 04/15/02 Mon

Gold sets standard in Japan

"It is certainly possible that a rise in demand for gold bars in Japan raised the international price of gold in February," said Masaaki Kanno, economist At JP Morgan. "The estimated purchase of gold in January and February is only 0.2 per cent of annual savings by the household sector. This implies that the impact of a change in Japanese householders' investment can be so big that it could affect the global market prices of financial assets."

A broker at one of Japan's leading general trading companies said she expected gold retail sales to increase if the price fell even slightly. "The public are holding long positions in gold and enjoying the surge in prices.

"If prices fall, brokers and short-term traders will sell but the public will buy."

"It's calmed down since February's peak, when we had crazy sales. But even now people come in with tens of millions of yen and take several kilos of gold bars home with them," said Mr Matsumoto.

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Gold -- Sharefin, 08:46:38 04/15/02 Mon

Canada's TSE 300 Poised to Rise, Led by Gold and Oil Producers

Gold shares may rise as analysts forecasted bullion may climb to $330 an ounce this year. Japanese worries about that country's banking system and concern about Middle Eastern violence may lead investors to buy the metal as a safe haven, analysts told Bloomberg News.

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Gold -- Sharefin, 08:44:55 04/15/02 Mon

Barrick Gold focuses on organic growth

Canada-based Barrick Gold, the world's largest gold miner by market capitalisation, expects its future growth to be primarily driven by new projects and expansions, though acquisitions still remain on the agenda.

But at the Super Pit mine in Western Australia, the country's largest single gold mine, Oliphant is confident Barrick can work well with new equal partner Newmont of the U.S.

Barrick acquired its stake in the Super Pit through its merger with Homestake, while Newmont acquired its stake earlier in the year through its takeover of Australia's Normandy Mining.

Noting that the mine has underperformed in the past, Oliphant said "we want to ensure that the Super Pit, which was a key part of both of acquisitions, performs as well as possible."

"We want to do it better than how it has operated in the past and I'm positive our companies can do that," he said.

"I think before there are any moves made, both companies need to understand better what the challenges and opportunities are," Oliphant said.

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The Super Pit - Kaloorlie


Monster dump trucks

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Gold -- Sharefin, 08:20:36 04/15/02 Mon

Gold Higher But Seen Holding In Range

"Nobody wants to sell short because there is no guarantee that the situation in the Middle East won't get worse," said one. "People are happy to hold onto their longs for now and just see what happens."
This reticence to sell gold should help keep prices above $300/oz and the longer the market can remain strong, the more physical buying should emerge as end users become accustomed to higher values.
Other sources have noted that fresh investment interest for gold has been a feature of recent trade and could help bolster any gains.

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Gold -- Sharefin, 08:17:50 04/15/02 Mon

International gold producers go all out to shine

Rationalisation among gold companies is expected to continue, the head of one of the world's biggest gold companies said yesterday.

Randall Oliphant, president and chief executive of Canadian-based Barrick Gold Corp, said on the opening day of the Australian Gold Conference in Melbourne, that rationalisation was leading to a healthier, more efficient industry.

"All of the companies in this industry are talking to each other, trying to work out if something can make sense, and I think the trend that started will continue," he said.

"As an industry, we will undergo more consolidation, further rationalisation, a simplification of ownership structures, and a greater focus on achieving competitive returns."

But he noted that market capitalisation of the industry, at less than $US50 billion ($A93.7 billion), still struggled to register on international investment radar.


He said the number of players operating in the global industry had shrunk dramatically: between 1997 and 2001, the number of mines in Australia had fallen to 62 from 137, and the number of companies to 35 from 86. But the average size of the remaining producers had increased to 258,000 ounces a year from 117,000 ounces.

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Gold -- Sharefin, 08:15:45 04/15/02 Mon

GOLD - South China Morning Post

"It seems like we do have a lot of new money coming into the business nowadays. There's very good interest in buying this market on dips," an analyst said.

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Gold -- Sharefin, 08:13:59 04/15/02 Mon

Russia's gold, forex reserves up 1.84 pct 1Q to 37.295 bln dlr

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Gold -- Sharefin, 08:12:38 04/15/02 Mon

Gold price rise buoys prospects of miners

An expected surge in the gold price has painted a rosy picture for the mining sector, according to Australian-listed miner Oxiana Resources.
Gold was expected to surge to US$350 an ounce in the next five years due to a supply shortage, chief financial officer Steven Armitage said.

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Auspec - silver stocks -- Sharefin, 08:03:19 04/15/02 Mon

Silver Bonanza is as good today as when it was written - an excellent book.
I've emailed Franklin & suggested he do a rerun for this coming bull market.

As to the contents -
There is basically no content on the manipulation except for recognition that major players move markets - just like today (:-)))
Also little content on in-ground stocks.

In a bull run lasting a year or two I don't think in-ground stocks will be a worry.
The price will be forced high long before the product comes to the markets.
Be it that we get a major market tank (the main reason why the metals will fly) then I would guess most base metals producers will slow up which will further aggravate the supply/demand scenario.
Maybe they open up a new mine or two - I doubt that there will be great impact on the supply.
There's probably five years plus into it before the miners have reacted to the price rise and hiked production higher.
I presume that the silver rally (and gold) will be long over before they get production running.

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Giovanni Dioro...Silver -- Cobra, 06:23:50 04/15/02 Mon

I've been told by miners in Virginia City Nevada that there
is still enough silver beneath Virginia City, the value of which, " Would pay off the National Debt " The EZ silver has been taken. One said a sustained price North of $20 oz would be needed to justify the expence to dig it. I've looked at several mines there, they are old and unstable and Deep. Many are flooded. Silver can be had but at a Hell of a price
from Virginia City. It is almost a Ghost Town now. Virginia City and surounding area is the Largest known concentration of AG on the planet earth.

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Shell - Faber Article -- Mike Stewart, 00:17:10 04/15/02 Mon

Use Donald's link, then click "Market Commentary"

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Periodic Ponzi Update PPU -- $hifty, 22:49:26 04/14/02 Sun

http://home.columbus.rr.com/rossl/gold.htm


Periodic Ponzi Update PPU

Nasdaq 1,756.19 + Dow 10,190.82 = 11,947.01 divide by 2 = 5,973.5 Ponzi

Down 47.33 from last week

Thanks for the link RossL

Go GATA

Go Gold

$hifty

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donald--your link to faber just leads to his title page -- shell, 20:29:08 04/14/02 Sun

.

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A Golden Opportunity (by Marc Faber) -- Donald, 15:10:25 04/14/02 Sun

click here

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Sharefin -- auspec, 14:16:13 04/14/02 Sun

Oops, it's auspec here.

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Sharefin/Silver -- AuAg, 14:15:09 04/14/02 Sun

Silver Bonanza was a huge winner then in spite of their predictions yet to come to pass, and it certainly has been a long time since written. That should just make us all that much more bullish. The one variable that I do not recall being discussed in the Silver Bonanza is the current paper/physical silver manipulation theme that is now so apparent. They had no idea at that time that CBs and Govts would go to the extremes they since have to suppress silver and gold. If I had known what the feds were up to in these metals I would have avoided them like the plague. Same with the stock market and the 90's bubble, who knew what they were up to? Who'da thunk it? Now we know. Now, they give us the opportunity of a lifetime as they have hit the extremes.

As far as $50 POS. Mining will increase as fast as it can until it overproduces and kills the market. This is true IF there is sufficient silver to find and produce, and I'm told and believe there is. The variable is how many years it will take them. I have somehow lost my copy of Silver Bonanza, do they get into remaining underground supply, known and or projected at various POS levels? Figures at $5 or $20 are fine, but if one is projecting $50 Ag we must look there as well, no?

At $50 POS recycling will reach a whole new strata, any newly mined silver will be more likely to be re-cycled as well. Lots of investment silver remains, that's what we're doing isn't it? Some will sell at $15 and some at $50, and some will hold out for $200 or $500. All will make nice profits ONLY if they cash out somewhere above their buying levels. Some will sell early and some will fail to sell altogether, simple human nature.

You can be sure of this: at $50 silver will be flying out of the woodworks as well as the groundworks. I'm going to keep my ear to the ground.

Glad you're back!

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giovanni dioro -- auspec, 13:45:16 04/14/02 Sun

Hello g. v., I must say I totally agree with everything you say in this recent post. How's that for getting along {smile}? Am personally a mega silver bull, but just cannot accept a 'perpetual' silver bull, which has been described as 50 years or more. I haven't seen the facts to sustain it and simply have too much faith in the natural commodity cycle. There is only one variable that will stop the commodity cycle from taking place along somewhat 'normal' lines. Will get to that very shortly. A normal commodity cycle is drastically less than the 5 to 15 years that it ordinarily takes to bring a silver mine into production, depending upon the size of the mine. So my projection of a runaway silver bull for 10 to 15 years ONLY is still anything but normal! These are extraordinary times in silver, for sure.

