Gold Discussion for Investors and Market Analysts

Kitco Inc. does not exercise any editorial control over the content of this discussion group and therefore does not necessarily endorse any statements that are made or assert the truthfulness or reliability of the information provided.

David Blair Macrory
(Thu Jun 26 1997 00:00)
Quotes, for these days ( -as best recalled ) :
Oscar Ichazo: "When the ego, or a society, have reaped the full hell
of the false security and status, they have so vainly pursued; they
are at the point of collapse, and rebirth."
Ayn Rand: "When an individual, or a nation, ( can no longer get away with writing/kiting, bouncing checks ) is facing/drowning-in bankruptcy; they may rage about, clamoring for someone, something, to save them. Or they can become calm, quiet, and look within, to their hidden resources ( -Ft. Knox, are you still there? ) , and start rebuilding.
Founding Fathers: "Government is fire; if not controlled, it will destroy you." ( happy "independence" day )
Central bank guru of merry ole England: "Let me control a nation's money; I care not one wit, who makes the laws."

(Thu Jun 26 1997 00:08)
FWIW,This time another breakout of platinum on the way to 560,with it silver will hit 5.20 in short order.Dollar index is on the verge of a collapse,this will be accentuated by a rise of short term interest rates.
Cycles looking for a high end of July for precious metals,and a low
for the stock indexes.

(Thu Jun 26 1997 00:12)
with all the up-coming pre-planned events

re: new world order, middle east conflict, s. east asia conflict,
collapse world-wide of financial markets, food shortages, etc...

one will lay claim, to all this fame----2000ad.

the new millenium is the answer to any liberals dream. imagine
being able to blame the year 2000 for asking paula jones
for another "private" party. the politicians have staked
their claim to fame with the new world order, and with
a millenial change, they now have the vehicle. it just
happens to be a HUMMER!!

cherokee!; ) en-route to the seven sisters for some star-gazing.

(Thu Jun 26 1997 00:43)
Another Gauntlet
I found your 18:01 very well reasoned and well written. Threat of gold sales from ECBs has and will continue to weigh heavily on gold. I have serious doubts, though, as to whether there will ever be a common European Currency. The EC is viewed by many as a panacea that will solve all ills and create an enormous trading block among member nations, the very same nations that have been unable to get along in any century of the last ten. Why a country would give up any measure of self control over their own currency is beyond me. Maggie Thatcher said she would never agree to ceding British sovereignty by integrating British currency in the EC. That spelled the end of Maggies courageous career, but I salute her.

I do question some of your conclusions and, dare I say, the conclusions drawn by George Soros. The dollar is not unsound at any price. If the US could freeze spending, ( a very big if ) with vast new markets becoming available, we could grow out of our debt in 15 - 20 years. Most home mortgages run for thirty years, do we call every homeowner bankrupt? As I have said many times, the rest of the world cannot prosper without the US.

As for the trade deficit, this is a nonexistent puff of smoke invented by bean counters so they have something more to count. There is no such thing as a trade deficit. For every dollar we spend abroad, we receive a dollars worth of goods, a mutually beneficial transaction, freely entered into by both parties. If anything, the so called trade deficit is a testimony to the importance of American markets to all who sell here. The more of our dollars they take, the more vested they are in our continued health and survival. Without us, the would crumble. I ask anyone in this group to please explain what a trade deficit is, and how it harms either party. If you allow me to respond, I believe I can refute any and all arguments supporting this mystical creature.

I enjoyed your post tremendously, Neil. Would you next share your views on PGMs and the social upheaval destined to strike South Africa? Keep up your posts. You are a voice of reason and logic.

(Thu Jun 26 1997 00:52)
Received from my sister: actual quotes from Federal employee performance evaluations.

"Since my last report, he has reached rock bottom and has started to dig."

"His men would follow him anywhere, but only out of morbid curiosity."

"I would not allow this employee to breed."

"This employee is really not so much of a has-been, but more of a definitely won't be."

"Works well when under constant supervision and cornered like a rat in a trap."

"When she opens her mouth, it seems that this is only to change whichever foot was previously in there."

"He would be out of his depth in a parking lot puddle."

"This young lady has delusions of adequacy."

"She sets low personal standards and then consistently fails to achieve them."

"This employee should go far - and the sooner he starts, the better."

"This employee is depriving a village somewhere of an idiot."

(Thu Jun 26 1997 00:56)
Two questions from a novice:
( a ) what is the explanation for the drop in gold spot price, between 2 and 2:30 PM ( New York Time/Trade ) , two days in a row? Manipulation by shorts? by CBs?
( b ) I understand yesterday's drop in Fidelity FDPMX in view of their heavy S.A. holdings. Is the drop in FSAGX ( despite the significant rise in the XAU ) due to an attempt by the FSAGX Fund manager to avoid the large gold mines which belong to the SP500? If so, would this prevent a large drop in FSAGX when the general stock maret crashes and when Index funds have to sell off massively, including the major gold mines?
Thank you for your help.

(Thu Jun 26 1997 01:07)
EB @ 19:13 regarding yours:

This leads me to another Hypothesis...if I may. Think of this:
BT = RJ I haven't figured out which person relates to the other. RJ lives vicariously through BT -
or vice-versa. And he's having a blast too! NO?

Who is this BT fellow and why has he created such a stir? I looked back over the last couple weeks and found nothing groundbreaking. I must have missed something. Most of his remarks are filled with self importance and hints of knowledge that others do not have. Oh, I guess I do see some similarities.

Someone, please tell me what this guttersnipe is all about. Im counting down too, 48 hours to go..... 48 hours to go for what???