Now, what is the unknown variable that will {likely imho} or will not allow a run away silver bull for 50 years or a 'lifetime' as we all have heard. It's the amount of remaining underground silver supply as probably the hugest variable. The folks that are making the longest term predictions do not know what the quantification of this variable is, and we've pretty much come to the conclusion that it is simply UNKNOWN at this time. You can't make such predictions w/o all the facts, it simply becomes emotionalism, no?

My resource sources have led me to believe there is PLENTY of remaining underground silver. Give the miners, who happen to be extremely efficient {especially the explorers}, the time, money and incentive and they WILL bring forth the goods. Mining is slow, but it's simoly not 50 years slow! Is the silver there? That's the Q!

Discoursing along these lines has led me to exactly what I was beginning to suspect:

NOBODY KNOWS HOW MUCH UNDERGROUND SILVER REMAINS!

At lest nobody yet that we have been able to querie, Ted Butler doesn't know, Charles Savoie doesn't know, the US Geological Survey doesn't show. How much is in China for sure? Other 3rd world countries or unsurveyed countries?
There is a common misconception that the world has been fully 'explored'. Silver hasn't come close to being fully explored at $5 POS, much less a $50 POS!!

All the variables have to be recalculated at $50 POS, the threshhold for a mine becomes much smaller, no? You cannot project perpetually high silver prices w/o gathering all these unknowns into some form of concensus.

I will be thrilled with whatever POS the coming silver bull brings, if it lasts 10 to 15 years, WOW. Will also keep a very close eye on silver exploration and mining while it all unfolds.

Now that some of these mining questions are coming to the surface the answers may soon be forthcoming.
Regards

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Charts Online -- Sharefin, 11:24:32 04/14/02 Sun

Sharefin's Charts

It looks like someone's trying to do a hatchet job on the CRB through attacking various components.!!!

The PM's should move up solidly when this resistance line just above us is broken.
AU-AG-PL Sentiment Index
The support-line was very strong and I believe triggered this PM rally.
And I expect breeching this resistance line will lead to a major rally in the prices of the metals.

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Auspec - silver stocks -- Sharefin, 11:13:39 04/14/02 Sun

I just spent a couple of weeks away on holiday and took with me a book titled "Silver Bonanza" by James Blanchard & Franklin Sanders and thoroughly enjoyed walking back through history with silver. It was an excellent read & very informing and reminded me strongly of Peter Bernstein's book "The Power Of Gold".
Anyone who is interested in silver should read this book.

Here's some text that's quoted from the book:
---------------------------------------------

Just how much silver is there in the world? In 1992, the Silver Institute commissioned Charles River Associates, INC (CRA) of Boston to answer that question.

CRA found that from 4000 B.C. through to 1991, 37.5 billion troy ounces (1,165,132 metric tons) of silver has been produced. Only about 25 percent of total world silver was produced before the American Revolution. The discovery and exploitation of the huge American deposits after 1492 flooded Europe with silver. Later, technical advances in silver extraction (including production as a byproduct of base metal mining) led to even greater silver production.
CRA estimated that of the 37.5 billion ounces of silver ever mined , only 19.1 billion ounces still exists in the form of bullion, coins and medallions, and silverware and other artforms. Bullion and coins plus medallions are conventionally defined as "total stocks," that is, stocks readily available to the market.
However, the important question is not how much silver exists above ground. Rather, how much of this silver is available for sale, and at what price? The CRA study says, "The common perception in the market that silver stocks are very large and thus readily available is wrong. The stocks are large, but not all readily available."
If large stocks are available, even at bear market bottoms, they aren't just floating up in the air. Somebody owns them. The presence of large stocks doesn't necessarily mean that nobody wants silver. Large stocks can mean that sophisticated investors are accumulating silver for the long term,
Including bullion, coins and medallions, and silverware and art forms, CRA places worldwide stocks of silver available to the market at prices of $10 or less at 541 million troy ounces. Some of this silver includes business stocks required for production. It might come onto the market at very high silver prices, but only temporarily. Silver will have to be re-bought to carry on business. Most coins and medallions are held by families in small amounts, for sentimental or other reasons. This silver is not terribly responsive to small changes in price. Finally, under normal market conditions, very little silverware or silver artforms will hit the market. Either they are spread out among small holders who have an emotional attachment to them, or they are held for their high value as art. No one is going to sell a Bernini salt cellar because the price of silver jumps from $5 an ounce to $20 an ounce. Likewise, churches around the world won't line up to hock off their chalices, crucifixes and decorations just because silver's price breaks through $30. At prices of $20 an ounce or less, CRA estimates that 16.85 billion ounces of silver are simply unavailable to the market, except in small increments over many years if high silver prices persisted.
One anecdote will serve to illustrate how much of this silver supply available at $20 an ounce or less has been exhausted. Anyone who participated in the Mad Silver Melt of 1979/80 can relate similar tales of priceless heirlooms sold for scrap. We remember particularly one visit to the scrap dealer about 1983 when we saw on the shelf some pieces which he had pulled out of the melt pile. It was a silver tea service, engraved as a gift to the Mayor of Augusta, Georgia in 1854! If family heirlooms such as this are lured into the melting pot by high silver prices, we can speculate that not much heirloom silver is left to melt for market at prices under $30 an ounce, much less $20.

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Ten years has passed since this was written and I'm sure much of the stockpile since then has been used up.
Attitudes towards the PM's have soured over this last decade and what heirloom silver that was left should be in strong hands now so to speak.

Though the total amount of silver on this earth surprised me to the upside.
The total supply available to the markets way back in 1992 surprised me to the downside.

There are some important tenements to the above passage that bear thinking about.

Giovanni - I'll go for the feeding frenzy......

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What if a Serious Shortage Happened overnight? - @auspec -- giovanni dioro, 07:55:40 04/14/02 Sun

Auspec, you bring up some good points in your rebuttal to that silver article, and you surely know more about the finer points of silver than me. However let me suggest a scenario that could fuel much higher silver prices
You said that if silver reached $30-50 per ounce, then mines that had been closed down would re-open and other new silver deposits would be exploited that would have otherwise been left idle, all of which would bring vastly much more silver onto the market.

While that is true, there is an important aspect that we must consider, which is What happens if a chronic shortage of silver appears more or less overnight? In such a case, there would be a considerate lag time before any additional silver from new production could reach the market. The logistics involved in raising capital, hiring workers, getting machinery, mining it, refining it, shipping it, plus the administrative red tape ensure that it would take many months, if not years, before this new silver would reach the market.

In the meanwhile manufacturers would have to outbid each other to get the silver they need for production. If the shortage is serious enough, Govts may step in and requisition a significant portion of silver production and earmark it for certain uses, leaving other silver consumers scrapping it out for whatever silver remains.

With a feeding frenzy like that, we might see silver rise dramatically to $50 an ounce. And this won't happen without the investing public taking notice. Many will see silver as hot investment and will jump in. There will be stories in the paper about how many billions of dollars Warren Buffett's Berkshire Hathaway has made on its silver horde, and fund managers will also jump in.

My opinion is that a rising silver price will attract many speculative investors who will want to buy silver for the simple fact that it's going up. These investors who never would have looked at silver before will buy so much silver that any new production will have no effect in lowering the price. In other words, even at higher prices, increased supply could very well be more than offset by increasing demand.

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Response to "Perpetually Escalating Silver Prices" -- auspec, 17:38:38 04/12/02 Fri

It wasn't too long ago that an article came out written by Charles Savoie entitled "Perpetually Escalating Silver Prices"

link at http://www.silver-investor.com/prsp.htm

In this article the following statement was made: "United States Geological Survey figures show, as of 2002, about 270,000 metric tons of recoverable silver reserves. This is roughly ten years worth of supply at current rares......"

Why is this line of thought important? Mostly because it is only a small part of the overall picture and it is most misleading if not properly labeled! Lets' look to his source at:

http://www.nma.org/commodity%20stats%20.html

This shows a category of "Recoverable Reserves" in the order of 280,000 tons, just what Mr. Savoie is pointing to. He has also made reference elsewhere to the category called "Reserve Base" which shows the other figure recently tossed around of 420,000 tons of silver.

These figures are accurate indeed, but some gentle parsing will show the incompleteness of the figures.

1st Category....... "Recoverable Reserves", 280,000 tons, this is simply what is KNOWN by drill proving methods as well as being currently economic to be mined. Pretty simple, BUT, if one projects this as the total remaining silver supply, and at the same time projects dramatically higher POS, this can be most misleading. Category 2 then comes into play....

2nd Category...... ""Reserve Base, 420,000 tons. This category includes category one. Some might call this category a 'geological reserve', but it includes all KNOWN silver deposits that have had a minimum standard of proving up via drills. Mining companies are always working to get sufficient drill holes to upgrade a 'resource' to a 'reserve'. It could mean silver deposits that have drill spacings of 25 meters or less, but it will mostly include silver that is known but not currently mineable, as well as category 1 silver which IS economic. It might be a good idea to delve into the methods of the U.S. Geological Survey as listed in this article. I have yet to do that.