(Thu Jun 26 1997 01:22)
Fidelity Select American Gold & Precious metals Chart.
Ten market days ( seven hours / prices per day )

(Thu Jun 26 1997 01:31)
Francois.... The below URL provides percentage change,
info abd CHARTS for FSAGX top ten. I think it will
answer most of your questions. Good Luck!

(Thu Jun 26 1997 01:32)

(Thu Jun 26 1997 01:34)
Self Important Semi-Demi-God
Steve ( Perth - Western Australia ) @ 20:32.

I disagree with most of your assertions, but I love the confidence with which you assert.


The Russians have no more Platinum. It has all been sold or stolen. Received at the COMEX last year: Platinum bars with pictures of the Czar stamped in them. 80 year old platinum, the proverbial bottom of the barrel. Any platinum left underground will, for the most part, continue its antediluvian slumber. The mining infrastructure in Russia is broken and, as long as ex-communists are being elected by popular vote, will not be resurrected by infusions of
western $.

Speaking of PGMs, Tiger will strike a deal with the Russians and buy it all. Every last ounce. They have accumulated more than 2.25 million ounces of which nary an ounce was sold at 250, 240, 230, 220, 210, or 200. A 100 million dollar mistake??? I think not. Ask yourselves why representatives from Tiger were talking to the Japanese? Were they looking to bail out of too expensive palladium, or were they negotiating long term palladium contracts? I first hinted at this a couple weeks ago, but no one picked up the ball and ran with it. Something to think about, or more Unperiphrastic Bombastiloquence?

I too
As well as you
will never pursue
But continue to do
as you do too
Always eschew
And take a vacation
From all obfuscation.

(Thu Jun 26 1997 01:38)
in sack-o-tomatoes
The handover of Hong Kong is only days away now and I'm still having lots of trouble believing that we'll see a smooth transition. I am certain that we will see demonstrations in Hong Kong after June 30. At least one democracy group has already announced its intentions in this regard -- if for no other reason than testing Beijing's patience. I am much less certain about Beijing's reaction to such a test. However, IMO there is little reason to believe that a ruthless totalitarian regime, used to demanding -- and receiving -- total obedience from its subjects these last 50 years will react patiently or benignly to a challenge from home-grown human rights groups. It can barely do so when dealing with western governments. Anyway, here's a interesting page that has the survey results and analysis of the Hong Kong Transition Project's numerous polls taken over the last few years: It's a little slow loading, and is rather long, but it's well worth reading if you're trying to puzzle out the golden implications of this momentous event.

(Thu Jun 26 1997 01:38)
Enough already!
Hashimoto Schmashimoto - it had to be said.

(Thu Jun 26 1997 01:46)
Oh yeah.....
Platinum supplies will fall short of demand by 360K + ounces. This according to CPM numbers which are conservative at best. Not included in the 360K is 81K oz borrowed by the US mint from US strategic stockpiles, which are required by law to be replaced. They must replace the metal, no IOUs here, the Department of Defense is not Social Security. Now to quote a Kitco Sage:


(Thu Jun 26 1997 01:53)
Gimmie a break! Its my first Limerick!
A Kitco sage of high station
Would say, in place of salutation:
With a wink of one eye, then two
Advise all to eschew
The slightest hint of all obfuscation.

(Thu Jun 26 1997 01:54)
I see gold breaking 340 again tomorrow

(Thu Jun 26 1997 02:10)

Date: Wed Jun 25 1997 00:16
Gold up in July ( @veteran wealth builder ) :
RJ @ The ramblings of a lunatic.

Sir......Inspired ramblings of a lunatic, if you please.

(Thu Jun 26 1997 02:16)
Alas, Scott
Either Gold will break $340 tomorrow, or it will break all to pieces.

(Thu Jun 26 1997 02:17)
Gold had a good rally in both America and Asia Yesturday. Gold sold off in last few hours in America before close giving the illusion of a down trend for the guestimates. But today gold up again in Asia and I expect the same in America tonight ( tomorrow ) .

(Thu Jun 26 1997 02:26)
If you believe kitco quotes, the difference between buyers and sellers on the gold spot is only 20c. We are going to get a rally or drop in next 1/2 hour. Lets see?

(Thu Jun 26 1997 02:40)
credit bubble -gum
Hi all. My better half is branch manager for one of the Big5 banks up here in Canada. We usually talk shop in the evening and this was our discussion last night. Bla bla bla client wants 50,000 for mutual fund purchase-Yada yada yada- she needs security befor she can ok the loan
bla bla bla send application off to Investments department-yada yada yada- they ok loan with 50.000 mutual funds he presently has as security
bla bla bla yada yada yada HOLD ON ----Says ME- honey, back up a few Yadas- 50,000 loan for mutual funds backed by 50,000 in other mutual funds?????? You " herd " me right gentlemen. In the imortal words of Mister Ripley................

(Thu Jun 26 1997 02:54)
Re yours: EB @ 03:09
RJ....can you tell me who will win the third race at Los Alamitos Sunday?

To which:
No, I cant pick the winner, but I can pick the nine that wont.

(Thu Jun 26 1997 03:23)

Gunrunner @ 09:20-Apocalypse Now-great movie. The
colonel's name was Bill Kilgore. To paraphrase,"If
I say it's safe to buy gold son, it's safe to buy

(Thu Jun 26 1997 03:26)
Picked this up from the bottom link of
"Point of Maximum Optimism by Michael Belkin"
On Gold Eagle

There is three parts to their sample letter and all are a good read:

Quoted from the Strategic Investment Letter in sample 2:
Our prediction: Gold will rise slowly, then more quickly, reaching $1,000 per ounce before the end of this century.
And also in sample 3:
A massive Japanese sell-off of Treasury bonds will blindside Americans with a double whammy of plummeting stock market prices and soaring interest rates. We're going to be hit in our pocketbooks, our portfolios, our real estateeverywhere.