OK, we have two categories that are commonly being used to project future supply/demand fundamentals and time periods for market rationing. Is this the entire picture??????
NO, emphatically, NO!

Let's project forward to what these numbers and this survey does NOT tell us, a category 3 if you will. That gives a much more accurate picture of what will happen with $30, $50, etc. POS.

3rd Category...... this one includes a lot of UNKNOWNS and that is exactly why it is NOT listed by the U.S. Geological Survey, they can only list what they know, right? But we must analyze what they do know and extrapolate from there.
Let's start with resources of silver that have yet to receive sufficient drill testing to be put into either previous category. Large systems, yet no capital for initial or expanded drilling. Does anyone seriously think all worldwide silver is a known entity?? Does anyone think that a higher POS might get a few trenches dug and drills turned. What will happen with $50 POS? Primary deposits will be explored for and discovered, as will secondary silver producing deposits. Existing deposits will be expanded, and previous, high grade narrow veins will find the marketplace. All the way down to the literal pick and shovel, possible donkey. See what I mean, the danger in not defining terms? This is not just semantics, but goes to the core {sorry} of future silver fundamentals. You cannot attempt to predict the future based on incomplete data.
Let's proceed with category 3 and all the countries listed in this survey, would have to go to their references. Is this an all inclusive list with accurate projections for China? How many producing countries provided no information? Oops, looks like some more silver should be in category 3.

We recently had an extensive 'Black Gold/Silver' discussion and one of the main 'tenets' to come forth was that: "Nobody knows the exact amount of above ground silver supplies"! That's a fact. We don't know what's there and we don't know what's not there. In all fairness, this 'unknown' should also be taken into consideration, no, even though it can't be quantified.

We also can't make silver projections w/o taking silver scrap/recycling into the picture. Silver recycling is currently a cottage industry, it will be a growth industry at $30 POS. Silver recycling is a larger market than primary silver mining if what I have been told is correct. This is a huge potential supply source.

So category 3 has an unknown silver supply/resource both above-ground as well as below-ground. Ignore it at your own peril. Don't make investment decisions based on incomplete pictures.

Does this make me any less of a silver bull than before. Nope. Does this make me pause when considering essays that talk of perpetual silver shortages? Yep.

Silver WILL blow-up on the manipulators, sooner or later, likely sooner. How long will it take mining and recycling sources to catch up with worldwide silver demand at that point? The typical time to bring a mine on line is between 5 and 15 years depending on their size. Is there PLENTY of remaining below-ground silver which will become future silver economic reserves. Absolutely. Will capital and mining expertise be efficiently allocated? No doubt.
I'll stick with my 10 to 15 years estimate of a runnaway silver bull, that'll do the trick nicely.

Thanks for parsing along with me.
a

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Gold -- Sharefin, 17:08:53 04/12/02 Fri

Harmony, Gold Fields close hedges

Harmony Gold [HGMCY] has closed the hedge book inherited from its acquisition of Randfontein Estates from JCI Gold in 2000 at a net cost of $11 million. "The closure of the Randfontein hedge book is a continuation of Harmony's strategy of being unhedged. We believe our shareholders want the exposure of a potential increase in the gold price," financial director, Frank Abbott, said today (12 April).
Harmony said that the remaining forward sales contracts and call options totalling about 490 000 ounces have been closed. Owing to the higher gold price, Harmony also closed a further 220 000 ounces of forward purchases. In total, about 2.7 million ounces were closed out in the Randfontein hedge book, but a further 120 000 ounces of forward calls (longs) still remained which Abbott said would be closed out opportunistically as the gold price trends upwards. In total, there were about 430 000 ounces of calls inherited in the Randfontein hedge book.

The closure of the hedge book resulted in a net cost after tax of $11 million (R125 million) which was financed from existing cash resources. "The closure cost of the hedge book will, however, not have an impact on the company's financial results, as these had been accounted for previously," the company said. Abbott said the company had been highly cash generative in the March quarter but he could not disclose details ahead of Harmony's March quarter results scheduled for April 29. Harmony closed the December quarter with net cash of R1.2 billion.

Harmony is not yet entirely hedge-free, however, owing to hedge books it owns from its recent acqusitions of New Hampton and Hill 50, two Australian gold producers. Abbott said there was about 1 million ounces of forwards and calls in the Hill 50 hedge book, and a further 500 000 ounces, again of forwards and calls, in the New Hampton hedge book. "The company will continue restructuring the hedge books of our Australian acquisitions, New Hampton and Hill 50, as and when market conditions allow," Abbott said.

This follows a spate of hedge closures by South African producers. AngloGold said in a Bloomberg report recently that it was continuing shutting down parts of its hedge book. Gold Fields told Miningweb in March that it had only half its book to close after closing out 230 000 ounces of forward contracts from Obosso, the company that owns Damang, a Ghanaian gold mine.

At the time, financial director, Nick Holland, said about half of the hedge book remained in the form of put options. Gold Fields chairman, Chris Thompson, confirmed the company now had no hedge component at all and that it was the only gold producer truly fully exposed to the gold price: "We are completely unhedged, completely pure and loveable," he said.

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Gold -- Sharefin, 17:05:33 04/12/02 Fri

Gold Trends 2

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Gold -- Sharefin, 16:45:46 04/12/02 Fri

Gold above key level in Europe on Mideast bomber

Speculation over a possible U.S. military strike against Iraq and ongoing military operations in Afghanistan have also made traders reluctant to go short on gold.

Gold's gains this year has been led by an inflow of funds out of equities markets rattled by the Enron scandal and concerns by Japanese consumers over the health of that country's banking system.

A decision by leading gold miners to heavily cut back the amount of unmined bullion they sell into so-called forward markets so that they can instead capitalise on rising gold prices has also fired prices higher.

An annoucement by world number three gold producer AngloGold (ANGJ) this week that it was "aggressively" running down its hedge book which guaranteed them lower prices that current levels led gold back over the important $300/oz level.

Disciplined selling by European central banks and expectations that mine supplies which start to contract this year have also bolstered gold prices.

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Gold -- Sharefin, 16:43:55 04/12/02 Fri

M-East attack supports gold

Further violence in the Middle East kept gold above the key US$300 an ounce mark in European trade on Friday and analysts saw scope for more gains by the metal, which has already risen 10% this year.

Analysts said gold could climb further.

"After some consolidation in the next few days down to $299, further gains should be seen towards the previous highs around $308," JP Morgan Chase Bank said in a briefing note.

"Once attained, we expect a move towards the $315/320 area before stalling," the bank said.

That would be the highest level for gold since October 1999, when a decision by some European central banks to limit spot sales until 2004 sent prices soaring.

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Gold -- Sharefin, 16:42:10 04/12/02 Fri

LBMA: Gold Clearing Stats Dn 13% In Mar

Gold and silver clearing statistics fell in March, the London Bullion Market Association said Friday, with silver
dropping more sharply than gold as prices for both metals were confined to tight ranges.

---------------
Study Forecasts 30% Gold Output Drop, But Others Disagree
New York, April 11 (OsterDowJones) - A new study by a Canadian mining investment research firm predicts a 30% drop in gold mining production over the next 10 years but may have failed to consider how higher gold prices will
fuel interest in exploration for new deposits, some market watchers are saying.

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Gold -- Sharefin, 16:30:09 04/12/02 Fri

Will Gold Ever Rally

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Silver -- Sharefin, 07:34:31 04/11/02 Thu

Perpetually Escalating Silver Prices!

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Gold -- Sharefin, 05:22:28 04/11/02 Thu

US dollar hegemony has got to go

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Gold -- Sharefin, 04:51:42 04/11/02 Thu

South Africa Benchmark Index Rises to Record Led by Gold Miners

South Africa's benchmark index climbed to a record, led by gold companies after bullion prices gained on AngloGold Ltd.'s announcement that it reduced the amount of gold it sells at fixed prices.

The benchmark Johannesburg All-Share Index rose as many as 115.64 points, or 1 percent, to 11,356.20, as 68 stocks gained, 10 fell and 374 were unchanged.

The following shares are making substantial gains or losses today in South Africa. Ticker symbols are in parentheses.

Gold miners rose after the metal's price gained 0.8 percent yesterday. It rose as much as 0.2 percent in early European trading today to $302.05 per ounce.
Anglo Gold Ltd the second-biggest gold producer, advanced as much as 21.20 rand, or 4.1 percent, to 535 rand.
Gold Fields Ltd the No. 4 producer, surged as much as 9.60 rand, or 8.7 percent, to 120 rand.
No. 6 producer Harmony Gold Mining Co. Ltd. (HAR SJ) rose as much as 9.80 rand, or 7.8 percent, to 135 rand.
Durban Roodepoort Deep Ltd. (DUR SJ), climbed as much as 3.60 rand, or 9.4 percent, to 42 rand.

Anglo American Plc (AGL SJ), the second-biggest mining company, advanced as much as 2.40 rand, or 1.3 percent, to 188 rand. Anglo may buy M.I.M. Holdings Ltd. using money raised from a $1.1 billion bond sale, the Australian Financial Review reported in its Street Talk column. This would help satisfy Anglo American's desire to boost its exposure to base metals and coal in Australia, the paper said.

BHP Billiton Ltd fell as much as 40 cents, or 0.6 percent, to 65.80 rand after ABN Amro Holding NV downgraded the world's biggest miner because demand for metals in the second half of the year will suffer from ``little follow through from either consumer spending or private investment.''

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Gold -- Sharefin, 04:48:43 04/11/02 Thu

Gold rallies on Middle East, miner view on prices

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Gold -- Sharefin, 04:40:40 04/11/02 Thu

Gold Stocks vs. Dow Declines

In last week’s issue, we showed you what happens when the Dow declines 10% or more compared to the XAU. Our conclusion was that each time the Dow declined 10% or more, the XAU, and therefore the gold stocks, went down a greater percent and for a longer time period.

"Yes, but, but …this time, it will be like it was before 1980 … like the last bull market in Gold. In those days, when the market went down, Gold went up." And so the numerous challenges went this past week.

We knew it was only a matter of time before someone pushed us to take a look back before 1987, and so this week, we made the trip - all the way back to 1975.

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Gold -- Sharefin, 23:06:01 04/10/02 Wed

Gold Prices Continue to Outshine Other Investments

Slowly and with little fanfare, gold prices have been inching higher for more than a year now.
Typically when an asset class or segment of the stock market begins to thaw as gold has, the sector will be prominently featured in investing magazines and highlighted on the financial programs on television.

But managers of gold-oriented mutual funds and other industry experts say they are disappointed by the lack of attention being given to the yellow metal.

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Gold -- Sharefin, 22:47:38 04/10/02 Wed

Punters Lift Gold Price, Not Japanese Investors


-- Futures Demand, Not Japanese Physical Buying, Lifts Gold Price
-- Japanese Physical Gold Buying Frenzy Cools
-- Gold Market Correcting Lower, But Trades A Higher Range

By Wong Chia Peck
SYDNEY, April 11 (Dow Jones) - Recent press coverage on Japanese buying of physical gold having pushed spot prices is exxagerated, as physical demand from Japan is but a small factor in determining gold prices, one of the country's largest gold traders said.
Instead, heavy buying of gold futures by speculators pushed gold prices to its two year high, Bob Takai, the deputy general manager of Sumitomo Corp.'s (J.SUT) commodity business department, told Dow Jones Newswires late Wednesday in an interview.
Gold futures on the Comex division of the New York Mercantile Exchange were bought heavily by U.S. fund managers, while the Japanese general public bought
gold futures on the Tokyo Commodity Exchange, Takai said.
"There has been a lot of publicity in the foreign press about Japanese gold buying. It seems to me that the publicity is a bit overdone," Takai said.
Japanese investors' buying of gold bars and coins is but a trickle in the volume of gold futures traded in the world, the key determinant in gold prices, he said.
"What drives the gold market the most, is the activity in the futures market...and the physical market is a very small percentage of the entire (global) bullion trade," he said.
Sumitomo Corp. is one of the largest gold traders in Japan. It's involved in the wholesale business of selling gold bars to industrial and jewelry makers and runs two retail shops. It also trades Tocom's gold futures.
Takai estimated Sumitomo trades around 50-60 metric tons of gold on the domestic physical market, roughly 20% share of the market.
Since January, press coverage has made much of a "gold rush" or "gold boom" in Japan, where official figures showed surging gold imports in January and February.
In February, Japan's Ministry of Finance showed the country's gold imports skyrocketed almost seven times to around 19.8 metric tons from a year ago. The figures for March aren't available yet.

Japanese Physical Gold Buying Frenzy Cools

While acknowledging that Japanese investors indeed went into a gold buying frenzy in February, Takai said the fever has definitely cooled down since.
"There's definitely a cooling down in physical buying. In February, I saw people queuing up at gold retail shops but this month, I see people selling back their gold holdings," he said.
The easier demand is reflected in the lower premium for gold bars over the spot price, which has fallen to around 40-50 U.S. cents a troy ounce, compared to the peak of slightly over US$1/oz in January and February, he said.
Gold rose to a two-year high of US$307.80/oz on Feb. 8 as a result of the U.S. fund buying on Comex and the Japanese general public's buying of Tocom's gold futures, he said.
"Those two are the biggest buyers of gold in the past three months," he noted.
With most of the Japanese investors' interest tied up in Tocom's gold futures, the gold price is vulnerable to dips as and when these investors sell, Takai suggested.
"They are buying on the futures exchange(s) because they don't intend to take physical delivery....their motivation is to make money, not to hold gold, they're punters," he said.
He also said that some Australian gold producers unwound their hedge positions over the past few months, typically in the over-the-counter, or OTC, trade which is less transparent.
That boosted the gold price in recent months too, he said.
Gold producers in Australia, the world's third-largest gold-producing country after South Africa and the U.S., tend to hedge more than their foreign counterparts by selling in the far forward markets.
A quarterly review by J.P. Morgan Securities Australia Ltd. reported that Australian producers' hedging fell by 7.7% at the end of the fourth quarter in 2001 from the third quarter.

Gold Market Correcting Lower, But Trades A Higher Range

Takai's gut feeling of Japanese investment demand in gold for the first quarter is 30 metric tons, a much less optimistic one than the World Gold Council's projection of 45-50 tons.
He explained that it was difficult to know the exact figures as the Japanese government doesn't issue any such data.
Japan's Ministry of Finance gold import figures aren't the complete figures, partly because the country also produces gold bars.
For instance, in 2001, Japan imported a total of 43.22 tons of gold, but it consumed 109.3 tons, according to the World Gold Council.
Turning to his outlook for gold prices, Takai said it is bearish in the short term, as the bullion enters a correction phase from an overbought situation.
"In the very short term, I am bearish on gold, but at the same time, the trading range has definitely been lifted by US$20 a troy ounce," he said.
Gold is now trading in a US$280-US$310/oz range, compared with US$260-US$290/oz two years ago, Takai said.
He cautioned that price-sensitive buyers, such as the Indians and Chinese, might buy less gold as prices rise, and any cutback in buying from them wouldn't be compensated by an increase in buying from the Japanese.
India, the world's largest gold-consuming country, accounted for over 26%, or 855 tons, of the world's total consumption in 2001 of 3,235.1 tons, according to the World Gold Council.
China was the world's fourth-largest gold-consuming country in 2001, accounting for 213.2 tons or about 6.6% of the total consumption.
"So if the gold price goes up, there's always a countervailing effect," Takai said.
"The Japanese people are the only people buying gold when the price is going up," he added.

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Gold -- Sharefin, 22:40:57 04/10/02 Wed

AngloGold cuts hedge in gold price rise wager

"They are positioning themselves for an up cycle" in the gold price, said David Hall, an analyst at Merrill Lynch. "They are probably getting rid of every weak hedge they dare."

"People are naive to think that in a rising price scenario we are not managing our hedge book," Best said. "You will see a substantial reduction."

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Gold -- Sharefin, 22:38:47 04/10/02 Wed

Gold price revives as AngloGold reduces hedging

Financial director Jonathan Best told journalists in South Africa that while the company has not changed its hedging policy per se, it had cut back its hedge position substantially during the March quarter. He said AngloGold is taking out weaker positions in its hedge book so that going forward it does not have a period where it is receiving lower prices or incurring an opportunity loss.

"We are aggressively running down our hedge book and the reason for that is that we are more bullish on the gold price and because US interest rates are low," Mr Best told Reuters.

gloGold is due to release details of its hedging position in the March quarter at the end of April.

Analysts in South Africa have commented that the March quarter may be the first in nine years that the average price received by AngloGold has not beaten the average spot price, which was $US290 an ounce.

AngloGold already closed out 1.7 million ounces in its hedge book over the December quarter of 2001, leaving it with a book of 14.6 million ounces, and executive director Kelvin Williams flagged in February a likely further reduction in the gold hedge book to about 10 million ounces over this year.

---

Gold -- Sharefin, 22:35:50 04/10/02 Wed

NY gold resuscitated by AngloGold hedge reductions

COMEX gold jumped on Wednesday, recovering from early profit taking after top-tier South African producer AngloGold Ltd said it was "aggressively" running down its hedge book.

AngloGold closed 1.7 million ounces in its hedge book in the last quarter of 2001, leaving it with a hedge book of 14.6 million ounces. Best said the company was reducing its book because it was more bullish on the gold price and because U.S. interest rates are low, raising the cost of carrying short gold positions.

Other dealers saw stop-loss buying all the way up. Gold was also supported by firming oil prices and underlying interest in the precious metals as portfolio protection in case a broader war breaks out in the Middle East.

---
They're getting nervous for the coming rise....
Covering here is essentually the same as loading up.
It's not because of today's price but rather the price that is coming.