Strad Master
(Thu Jun 26 1997 03:43)
GEORGE S. COLE: Regarding your Jun 25 16:50 post ( narcotics going public ) : With all DUE respect, I can't believe you actually believe what you wrote. I suspect that something was inadvertently left out of your post that you intended to include - perhaps a wink or some other indication of tongue-firmly-in-cheek. Before I engage you in a moral debate or attempt to address what you posted I feel you certainly deserve the benefit of the doubt. Perhaps you'd care to clarify. Many thanks.

(Thu Jun 26 1997 03:44)
RJ-1:07 I do not know BT. Remember I am an FNG much like yourself. I made comments in play and to provoke a response. And a BONANZA I got. ( In case anyone did not read RJ's 1:34 it is worth reading four or five more times ) . He could not be more BLUNT. TAKE HEED. Russkie will not deliver. TO GOLD... I still like that MOTHER OF ALL WEDGES shaping up. Perhaps it won't play out for a little while though...but when it does...SPROOOOOOOOOOOOIIIIIIIIIIINNNNNNNNNNGGGGGGGG!!!

And thanks for the eloquent poetry. You do have a way with that language thing.

48 hours?? Oh! I gotta get my haircut in 48 hours. thanks for the reminder.

And I can't pick a horse to save my horses ASS.



(Thu Jun 26 1997 03:49)
That drink will never fly
I always keep a couple of "OIL CANS" of Fosters Bitter in the fridge, though, albeit the watered down US version.



it has a ring to it...

(Thu Jun 26 1997 03:57)
Back on Kitco - things haven't changed much. I find reading Kitco 1 week
at a time alot different then reading it hourly. It seems like everyone
has become pretty taken with the new handle in town - RJ.

RJ: could you point me to the day you posted your insights on the Tiger
fund's corner on Palladium and their exit strategy with the Japanese.

Also, I've searched the month of june looking for your insight into the
Russian's PL stockpiles being at zero! I've found your claim for 500-600
million dollars and another claim for a 2 year stockpile, but I couldn't
find the 0 post.

I guess I'm just an info junkie about PL/PA these days - I wouldn't want
to miss anything.

The vacation was nice, the golf was top shelf. If anyone saw the movie
'Tin Cup' - it was filmed at Tubac, a really wonderful course.

(Thu Jun 26 1997 04:05)
Cherokee and speaking of oil cans
Are you seeing again? Buy SEP Crude 7/7 hold it ten days or so and your trade ( from '83 ) will be correct 91.7% or so. Hmmmm.

By the way, did you see that minuteman the other night from the Seven Sisters? Launched at VAFB it was said to have been seen more than 800 miles with reports that people saw it as far away as Utah. It was one of the best launches I have seen... and these eyes have seen.



trading futures is risky, yada, yada, yada, play with matches and get burned blah, blah, blah. I am serious. I think.

(Thu Jun 26 1997 04:32)
@high C,s
Dare to enter my kingdom from which you will never escape. Without even
a whisper you try to leave from where you came. Beware he who throw scorn
at underdog. The moon will soon be reborn. Take what you can now and leave the rest for the feast of the dragon. Your lair is now muddy and
damp. Take solace that you are welcome to remain. Dare not question
why for you will indeed be rewarded.

Pray that you have taken the right path.

Steve (Perth - Western Australia)
(Thu Jun 26 1997 05:18)
MADOG: In Australia we lend out a minimum of A$20,001 for mutual funds, against A$14,000 deposited in various mutual funds. ie. MORE than the deposit security. We have done for years. Bankers Trust does the finance, amongst others. For DIRECT individual shares, the debt to equity ration is more conservative. Investors are aware they can lose their shirts, but at least this way, they don't lose their house!!

EB: In case you do not know, an Emu is a large native bird very similar to an Ostrich. Not E.M.U.!!

(Thu Jun 26 1997 05:30)
Nothings Certain, but there could be a change of heart

George W. Loh; your ( 21:12 ) makes some real good points. I believe that if Japan made poorly timed sales of US Treasuries; that the loses they had on Rockefeller Center, Pebble Beach ect., would seem miniscule; especially when compared to those that would be suffered by both countries, as a result of such muted sales.
What we must consider; is that just 1 billion dollars at todays gold price can buy about 2.9 million ounces of gold. For Japan 20 billion dollars in reserves is a drop in the bucket, even without selling US Treasuries. Actually $20 billion can buy 3/4 of new annual production. While this is not a prediction, it's the non evil way to go.

George s. Cole
(Thu Jun 26 1997 05:33)
stocks and commodities
STRADMASTER: I am not predicting the narcotics cartels will go public. But this society is so corrupt that I wouldn't rule anything out. Peddling cocaine and heroin no worse than getting millions hooked on tobacco. 30 years ago who would have thought that gambling ( or gaming as it is now called ) would be legalized and sweeping the nation. Aside from the fact that is illegal, peddling narcotics fits all of Warren Buffett's criteria for a great long-term investment.

ALL: The recent news that Saudi Arabia and Iran will work together to hike oil prices again demonstates that stock investors are much more strategically oriented than commodity players. Oil stocks have been surging for many months even as oil prices dropped back under $20. Now we know why.

Gold is no different. In a genuine move, the stocks lead and the commodity follows with varying time lags. If the commodity consistently moves ahead of the stocks, time to run for cover.