$300 means squat to these guys but exposure to their positions at higher prices is what worries them.
And also that the prices that are coming will not be a spike where the price afterwards eases so they can ride it out but rather a shift in the POG to new levels with little retracement.

Let the producers cover but if they're covering with paper & not physical being delivered then who's taking on the counterparty risk?
When the CB's start to cover then that's when the prices will be surging.

And how will they cover...^o-o^...

---

Bonds & inflation -- Sharefin, 22:25:33 04/10/02 Wed

Brandies

It means that short-term rates are even more critical to the profitability of Corporate America - to the level of the stock market - to the growth rate of the American economy than ever before. It means that Alan Greenspan dare not raise interest rates too much or risk sinking the stock market and the economy once again; it means that because his ability to raise short rates is limited, that ultimately inflation may be higher than it otherwise would be in a still near deflationary world; it means that bond investors should do certain things and not do others. And that, dear readers, is a bagful of brandies - not in the creek, but lying half-hidden in the tall grass.

Explain please. Well, explanations should include proof but when it comes to the interest rate swap/derivatives market, the evidence is nearly impossible to come by. According to recent data by the Bank for International Settlements (BIS), worldwide swaps outstanding (mainly U.S.) total over $43 trillion. That’s a hunk-a-hunk of love folks: love for derivatives that in the corporations’ case may serve to reduce interest rate costs in the short run, but increase exposure/risk in the long run. Try finding these swaps detailed by amount and purpose in a 10K or annual report though. Even Sherlock Holmes couldn’t find something that wasn’t there.

So I sleuthed in a different way. The following two charts show nonfinancial corporate debt and nonfinancial corporate interest expense - both as a function of annual corporate cash flow.

And because Greenspan must keep short rates relatively low, the risk of inflation in future years will be greater than otherwise, the yield curve will remain more positively sloped than otherwise, and the dollar will ultimately be weaker than otherwise.

----
Go Gold - inflation incoming..........

---

Alan -- Sharefin, 22:21:49 04/10/02 Wed

I've posted it into the historical charts page in the silver section under the label 1970-1980.

---

hyperbole & BS.... -- Dave, 15:39:33 04/10/02 Wed

Berlin - Germany, the biggest economy in the 12-country euro zone, is facing a wave of corporate failures this year, with up to 40,000 companies expected to file for insolvency, the association of German people's and agricultural co-operative banks BVR predicted on Wednesday.
http://www.busrep.co.za/html/busrep/br_frame_decider.php?
click_id=345&art_id=ct20020408192447483N243753&set_id=60

---

Nicely Done! -- Alan, 12:20:42 04/10/02 Wed

Nick wrote:
>Here's the chart for silver between 1967 & 1980.
>I've cut the price off just as it's about to leap as that >throws the scale out of whack.

.......... Yo! Nicely done. Are you going to post
it somewhere? I would like the URL, if you could (or
else I will save to disk).

I note that as late as end 72 it was still possible to
get in at $2, and as late as 76-77 at $4.50.

Other than the early '74 spikes, a nearly smooth progression
up to the mania/singularity of late '79.

Hmmmm. Can anyone imagine an orderly progression, now,
through $6, $8, $12, and so forth? Or will the singularity
be triggered before then?

---

Cyclist -- Suresh Garg, 11:13:39 04/10/02 Wed

Thanks for today's post. Very useful for a somewhat longer term perspective (as compared to a few days to 2 weeks). Look forward to your posts, as always.

---

Gold & pollution -- Sharefin, 10:40:37 04/10/02 Wed

As an aside to the prior article, I personally know from experience the pollution that stems from mines adjacent to the sea. For many years, I fished in the Gulf Of Carpentaria Australia, which has currently 5 mines near it's shores.

Many years back on fishing near Weipa there were occurrences of mutated sharks & dolphins. When questioning CSIRO staff upon this I was told that this was only half of the story as fish, turtles & crabs were also showing mutations. Tests for chemicals had shown high concentrations yet because so many prawns were caught in the area & so much mining was done nearby it was considered economical. As a captain involved in the fishery CSIRO told me to shut up about such things as the bad press would effect the industry as well as my livelihood.

Across the other side of the Gulf was Gove where if you anchored the boat in the effluent outlet that dumps the mines toxic waste offshore, all barnacles & seagrowth would be burned off the hull in a matter of hours. Gove which once was a popular fishing ground is now basically dead water with little left alive close to the harbour.

There was a new mine (back then) started up off Borooloola (sp) where the ore was loaded onto barges and then sent out to sea where about 10-15 miles offshore it was then load onto ships bound for overseas. Although the project was certified safe and environmentally sound, after a year the neighbouring seafloor was buried under many inches of heavy metals. The process of transferring the metals from barge to ship wasn't perfect and once again the sea life suffered.

The latest project built by Pasminco - the Century Zinc mine - which pumps it's slurry across to Karumba where it is dried and then transferred to a barge to take offshore once again to transfer to ships offshore will be suffering the same fate.

As a fisherman who fished for many years upon these waters it always saddened me to see the degradation of the environment for the sake of a profit for some multi-national corporation.

When I read articles such as the prior one and think about the integrity of those testing and the monies paid for such services and the profits flowing to the corporations, I sincerely doubt their ability to tell the truth.

Alas the simple views of the islanders add up to little in front of the smarmy opinions of the media experts & the corporations lawyers & their public relations officers.

Alas, today we live in a world where ethics & integrity are shoved aside for the sake of faceless corporation profits.

Investors care more for their personal gains rather than for the degradation of lands sourced for their wealth.

So beware of where you invest your monies & the pollution that stems there from.
Today what is accepted as passable may tomorrow be considered improper.
And as such not before time.
Amen

---

Gold -- Sharefin, 10:12:25 04/10/02 Wed

$1.3bn mine sinks islanders' golden days of fish in a cyanide sea

April 9 2002
Sydney Morning Herald, Australia

The plume is caused by the mine tailings and rock waste dumped in the sea.

The locals are reaping a bitter harvest from a Rio Tinto venture, writes
Greg Roberts on Lihir Island.


In the main restaurant on Papua New Guinea's Lihir island, surrounded by one
of the world's richest marine environments, the mussels on the menu are from
Thailand and the fish is from the relatively distant PNG port of Rabaul.


Regina Asiad, the women's representative on Lihir's village planning
committee, says that a few years ago dugout canoes "overflowing" with fish
arrived daily at Lihir's wharf.


"Now you might get five or six fish in a boat or nothing. Strange things
happen that we never encountered before. We find dead fish, and sometimes
fish we catch tastes strange, so people won't eat it. A lot of pigs died
after eating stuff on the beach. We wonder about that mine."


The lucrative Rio Tinto-managed Lihir Gold mine, with a market
capitalisation of $A1.3 billion and extensive Australian involvement, began
production in 1997. It posted a $80 million profit last year and plans to
produce 22 million ounces of gold in 37 years of operation.


The mine is pumping 110 million cubic metres of waste, contaminated with
cyanide and other chemicals, into the sea each year through a pipeline 125
metres beneath the surface. Another 20 million tonnes of rock waste are
dumped each year into Luise Harbour.


Australia's Mineral Policy Institute says that the discharge of wastes into
the harbour breaches the spirit of conventions that ban the disposal of
similar wastes from ships in international waters.


But Lihir Gold says the mine is environmentally sound and provides 800 jobs
for locals, as well as much-needed improvements in islanders' living
standards.


A plume of sediment from the seaside mine extends two kilometres into the
Pacific Ocean. Huge piles of rock waste sit on reclaimed harbour that locals
say was a breeding site for endangered leatherback turtles. A moonscape of
orange and grey meets lush, tropical rainforest above the mine on the steep
slope of an extinct volcano.


Clement Nah is one of 300 people who were moved out of the beachside Putput
village to make way for the mine. The company gave his family a home in the
hills nearby.


Mr Nah says he puts up with noise from a generator running 24 hours a day,
dust falling over his home and the stench of chemicals. "We did not know any
of this was going to happen. I get chest infections and things I never had
before."


He complains that the company does not maintain the home. "It's falling to
pieces; we don't have money to fix it up. It was so much better in our
houses by the sea; that was our life. I wish I never came here." Another
resident who was forced out, Leonie Kelele, agrees. "Sometimes the smell
makes you feel like vomiting. It makes you feel really sick."


Gabriel Kondiak heads a committee of islanders that has been negotiating
issues of dispute with Lihir Gold.


"The mine workers get a small proportion of the wages they would get in
Australia and they don't have many of the conditions they should have," Mr
Kondiak says.


"The mine has failed to provide the promised business spin-offs. Its
benefits go offshore. Most people on Lihir now oppose it. We think it is the
next Bougainville." (Bougainville's Panguna mine was forced to close in 1989
by violent protests.)


The Australian Government's Export Finance and Insurance Corporation
provided the mine with political risk insurance in 1996 after its United
States Government equivalent, the Overseas Private Investment Corporation,
refused on environmental grounds.


Lihir Gold insists that allegations against the mine are baseless,
exaggerated or ill-conceived.


According to the company's chief executive, Alan Roberts, daily sampling in
the sea near the mine has failed to reveal any potentially harmful chemical
concentrations, while tests on the dead pigs referred to by Regina Asiad
suggest the animals had been chewing acid batteries. "The mine has had a
negligible effect on fish populations," Mr Roberts says.


A recent report to examine impacts on fish, commissioned by the company from
the CSIRO, is more qualified. It says there is no change in the probability
of catching fish at depths greater than 30 metres in different parts of the
island, but of the 10 most abundant species caught, four were more numerous
away from the mine and one was more common close to it.


The reports says the impact on the abundance of fish in shallower water had
been low, although this varied for individual species, and some fish showed
an increase in recent years in concentrations of aluminium, a possible
contaminant.


Mr Roberts says that while leatherback turtles may have nested at the mine
site in the past, the company is now protecting turtles nesting nearby from
islanders who take their eggs.


He says there had been maintenance problems with homes provided to displaced
villagers because untreated timber was used in their construction, but extra
funds were provided to deal with the problem. The company believes some
complaints may be motivated by a desire for monetary compensation.


"Our experience has been that most people are happy with their lot. There
can be unpleasant surprises for some when industrialisation arrives on their
doorstep, but there are other very pleasant things happening."


An international school has been established, and the infant mortality rate
is now half the PNG average. Two-thirds of the local population suffered
from malaria before the mine opened; the proportion is now 10 per cent. Mr
Roberts says the wages and conditions of mine workers are among the best in
PNG, and the proportion of locals in the workforce - 37 per cent - is
exceptionally high.

---

Alan -- Sharefin, 10:11:02 04/10/02 Wed

Here's the chart for silver between 1967 & 1980.
I've cut the price off just as it's about to leap as that throws the scale out of whack.



I also tweaked the others to fill in the gap from '75 to '78
Thanks for pointing it out.

---

Gold -- Sharefin, 09:38:33 04/10/02 Wed

Japanese '02 Gold Demand Stays Strong, But May Not Boost Price

Ikeda said it isn't the company's practice to disclose actual figures. But, while declining to provide a forecast of Japan's demand for the year, Ikeda suggested that Japanese players will continue to seek refuge in gold as long as the economy stutters and doubts linger on the banking system's health.
A representative at the World Gold Council's office in Tokyo said Japanese investment demand for gold in the first quarter of the year is close to the 45-to 50-metric-ton ballpark as earlier forecast.

Koichiro Kamei, a former research director with the WGC in Tokyo, who now runs his gold investment consultancy firm, also argued that the Japanese investors' love affair with gold is less fleeting than most would suggest.
Unlike the "Japanese general public," whose interest in gold is apparently more speculative and concentrated on the Tokyo Commodity Exchange's gold futures, Kamei said most Japanese investors are into gold for the long term.

---

Thanks, Nick -- Alan, 09:33:49 04/10/02 Wed


you wrote:
Alan -- Sharefin, 20:48:34 04/09/02 Tue
If you're looking for historical charts then have a browse here; Historical Charts
Also there's many more charts linked in here.
I do approx 300 charts on a weekly basis - most on the PMs.
More Charts
Point & Figure charts
If what you're looking for is not present then I can readily create the charts for you.
Just supply the specifics ie dates & formats etc

........... Thanks!

I DID find one chart that was useful:
Silver 1978-1982

It was embedded in THIS series:
Silver 1965-1969
Silver 1978-1982
Silver 1991-1995

Now, not to be picky, but why not include the 1970-1977
period, as well? That certainly was an interesting period,
second in interest only to the 1979-80 explosion.

Your charts pages also have this series:
Silver 1965-2001 [ a bit too "macro", but appreciated ]
Silver 1971-1975
Silver 1985-1989
Silver 1996-2001

....... providing a glimpse of that 71-75 period, but
again there is a gap; no data for 75-78 (actually the 71-75
chart only goes thru 1/2 of 1975).

Again, it just seems odd to me that the most boring periods
would be represented, without more careful coverage of
the explosive periods! ($1 to $50 in 10 years!)

Thanks again.

Alan

---

Gold -- Sharefin, 09:30:53 04/10/02 Wed

Gold retraces in line with oil, but trend remains positive

---

Gold -- Sharefin, 09:28:36 04/10/02 Wed

Gold Eases As Middle East Tensions Rise

Gold off lows as Israel says offensive to carry on

---

Gold -- Sharefin, 09:24:09 04/10/02 Wed

Japanese gold demand no flash in the pan

Imagine the weight of 15 Asian elephants stacked on top of each other.

That's a rough approximation of the amount of gold Japanese investors bought in the first quarter of calendar 2002, when fears of a looming financial crisis sent people scurrying for safe-haven assets.

It's also 11 elephants more than they bought in the same period a year earlier, assuming each beast weighs in at three tonnes.

"We've named this phenomenon not a gold boom but a money shift", said Hitoshi Kosai, general manager of the precious metals division at Tanaka Kikinzoku Kogyo K.K., Japan's largest bullion retailer.

---

Gold -- Sharefin, 08:45:18 04/10/02 Wed

Investing pendulum swinging back to gold stocks

Martin Murenbeeld, a Vancouver-based gold and currency analyst, is betting on 2004 as the turning point for the gold price, when pressure piles up on central banks to extend an agreement that limits their gold sales.

TRENDING HIGHER

He said containment of central bank gold sales, the potential for the U.S. dollar to decline, and low inflation have already caused gold producers to cut forward sales to increase their exposure to higher gold prices.

"We are in a nice phase trending higher," said Murenbeeld, who believes the current gold rally has staying power. "I don't see the factors that could drive gold lower as being a high probability and that goes into the stocks."

---

Gold -- Sharefin, 08:42:11 04/10/02 Wed

Anglo hedge set to falter

The March quarter could be the end of a nine-year run for AngloGold, which has used its hedge book to consistently beat the spot gold price.

The last time the group's hedge book failed to trump the spot price was back in 1993. Analysts estimate that in the intervening nine years, AngloGold's hedge book has netted about $1.2 billion in profit. But times have changed and the view of senior industry pundits is that the days of hedged gold companies realising gold prices considerably above spot were over; for at least as long as current gold price strength persists.

Jonathan Best, AngloGold's financial director, would not comment on how its realised price would perform relative to the spot price ahead of the publication of the group's results. "We would move quickly - within two or three quarters - to correct our postion," said Best. "People are naïve to think we are not managing our hedge position in a rising old price environment," said Best.

He said the group had cut back its hedge "substantially" over the March quarter.

AngloGold has, however, singled out the rand-denominated portion of its hedge book as a problem it is keen to resolve. According to AngloGold's 2001 annual report, it has 22,920 kg of gold - 13 percent of this year's forecast production of 179,000 kg - sold forward in South African rands this year at an average cost of R60,322/kg. While the sale price covers the group's projected cash costs of about R54,000/kg, the position makes for a staggering opportunity loss of R47,127/kg.

---

Hedge haunts Newcrest

---

Gold -- Sharefin, 08:35:20 04/10/02 Wed

Heavyweights upgrade gold; more to follow

US investment bank Goldman Sachs is the first in what is likely to become a stream of institutions taking a more bullish stance on gold.

"Japanese investment in gold could still be huge if there is systemic risk in Japan, but we'll first have to see how the government deals with that," said Leslie. "There are real reasons why people are bullish on gold…they need to go back to basics and that means going back to gold."

"The technical picture for gold looks like it is turning, but that is going to be a long process. There are huge vested interests in keeping the gold price lower; a lot of producers can't afford for the price to rise too much," says Viljoen.

Viljoen has a novel way of rating the gold price relative to equity markets; simply by dividing the Dow Jones Industrial Average by the gold price. "The gold price relative to other financial instruments is pretty cheap at current levels, the Dow can buy you 34 ounces of gold," said Viljoen.

Viljoen says in gold's heyday, in the 1970s, the Dow would buy close to a single ounce of gold, while at its worst level in 1999, the index would fetch around 50 ounces. He believes the trend will head back toward a long term average through a combination of a weaker Dow and a firmer gold price.

Dow/Gold Ratio Chart

---

Flierdude -- Sharefin, 08:20:19 04/10/02 Wed

Ain't it good to be able to pick up a bargain.(:-)))

---

Gold -- Sharefin, 07:36:51 04/10/02 Wed

Cycles

---

long term consolidation -- Cyclist, 06:06:14 04/10/02 Wed

is at hand,where June gold might make it to 312 tops.
HUI is due for a decline ,starting in earnest between end of June and second week of July.The low will be reached
in December in the upper 60's.
The place to be would be shorting the SPY for the duration.
Aside of holding physical,goldstocks are not the place to be when the general market will commence its slide in May.