(Thu Jun 26 1997 05:55)
Lan Man, Jack, Steve Puetz: US currency circulating outside the US. FRB figures I have are December, 1994. I don't think they have better figures yet. $100 dollar bills = $166.1 Billion, $50 bills = 22.4B, $20 = 45.1B. That is a total of $233.6 Billion. Plus the counterfeit bills. Mostly in Eastern Europe. As problems in local currencies have worsened the total is certainly higher now.

(Thu Jun 26 1997 06:11)
$139 gold WOW

Steve in ( Perth- Western Austrialia ) : It's really the other side of the moon, when compared with some of the high quotes that I seen thrown around.
It seems that the service making the prediction of 33% interest rates hadn't considered the inflation preminum along with the $139 gold price, or did they feel that the 33% rate would knock the price down from their short lived $600 price prediction?
My belief is a rock bottom $600 price, followed by a slow rise to about ____, depending on how well they -the world CB's- make the transition to gold backed currencies. I cannot believe that platinum will be used to back currencies as there simply isn't enough available.
It was Andy Smith, the Merill Lynch guys twin brother; who spoke about silvers removal as a currency base, and that ain't saying much for either of them.
Now a silver backed currency at about $50 per ounce would be OK, even though it's ( it was ) used widely in manufacturing.

Mike Sheller
(Thu Jun 26 1997 06:33)
WW Dot Com
WW: re your Wed 20:51 ) Your Chinese contact is deluded. He is, after all, a member of the Chinese Communist party in "good standing." However, you have kindly brought us a clear picture of the muddled mixed premise thinking of most modern state functionaries. I'll stick with the kids for my assessment as to where China is heading. It may take a painfully long while, but the handwriting is on the great wall for socialists in China as well as Europe. Doubtless, like undulating price patterns and rivers, there will be retracements along the way, but the trend is to eclectic societies with diminished state control. Information technology will lead the way, as it has always done. This forum is one tiny, but important example. I agree that Russia may very well go back to official collectivism. They are a ruined people and there is no telling what they will do in their social desperation. They were always a stiff-necked bunch. As it says in the bible, "The dog returns to his vomit." If the US sinks, China has no market and the regeneration is cut short. Chinese are a lot more practical than the Russians. RJ's 00:43 demonstrates the fallacy of a trade deficit in a free market context. As long as there is mutual benefit, everyone benefits. The success of a trade, and its value, can only be judged by the traders themselves.

(Thu Jun 26 1997 07:03)!
Albania, after the collapse....

(Thu Jun 26 1997 07:07)
Gold options expiration;

(Thu Jun 26 1997 07:09)
@New England
Mike Sheller and RJ make good points about deficits IE everyone is benefiting ie we receive the goods "they" receive the money and buy our debt. The problem with this now ( unlike the past ) is twofold 1 ) They are having to buy our debt at an unsustainable rate ie they own 34% of o/s mktable Treasuries versus only 5% a few years ago.2 ) The US consumer is in the worst debt situation ( worse than '29 ) in history because of his/her purchases. Because of this situation the purchasing will slow down and so will the amount of money flowing overseas. When the customer starts to buy less the seller has less money to buy our debt thus rates rise in US further worsening the economic situation. The economic situation also worsens overseas ( less exports to US ) and as the dollar weakens "they" need to repatriate money for work at home/ also may need a new reserve currency std because of precarious fate of over owned dollar/ANS GOLD!

Mike and RJ are right if the overextended consumer and proliferation of dollar supply mean nothing and there is never another recession in the US.

There it is/nuf said.

(Thu Jun 26 1997 07:25)
WW...The initial problem is that the overextended consumer needs dollars to pay his dollar denominated debt. He has to sell his Krugerand to get the dollars. That is where we are now.

(Thu Jun 26 1997 07:26)
Trade Deficit, No Problem ???

RJ, re your 00:43 post in which you asserted that a trade deficit was not a problem or doesn't really exist.

What you appear to be saying is that the difference between the supply into the US and the supply out of the US is made up of dollars, therefore no deficit exists. However, the problem exists because the dollars must come from somewhere.

A dollar used by a US entity to purchase a US made product remains in the US and is therefore available for investment inside the US ( investment in plant, purchase of other products, payment of wages ) . Dollars used to fill in the gap between imports and exports are not. Therefore, a trade deficit financed with existing money will eventually lead to higher interest rates in the deficit country ( to increase the price of its currency relative to goods ) and economic contraction. Depending on the size of the deficit it would also likely result in a reduction in the value of the deficit country's currency. In this situation the imbalance would hence self correct and the deficit would be short lived.

However, the above does not represent the current scenario. What we now have, and have had for some time, is a trade deficit which is being financed by new money, that is, money created from debt monetisation. Also, a large portion of the money used to finance the deficit has been taken out of circulation ( made in to foreign currency reserves in the surplus countries ) or used to purchase US Govt debt. This has led to the following :
1. China and Japan now have massive economic and political leverage over the US. Japan may be reluctant to use this leverage due to their need for US military support. China will not be ( in fact, China may have already used this leverage re MFN )
2. A substantial depreciation of the US dollar over the last decade against the currencies of the surplus nations ( although not as great as would have occurred if the US dollar were not the reserve currency of choice )
3. A US money supply which has, in recent years, increased at a far greater rate than US GDP.

The actions which have been taken to create the perception that a large trade deficit doesn't really exist and/or is not a problem will contribute to the on-going reduction in America's economic importance and eventually ( within 5 years ) to a financial crisis. Being an Australian living in Hong Kong I'm not at all concerned about the US trade deficit. In fact, I'll probably benefit from it because the US dollars which continue to flood the world as a result of the trade deficit will add substantial value to my gold investments. However, US citizens should be gravely concerned. The laws of supply and demand have been conned in the short term only.

Regards, Milhouse

(Thu Jun 26 1997 08:07)
How come the cost to buy gold coins is $20 per coin? This high commission
seems to me to reduce demand. For Joe public stocks have a much lower commissions? I was going to by some coins but the commission held me back. What is the best way for someone to buy gold?

(Thu Jun 26 1997 08:24)
Good rule
Swiss banks have been given a black eye by our "free press" recently. However an institution older than this country must know something. The first rule of the swiss banker: Never lend money to a borrower who needs the loan to pay interest on a former loan.

(Thu Jun 26 1997 08:25)
Where can you buy American Eagles and Krugerrands? and where is there the less mark up?
Thank you

(Thu Jun 26 1997 08:38)
@DFW Airport
In Texas, gold bullion coins, eagles, mapleleafs etc, generally have a
commission of 5% over spot. I just bought a few monday and this was the case.BTW there is no state or local taxes on coin purchases of over
$1000 in Texas. I dont know about other states.

(Thu Jun 26 1997 08:39)
JMA -- Don't forget the spread ( bid/ask ) as well as the comm. An 1/8 on a 100 share lot equals $12.50 + comm. both ways.

Bob M
(Thu Jun 26 1997 08:39)
JMA- the guy selling the coins has to make a little bit. The US government when they sell gold & silver coins charges a premium. The going rate retail is about 5-6% premium

Mike Sheller
(Thu Jun 26 1997 08:41)
responding to Impure thoughts
WW: The "buying of our debt" part of the trade deficit equation is an aberration of profligate, uncontrolled government ( in this case the US ) . I can't speak for RJ, but that is not what I had in mind as part of the natural market dynamics of international trade accounts. You have just proven that it is invariably state interference and incompetence ( which would be criminal if applied to individuals and private entities ) which brings about distortions of natural law and free market processes. In the end, the disparities in human intelligence, discipline, and motivation will insure that no matter what "perfect" or "imperfect" system is in place, there will be fluctuations in the fortunes of everyone from time to time. It is the sanctimony of a muddled state telling me what "reality" truly is that I object to. The results are inevitably worse.

Bob M
(Thu Jun 26 1997 08:43)
I heard on CNBC that there was a mystery seller yesterday of 10 year US govt. notes..mmmmmm...have the foreignors begun to unload??

(Thu Jun 26 1997 08:49)
EB: When we lived in Solvang and the ground started rumbling at 6:30 in the morning it always gave us concern that another earthquake was emminent till we realised it was just another minute-man missile being shot off at Vandenberg. Your right, the evening shots were always the most spectacular especially as the second stage rocket separated.

Not knowing when this market will ever move, I just keep buying option insurance about 6 months out. It will take off one of these days, right?: )

Bob A
(Thu Jun 26 1997 08:58)
Time to buy Stillwater, SWC formerly PGMS.

(Thu Jun 26 1997 09:03)
Bonds could be interesting today...

(Thu Jun 26 1997 09:09)
Joke of the morn
Looks like some life in gold and silver--I still think we should call a priest to give last rites just in case. The following are some pretty good sports quotes which make me irritable that these guys are living so much more affluently than I find myself living--probably they have not been introduced to the wonderful world of commodities and futures trading and still have their ill gotten gains.

"You guys line up alphabetically by height."
- Bill Peterson, a Florida State football coach

"You guys pair up in groups of three, then line up in a circle."
- Bill Peterson, a Florida State football coach

"I play football. I'm not trying to be a professor. The tests
don't seem to make sense to me, measuring your brain on stuff I
haven't been through in school."
-Clemson recruit Ray Forsythe, who was ineligible as a freshman
because of academic requirements

"Why would anyone expect him to come out smarter? He went to
prison for three years, not Princeton."
-Boxing promoter Dan Duva on Mike Tyson hooking up again
with promoter Don King

"That's so when I forget how to spell my name, I can still
find my #%@# clothes."
- Stu Grimson, Chicago Blackhawks left wing, explaining why he
keeps a color photo of himself above his locker

"I can't really remember the names of the clubs that we went to."
- Shaquille O'Neal on whether he had visited the Parthenon
during his visit to Greece

"I'm going to graduate on time, no matter how long it takes."
-Senior basketball player at the University of Pittsburgh

"Nobody in football should be called a genius. A genius is a
guy like Norman Einstein."
- Football commentator and former player Joe Theismann

(Thu Jun 26 1997 09:12)
JMA: I buy my gold coins from F.J.Vollmer Co, Bloomington, Illinois.
When gold was $342.00, They were selling at $356.25 ( for 10 0z. lot )
This included shipping and INS.etc.. If buying less than 10 oz. the cost $358.00 and you pay the shipping costs. Their buy back price is $353.25.
Phone# 1-800-447-8368. Internet

(Thu Jun 26 1997 09:33)
" It is time to buy South African gold shares. At these prices the
shares are cheap. Gold is going to wake up one morning and then you
will see $450-00 in no time"

George s. Cole
(Thu Jun 26 1997 09:46)
August Top?

There are many technical signals that the market will make a final blowoff top this August around Dow 8500. Last August blowoff top was in 1997 -- we all know what followed. Check out the charts and commentary at:

(Thu Jun 26 1997 09:52)
Steve@Perth: Thanks for your lateral response . I hope you don't regret your decision to post a non-commercial e-mail address here.

George S. Cole
(Thu Jun 26 1997 09:55)
Hong Kong and Taiwan
Milhouse: As usual your post this morning on why the trade deficit matters was right on the money!

Expectations of problems in Hong Kong following its return to China probably are exaggerated -- at least for the near-term. Remember China also wants to persuade Taiwan to voluntarily rejoin the Fatherland. Towards this end, they can be expected to scrupulously observe their agreement with the British re: Hong Kong governance. Screwing up Hong Kong will doom any chance of regaining Taiwan for many years to come.