---

re gold yesterday, today"... -- shell, 04:36:00 04/10/02 Wed

..i came to same conclusion as to who could order CB's to sell the public's gold to them at low prices

---

Gold yesterday, today and tomorrow -- flierdude, 20:53:00 04/09/02 Tue

.............It is my conviction that the shady characters who are behind the scenes in this world, and who really run things, a la Disraeli’s “Coningsby”, have a plan which they have been carrying out over the past decades. These are the individuals who give orders to Central Banks, of their own, and of other nations. They have the power to do so. We have been witnessing a new way of accumulating gold, never before seen in the world: accumulation through mass-deception, through manipulation of the mass-mind, which was never before possible.............

.............These 'identifiable' characters have used the dollar to accumulate wealth, and they have been going after the gold.............

.............The propaganda regarding the “death of gold” has been effective. It has allowed the Central Banks to sell off their stocks, painfully acquired through centuries, at cheap, very cheap prices, to the characters operating in the shadows.............In a sense these past decades have been one long bankruptcy sale on the part of the world’s Central Banks, where the banks have been selling off their best assets - to their owners! - at rock bottom prices. Of course, at fire-sale prices, otherwise, it would be next to impossible to accumulate it in any quantity.............

Gold yesterday, today and tomorrow

---

Alan -- Sharefin, 20:48:34 04/09/02 Tue

If you're looking for historical charts then have a browse here;
Historical Charts

Also there's many more charts linked in here.
I do approx 300 charts on a weekly basis - most on the PMs.
More Charts

Point & Figure charts

If what you're looking for is not present then I can readily create the charts for you.
Just supply the specifics ie dates & formats etc

---

Observation re PM Charts -- Alan, 19:48:33 04/09/02 Tue

An example of what I am talking about:

Below:
"since 1988"
"since 1983"

......... hell, studying PM charts since
those dates is like studying daily charts of
oak tree growth! (well, not quite, but you get
my meaning)

---------------

http://www.the-privateer.com/g-charts.html#precious

$US Gold Charts
$US Gold 1 x 3 Point and Figure chart - below $US 300 (* > 800x600)
$US Gold semi-log Bar chart - weekly - since 1998
$US Gold 2 x 3 Point and Figure chart - since 1993
$US Gold 5 x 3 Point and Figure chart - since 1981
$US Gold semi-log bar chart - monthly - since 1974.

Precious Metals Charts
Gold, Silver, and Platinum bar chart - daily
Gold in Euros, $US, $A and Yen bar chart - weekly
$US Gold/Silver comparison bar chart - monthly - since 1988
$A/$US comparison - 5 x 3 Point and Figure charts - since 1983
$A semi-log bar chart - monthly - since 1983

---

Silver Historicals -- Alan, 19:46:24 04/09/02 Tue

After some bit of poking around (most of the
logical places, plus a few googles) I've not
been able to find good historical charts of
silver spot prices during the big run-up period
of circa 1975-1981. That is, DETAILED charts
-- daily and weekly closes, and even intraday
detail -- for the whole period. Even kitco
cuts off (weirdly) *after* all the excitement
(as though anyone cares about studying a chart
from, say, 1986, but not 1980!).

This may be a no-brainer and something that
everyone has known about for 5 years.

Please advise.

Alan

---

Gold -- Sharefin, 19:43:35 04/09/02 Tue

A Golden Opportunity - Marc Faber

In late 1999, in the midst of the gigantic NASDAQ bubble, I recommended in a column for a magazine that Bill Gates ought to switch out of his holding in Microsoft shares into gold. Since then the stock of Microsoft is down by about 40%, whereas gold has rallied by more than 10%. Moreover, gold shares, which had performed miserably for the last 20 years, began to outperform both the S&P 500, as well as bond returns. In last month's column, I wrote about "secular changes in leadership" and made the case that the bull market for US financial assets, including equities and bonds, which had started in 1982, had come to an end in year 2000, and that from here on a new leadership would emerge in an asset class other than US stocks. I argued that investors ought to switch out of US equities into the emerging stock markets of Asia and also into gold and gold mining stocks. I have several reasons for my positive stance toward precious metals. Broadly speaking, we had since 1980, a bull market in U.S. stocks and bonds, and a bear market in commodities. Thus, whereas in 1980, one ounce of gold, which was then selling for more than US$ 800, could buy one Dow Jones Industrial Average which was then hovering around 800, today, it would require almost 35 ounces of gold to buy one Dow Jones. In other words, in the early 1980s, the Dow was "cheap" and gold as well as other commodities were expensive, whereas now, the Dow and the S&P 500 are high while gold and all other commodities are extremely depressed. In fact, in the history of our capitalistic age, the gold price has never ever been so low and depressed when compared to financial assets. Don't forget that at the peak of the US stock market in 1929, when stocks were relatively high, it took 18 ounces of gold to buy one Dow Jones Industrial Average, whereas after stocks had collapsed in the 1929 to 1932 bear market one required just 2 ounces of gold to buy one Dow Jones average. Thus, it is clear that at present the Dow is very expensive compared to gold since it takes 35 gold ounces to purchase one unit of the Dow Jones Average. Also, being a firm believer that secular or long-term trends are from time to time reversed and that contrarian investors can greatly profit from such reversals, I am intrigued by the recent out-performance of gold versus equities. Maybe gold is rising now because investors are beginning to appreciate the fact that the annual physical demand exceeds the yearly supply. The annual supply from mines amounts to around 2,500 tons with a value of about $ 25 billion, but the physical demand is 300 or 400 tons higher. Thus, if central bankers would not sell gold from their reserves the price would undoubtedly rise. Now, it is conceivable that because the gold price has recently strengthened central banks will increase their sales and, therefore, depress the price once again. But, also consider the following. In Britain, several newspaper articles have already appeared, which accused the Bank of England of wasting the county's wealth. These articles argued that the Bank of England has already lost several hundred million of Pound Sterling by selling gold last year at a price, which was far lower than it is now. In other words, if central bankers around the world wake up to the fact that a new bull market in gold is underway, they may no longer sell their gold reserves because they will be afraid to look even more stupid, than they are, for having sold their gold right at the gold market's lowest point in the last 20 years! In this respect it is interesting to note that central bankers did not sell any gold in the late 1970s and early 1980s, when gold was above $ 600 and when they could have invested the proceeds from their gold sales in US long-term government bonds at over 13% interest per annum or in short term deposits yielding more than 15%. But now, with gold prices a tad above $ 300, and long-term bond yields at 5.75% and short-term rates below 3%, they consider it to be wise to make this switch. Talking about poor market timing and you do not have to look any further than to our central bankers, whose investment acumen is about as good as the one of the unfortunate investors who bought Internet stocks in March 2000, when the NASDAQ exceeded 5000!
Supply demand imbalances aside, it is also possible that the gold market is rallying because market participants are gradually growing more suspicious about Alan Greenspan's monetary policies. After all, it is remarkable that, while the Fed Fund rate has been cut since January 3rd 2001 from 6.5% to 1.75%, long-term bonds have failed to rally and are in fact, today, lower than they were January 2001, when the rate cuts began. Thus, the bond buyers seem to believe, as I do, that present easy monetary policies will lead down the road to more inflation. Consider the following. Since the beginning of 2002, the Goldman Sachs Commodity Index is up by 14% whereas the US stock market is basically flat. Service inflation is already running at more than 5% per annum. True, import prices are still deflating, but if sometime in the future the dollar were to weaken, goods inflation could pick up almost instantly. Moreover, if for the one or the other reason the economy was to slip back into a double or multiple dip recession, I have no doubt that the FED, which through its irresponsible monetary policies created history's biggest financial bubble, will once more do everything it takes to stimulate the economy with monetary means in order to avoid another economic dip. This particularly since the FED will regard the interest rate cuts of 2001 has having been successful at stimulating the housing market and consumption, which kept the economy afloat. Thus, with monetary measures a deeper economic slump was avoided than if the system had not been flooded with liquidity and credit. These recent monetary interventions could, however, have some unpleasant and unintended consequences, the way all interventions into a free market do. Last year's interest rate cuts did, namely, neither help the still overvalued NASDAQ very much nor lead to a lasting improvement in consumption. What the interest cuts did was to bring about a temporary housing and mortgage refinancing boom, which allowed consumers to reduce their equity in their homes to a record low and continue to spend on consumer goods. However, with interest rates now rising, it is increasingly likely that the housing boom will hit a roadblock and that consumption will at some point stagnate or decline. Thus, the FED will sooner or later have to administer to the credit addicted sick US economic patient an even larger and more potent dose of monetary stimulus, which will, in my opinion, lead to a pick up in the price of commodities, a rise in the rate of inflation and a massive fall in the value of the US dollar, whose strength looks increasingly suspect given America's growing external imbalances and its dependence on foreign capital flows. But, could the U.S. dollar really decline meaningfully against other currencies? In my opinion, it is not very likely that the U.S. dollar will fall against the Japanese Yen and along with it against other Asian currencies, since most emerging economies around the world have embarked on competitive devaluations in order to boost their exports. Moreover, if the Asian currencies do not strengthen and actually continue to weaken against the U.S. dollar, how could the Euro move up much against the dollar? No, I do not necessarily believe that the U.S. dollar will decline much against other currencies, the way it did in the 1970s, when it lost close to 70% of its value against European hard currencies. But, the U.S. dollar could depreciate in value against a basket of commodities. In other words, inflation would over time gradually migrate from financial asset such as the still expensive US stock market and the dollar to commodities such as oil, food and precious metals. The skeptics will of course argue that I am inconsistent by simultaneously forecasting another dip into recession and a rise in the price of commodities. Correct! Under normal conditions, commodity prices would decline in a recession because of the lack of demand, but when monetary policies are designed to avoid a recession at any cost, recession can unfold while commodity prices soar, as was the case in Latin America in the 1980s and in Asia following the Asian crisis. Don't forget that in Indonesian Rupiah terms the price of gold and other commodities have trebled since 1997, although the economy went into recession.
Moreover, one of the reasons I am not very optimistic about the U.S. economy is precisely the expected acceleration in the rate of consumer price inflation, which will bring about higher interest rates and cut into real income growth at a time when the consumer is already suffering from the NASDAQ asset deflation and a record indebtedness. Thus, I would argue that in view of the FED's believe that all economic evils can be solved by monetary means, an additional round of economic weakness would be even more bullish for commodities including gold than an immediate economic recovery, which would boost commodity prices right away.
There is another observation I wish to make about gold. The value of the annual supply amounts to around $ 25 billion and the entire market capitalization of all gold mining stocks around the world is about $ 50 billion. Compare this to the entire stock market capitalization of the world, which is around $ 25,000 billion and the annual supply of bonds around the world, which exceeds currently $ 3,000 billion and it becomes evident how even a very small shift of money could boost gold and gold mining shares. If US financial institutions alone decided some time in future to allocate just 1% of their assets in gold, more than $ 250 billion would flow into bullion and gold shares and send its price to the moon! This, especially, since as mentioned above, the annual supply from mines is valued at only $ 25 billion and also because of the large gold short position, which is estimated at between 4 and 8 years of mining supplies!
There are several ways to play rising gold and commodity prices. For now, I recommend the purchase of gold mining companies such as Newmont Mining (NM), AngloGold (AU), ASA (ASA), Harmony (HGMCY), Agnico Eagle (AEM), Placer Dome (PDG), Freeport McMoran (FCX) and Glamis (GLG). However, should the price of gold rise in the next few years by as much as I believe it will then I am concerned that central bankers, who sold their gold near the bottom, will scramble to buy it back at higher and higher prices in order to carry on with their investment policy of selling low and buying high! Worse, the world's central banks, which by then will have lost most of their credibility will persuade governments to nationalize gold mines, and to declare the ownership of gold by individuals as illegal, the same way the US government did in the depression year 1933. So, at some point in future investors will have to own physical gold well hidden in some safe place!