(Thu Jun 26 1997 09:55)
George S Cole: What happened after August 1997???????????

George S. Cole
(Thu Jun 26 1997 09:58)
Amazed: Obviously I meant August 1987. Am sure most Kitcoites recognized this as a typo.

(Thu Jun 26 1997 10:03)
When are all those wankers going to stop selling gold $%^$%^%^%#^

Lan Man
(Thu Jun 26 1997 10:17)
I purchased from Calif. Numismatics yesterday and premium was 4.2%

From the May 1997 listing by the Silver & Gold Report:

Calif. Numismatic Investments...CA...800-225-7531...Recorded Quote Line 310-671-6092
F.J. Vollmer & Co...IL...800-447-8368
Gaithersburg Coin Exchange...MD...800-638-4104
Jefferson Financial...LA...800-877-8847
Blanchard & Co...LA...800-880-4653
Mike Fuljenz Universal Coin...TX...800-459-2646
Camino Coin...800-348-8001, in CA 800-348-3001
Benham Certified Metals...CA...800-447-4653...HI...415-965-4275
Bill FL...561-368-7707
Dallas Gold & TX...214-484-3362
Dillion Gage...TX...800-537-2583
National Gold Exchange...FL...813-969-4111
Rare Coins of New Hampshire...NH...800-225-7264
Sam Sloat...CT...800-243-5670
Tangible Investments of Amer...CA...800-890-1394
Wilmington Trust Co...DE...800-223-1080

All of the above were ranked fair or better in pricing. The dealers they advise to stay away from include:

Eastern Numismatics...Garden City, NY
Eagles Coin Shop...Indianapolis, IN
Numismatics International...Plainview, NY
Panda America... Torrance, CA

Hope this helps, have only dealt with CNI, Universal Coin and Camino, all provide great service and quotes over the phone. There are many other dealers out there, some are either ranked low due to pricing or refused to quote over the phone or were just not included in the survey.

(Thu Jun 26 1997 10:19)

the current action in gold could be very constructive. If gold doesn't bottom now ( within the next few days ) , it probably won't bottom until Q1 1998. Let's hope it bottoms now !
Note - according to Martin Armstrong, gold needs to hold 334 on a monthly closing basis in 1997 otherwise new lows are likely.
Goodnight from HK, Milhouse

(Thu Jun 26 1997 10:20)
Is the market overvalued? Are we in for another 1987 crash?
Click on--

George S. Cole: I would appreciate your comments on this article.

Paul Smith
(Thu Jun 26 1997 10:23)

There seems to be a problem with the URL you just posted. Please check it and post again - I'm very interested to read the article you mention.



(Thu Jun 26 1997 10:25)
Last post the URL was typed wrong.

Should have been:

(Thu Jun 26 1997 10:26)
Sorry for my earlier post, but its a frustrating business eh!

(Thu Jun 26 1997 10:37)
XAU and Gold up ... Someone was listening YES GO !!!

Lan Man
(Thu Jun 26 1997 10:37)
to John@looking
Almost forgot the plug: The Silver & Gold Report can be reached at 561-627-3300 for subscription info, they have an automatic monthly billing for $8.00/mo.

Editor is James DiGeorgia and the Editor Emeritus is Dan Rosenthal.

(Thu Jun 26 1997 10:39)
Hey y'all,

We got us an interesting ball game, with gold going down and XAU & HUI going the other way. George S. said this is the way it should be, now let's watch the fun and developments.

(Thu Jun 26 1997 10:52)
$325 a half dozen times before $400 once
Will we see $335 today? Where is the asian support for gold? Oh, woe.

(Thu Jun 26 1997 10:56)
Shilly-shallying on Hong Kong. Frogmen Everywhere.
As Clinton and Blair reverse their earlier decision to boycott the "provisional legislature's" swearing in ceremony ( a thug's legislature ) on July 1, their appalling hypocrisy can only serve to send chills through the pro-democracy ranks in Hong Kong, encourage Beijing to renege on its earlier promise to keep its tentacles off Hong Kong, and lull goldbugs into believing Hong Kong itself is a non-issue. My prediction: Representatives Emily Lau and Martin Lee will be confined to a "re-education" slave camp -- a logai -- within a year, democracy and free speech will be thoroughly crushed, and every aspect of life in Hong Kong will be micro-managed from Beijing. Never trust a dragon.

Disclaimer: Risk of loss in futures markets is substantial. Neither take nor give advice. Use your own head.

(Thu Jun 26 1997 11:01)
That's a great FDPMX/FSAGX chart, very nice, you provide at
Just one problem - It's going in the wrong direction!!!
Make it go UP! NOT DOWN! UP UP UP UP UP UP!!!! Any questions!?!?!?

George S. Cole
(Thu Jun 26 1997 11:08)
stock market outlook
Barney: Frankly I am agnostic on the question of whether or not a crash is in store this fall, but am quite certain that we will see a drop of at least 20% once market peaks. This could well take some time to play out. In fact my preferred scenario is for the market to peak in August and sell off 20-30% by early 1998. of course this makes me an optimist compared with Steve Puetz's dire predictions.

Market is overvalued by every measure except P/E ratios. And never forget that earnings forecasts are subject to revision as are interest rate forecasts. If people remain confident that 1998 earnings will come in strong and interest rates will remain relatively low, market may not drop more than 20%. But if people start to revise their interest rate and earnings forecasts, equities could drop much more than this.

Another possible scenario -- economy weakens, earnings forecasts come down, but so do interest rates. Result -- defensive stocks hold up well, but cyclicals get smashed. Still another -- economy strengthens, Fed tightens, cyclicals do well for a while as financials get smashed, then everything goes south.

And don't ignore political trends here and abroad. The complete domination of both parties by Fortune 500/Wall Street and public acquiescence in this has been a key factor behind the stock's market's surge over the last few years. If any of this starts to change for the worse, market would be very vulnerable.

Technically, the market almost certainly will experience the sharpest drop since 1999 after it peaks this summer. But how severe this drop will be ( 20% 30% 40% ) very uncertain as is the length of the decline ( crash or more traditional bear market ) .

BTW, this bull market has been running over 2.5 years now. If you look at all the bull moves between 1982 and 1994, none has lasted much longer than this.

(Thu Jun 26 1997 11:12)
"sharpest drop since 1999" Amazing series of typos Mr. Cole. Message clear though. Gold up Stocks down.

George S. Cole
(Thu Jun 26 1997 11:15)
Amazed: Thanks for spotting the typos! Should have read sharpest drop since 1990.

Steve (Perth - Western Australia)
(Thu Jun 26 1997 11:21)
Good question: Where IS the ASIAN support for GOLD??????
Is Hashimoto stringing us a line??
Fundy: I collect my email when I get around to it.
An aside: I have discovered my purpose in life....emptying my letterbox ( snailmail ) of junk mail! Do you remember pre-junk mail?

(Thu Jun 26 1997 11:21)
Does anyone know of current research on "psychological effects of dropping big wampum in precious metals"? I feel sort of faint. George, you too, man? Hey, make all the typos you want, amigo. I enjoy your comments.

(Thu Jun 26 1997 11:21)
Does anyone know of current research on "psychological effects of dropping big wampum in precious metals"? I feel sort of faint. George, you too, man? Hey, make all the typos you want, amigo. I enjoy you comments.

George s. Cole
(Thu Jun 26 1997 11:32)
gold bottom?
I view recent gold stock action as constructive, but far from decisive. Like the fact that XAU and HUI are acting relatively well considering the pressure on bullion ( btw, August gold was up 60 cents a few minutes ago ) . But a few days action does not a trend make. IF THIS POSITIVE DIVERGENCE PERSISTS until the end of the month, the odds of a strong July rally will grow exponentially.

(Thu Jun 26 1997 11:45)
Steve*Perth: don't recall pre junk mail.

(Thu Jun 26 1997 11:56)
SCOTIAMcLEOD put out a buy recommendation on gold this morning

(Thu Jun 26 1997 12:00)
belly ache
WW re your 7:09 It's like eating ice cream...the Japanese have simply had too much of a "good thing"; trouble is, while they were enjoying themselves, they bought the factory. Now, what to do with all that ice cream......

(Thu Jun 26 1997 12:12)

(Thu Jun 26 1997 12:14)

Sorry...Thumbs too quick....

Date: Wed Jun 25 1997 17:58
M.Graves ( @ Valley ) :
TSE gold & precious metal index up 1.12%

Mr. Graves, Just out of curiosity, did any of your Metals funds gain? Mine lost even though the TSE was up. How was yours?


(Thu Jun 26 1997 12:14)
The Point of Maximum Optimism by Michael Belkin (Strategic Investment)
Internationally acclaimed Analyst asserts over-valuation, irrational exuberance, expanded risk-exposure & technical hyper over-extension will cause horrendous losses when bubble bursts. See Editorials:

(Thu Jun 26 1997 12:25)
Canada@God save the Queen
Opinion-technical update Dow,SP= slightly bullish Gold = slightly Bullish XAU = slightly Bullish Dollar slightly bearish. 358 gold & 112 xau is a great place for happy bears to short otherwise this could be a real sleeper.Have a happy weekend .The Queen Is here.

Mr. M
(Thu Jun 26 1997 12:25)

o Russia barely able to inject its industrial metals into the market.
o Japan threatens to sell US bonds; China might already be doing so.
o OPEC threatens to drive up price of oil.

A myopic wallstreet is blind to international issues unless it can be hyped as providing cheep labor resulting in lower inflation. The bears will be very angry with Goldilocks and will exhibit no mercy in extracting every ounce of their stolen porridge.

(Thu Jun 26 1997 12:34)
MILHOUSE: Are you really in Hong Kong?

(Thu Jun 26 1997 12:39)
Go P&P!
Panda - Joined you in SWC today. The more I learn about Platinum and Palladium, the more I like them. Cheers.

(Thu Jun 26 1997 12:41)
@Reality-the China Card
Philosophically, in the long run, Hong Kong will not become part of China; China will become part of Hong Kong. The Chinese will come to the conclusion that Chairman Mao wrote the Bible and that he invented Capitalism. The Chinese are the most practical people on earth and they will support the dollar only if they feel that they can get more than they can lose from the deal. In the end, if US debt continues to increase, they must buy gold. They must buy gold because they are too practical not to buy gold.

The real revolution in finances will come when a vitalized China takes on the mantle of Hong Kong. Imagine a country the size of China with the economics of Hong Kong. China will be a Capitalist economy; they will not folow the socialist road; the socialist road is not practical; the Chinese look around the world and they see socialism failing everywhere; they will not shortly grant democratic liberties; they will opt for a maximum 15% tax rate; they will call it all communism; then let's see how well the western democracies can compete with the Chinese.
We must change or they will be the # 1 economic power in the world. Will we change?

(Thu Jun 26 1997 12:42)
George S. Cole: Your comments to my post, as well as all your posts
are appreciated very much.