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Cyclist -- Suresh Garg, 12:52:48 04/09/02 Tue

Thanks. Looks like the HUI decided not to start rallying yesterday afterall! Darn.

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Suresh Garg -- Cyclist, 12:49:40 04/09/02 Tue

SWC on the weekly chart

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Cyclist -- Suresh Garg, 12:45:21 04/09/02 Tue

Would you please tell me "triple bottom" in what? Gold or something else?

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And that triple bottom -- Cyclist, 10:39:58 04/09/02 Tue

sure looking formative on Sweetwater mine.

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Rangy -- Cyclist, 10:34:28 04/09/02 Tue

is on sale.Driving down that P/E multiple..:)

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Gold -- Sharefin, 09:03:33 04/09/02 Tue

Contrarian's Contrarian

You report that gold funds are showing gains just over 20%. Are people hedging or is gold finally seeing a meaningful resurgence?

We did well with gold last year. A few weeks ago, a lot of gold stocks had buying climaxes. As a sector, it's making a new 12-month high but closing down for the week, which makes us a bit nervous. So we cut gold buying down from 75% of what we would normally invest in this area to 50%, because we're looking for a little more correction. We're looking to raise our allocation later this year, because we think we're going to see gold doing better but not going through the roof. We currently have Fidelity Select Gold Fund, Newmont Convertible Preferred, Coeur d'Alene Convertibles, Barrick Gold and Placer Dome. If prices dip a bit, we'd add one or two more gold stocks.

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Gold -- Sharefin, 22:03:01 04/08/02 Mon

The Battle Ahead: Truth and Justice in the Gold Market

Whatever else he may have done, Judge Lindsay did not minimize the factual allegations of the complaint. He did not say that if proven, they were insufficient to establish price fixing. Instead, he republished them in considerable detail, including: Alan Greenspan's statement on gold lending by central banks to control the price; Eddie George's admission of cooperating with the Fed and other central banks to suppress gold prices in the wake of the Washington Agreement; Mike Bolser's statistics on preemptive selling of gold on the COMEX as well as other evidence of manipulative practices on that exchange by the defendant bullion banks; and evidence of gold price fixing contained in various government reports, both those relating to official activities and to the changes in the gold derivatives of the bullion banks.

The larger message contained in these allegations is that American officials have preached free market principles to the world while subverting them at home, that they have condemned crony capitalism abroad while practicing it here.

Judge Lindsay's decision of March 26 may have given the gold cabal temporary shelter from the law, but it was at best a pyrrhic victory for the Department of Justice. Its job is to defend the Constitution and laws of the United States, not errant officials trying to get around them. A few more such victories and the Department of Justice will have evolved into the Department of Selective Justice, and in the process reestablished the need for a new Special Prosecutor law.

The gold cabal may escape legal justice. But these perverters of law cannot forever escape the justice of the market place. In the fifteen months since the complaint was filed, aided by additional evidence uncovered by GATA, most acute observers of the gold market have come to accept that the price fixing allegations are true.

Richard Russell has been watching markets and writing about them almost since the day he returned from World War II service in bombers over Europe. His Dow Theory Letters is among the oldest and most successful investment letters. Last Friday, he reviewed the bullish factors affecting gold, concluding:

Against all the above, of course, is the position of the central banks. Precious metals, real intrinsic money, is outside the system -- and the central banks want to control the system and they want to own the system. Therefore, the central banks will do everything in their power to protect their monopoly over the world's money, and in my opinion that includes manipulation of the precious metals market, particularly the gold market.

As gold approaches the 300 dollar level, I believe the battle is on. The central banks (who have been selling gold) do not want gold above 300 dollars an ounce. And they will do everything in their power to keep gold below 300 dollars an ounce. As I said, the battle is on ... .

The central banks will lose this battle. Exactly when, none can say. Don Lindley's updated graphs of money supply growth, reproduced at the end of this commentary, suggest that judgment day for Alan Greenspan and his Federal Reserve is not far away. (For earlier versions of these graphs, see U.S. Money Growth: Words Unnecessary.) With the dirty secret of their manipulative activities exposed, the central banks are no longer an unseen enemy and their manipulations will be correspondingly less effective. Thus recent statements from the Bundesbank that it may sell gold to buy equities, and endorsement of this nutty idea by the European Central Bank, were quickly seen for what they were: transparent attempts to keep gold prices under $300/oz.

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Gold -- Sharefin, 21:24:10 04/08/02 Mon

Weak Stocks Help Gold Hold Over $301

Precious metals prices settled mixed Monday, gaining support across the board from the U.S. stock market being shaken by a negative pre-earnings announcement by IBM and by Iraq's suspension of oil exports for 30 days.

"The market was looking for something to move it. Interestingly, generally sentiment had been negative prior to this. Most people thought gold would probably drift off and test support," said precious metals strategist Kevin Crisp at Dresdner Kleinwort Wasserstein in London. "The Iraqi statement has turned that a little bit on its head."

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Gold & the Longwave -- Sharefin, 20:30:08 04/08/02 Mon

The Kondratiev cycle revisited: Implications for gold

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Gold -- Sharefin, 20:00:26 04/08/02 Mon

Central banks aim to extend gold sale deal

"Central banks have E signalled they expect the agreement to be extended," said Benedikt Koehler, the council's spokesperson for Europe. "There would be great uncertainty if it were not, because markets would think central banks planned to massively reduce their gold reserves."

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Shifty -- Sharefin, 19:58:56 04/08/02 Mon

Thanks - it's good to be back in the chair.

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Gold -- Sharefin, 00:11:56 04/08/02 Mon

Important Information Regarding Updates To Indices

Several months ago, the ASX announced it was changing the classification of all equities in line with the Global Industry Classification System (GICS). This change is scheduled to come into effect in June 2002. One of the results of this reclassification is the number of indices being published - the previous 60 indices have now been reclassified into 20 indices.

Find out more here

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Due to the above changes the 'XGO' - Australia's Gold Index will be scrapped & forgotten.

It matters not that Australia is the 3rd largest producer in this modern fiat world.

Australia having sold off most of it's gold production to overseas company's, is now throwing away the recognition that such an industry eve