Crystal Ball
(Thu Jun 26 1997 12:42)
Temporary XAU Bear
Personal opinion, but I think the XAU is a sell here, will probably crumble with the rest of the stocks. :- (

(Thu Jun 26 1997 13:09)
Steve 5:18 Thanks for clarifying to the group. I am aware of the difference. I've even eaten Emu burgers...tastes like chicken - NOT.
Back to my point - NEITHER WILL FLY! OR
as Mike Myers ( Wayne's World ) would say...Yeah right, and pigs will fly outta my butt!



but i still like the bitter

(Thu Jun 26 1997 13:21)
Mega-Bear gives 20 advance signals calling for total liquidation of stocks - and taking refuge in gold & silver coins. See Steve Puetz Letter. Click RELOAD:

Mike Sheller
(Thu Jun 26 1997 13:23)
after almuerzo
GENE: Agree with everything you said re China, except leave it open for Shanghai to become THE finance center of the Pacific Rim in the years to come.

(Thu Jun 26 1997 13:25)
Mike Sheller: What is the political future of Shanghi? Are they free forever or under a similiar death watch?

(Thu Jun 26 1997 13:26)
Mike Sheller: What is the political future of Shanghi? Are they free forever or under a similiar death watch?

joe d
(Thu Jun 26 1997 13:39)
To all: With the chat about buying and selling physical holdings, I wanted to pass along the following: American Century Precious Metals charges 1% to buy, 1% to sell. They have all the popular stuff: maples, eagles, bars, junk bag silver, etc. You can have it shipped or stored. They are part of the American Century Mutual fund operation, formerly Benham Precious Metals. When you want to buy or sell, the agent will put you on hold and call a wholesaler for a current spot price on the item involved, add 1% to that, and call it done. If you set up a money market account with the mutual fund side of the house, the funds can move from/to it very easily - and quickly! I've found it the cleanest, cheapest way to buy and sell physicals. They can be reached at 1-800-447-4653. NOTE: I DO NOT work for this organization.

(Thu Jun 26 1997 13:42)
REF:Gene ( @Reality-the China Card ) : IMVHO, Gene has fast-forwarded and sees the Sino-continent with more than perfect vision. Many international Western Economists have stated the China Economy will be the strongest in the world by 2010 -- bar none. In addtion to being a very practical people, they are one of the hardest working. And are those not the fundamental tenets which made our society great?? I foresee the growing Chinese discontent of hard-line Communisism dove-tailing in the near future with the entrepreneurial aspects of Capitalism. So convinced of this inevitability am I, that I would begin learning Manadrin... if I were a younger man. Interestinly, I have met literally many 1000s of Chinese in my business life - WITHOUT EXCEPTION THEY ALL SPOKE ENGLISH! And of the hundreds of thousands of Westerners whose path I have crossed, NARY A SOUL SPOKE ANY CHINESE -- not even Pinyin!! The Chinese are INDEED an industrious and practical people. We would all do well investment-wise to keep a sharp eagle-eye ( pardon the website-plug ) on what China is doing.

(Thu Jun 26 1997 14:16)
@ what where when
Up a buck and bouncin off 340. I can kick back at last!

(Thu Jun 26 1997 14:21)
@ what where when
Is this it B.T. Up a buck. Made my day.

(Thu Jun 26 1997 14:24)
thanks joe
joe d: Thanks for the American Century Precious Metals recommendation. I called for an information packet, and told the very helpful telephone salesman about the Kitco discussion group. Minimum orders are $2000, which avoids sales tax on delivered coins. They also sell for storage in Delaware if preferred.

(Thu Jun 26 1997 14:29)
@for U
news item excerpt ( reuters, London ) :


Dealers said there were few incentives to invest in gold and lift it away from current low prices while the threat of central bank sales loomed over the market.

``If we were to see some ( mine ) shafts being closed down in South Africa then that could change things,'' a dealer said.

However a less hopeful view came from SBC Warburg.

In a report, in which it downgraded its gold price forecasts through to 1999, its researchers estimated only about 32 tonnes of gold production would be lost through to the end of the century if the 1998 and 1999 price averaged $335.00.

Producers were more likely to step up forward selling to protect profit margins. An net additional 753 tonnes of metal would be delivered to the market by end 1999 through hedging, SBC Warburg estimated.

(Thu Jun 26 1997 14:32)
@ Valley
Front ( 12:14 ) Yes , a couple of my metal funds did bounce back and most of the others held their own. I'm in heavy on junior miners and some exploration plays, but I'm waiting for gold to show it's true color before jumping on any seniors such as ABX,PDG,NEM. Some precious metal mutual funds are starting to look attractive,but they all have been beaten up.Until gold starts it's true rally and the markets correct , I'm sticking with what I have. I always watch the indexes to see where people are headed and have noticed that the TSE over the last week or so has had more declining stocks than advancing,even though it was up.Like many others on this site I'm waiting for the correction.

(Thu Jun 26 1997 15:09)
Where's them dippies when you need them?

(Thu Jun 26 1997 15:11)
My Charts show previous FSAGX Low at $20.69, 40+ Market days ago,
Today looks like this level is holding and defines a double bottom.
This could be an Excellent entry point. I do not get a warm feeling
looking at FDPMX, however percentage wise they are about the same.

(Thu Jun 26 1997 15:16)
@thanks HAL
DJIA blasts through 7600!

(Thu Jun 26 1997 15:20)
@ The Public Library
Just Follow the Bouncing Ball: Dow down -73

George S. Cole
(Thu Jun 26 1997 16:14)
Barney: Glad you find my posts useful!

Mr. M: You are right on target regarding Wall Street spin doctors. Their job is put the most bullish spin possible on all news so as to keep the bull alive and their employers profits high as long as possible. Heeding their advice has been very profitable for the past 2.5 years, but those who do not get out in time ( most investors ) will give back all their winnings and then some.

ALL: Just to make myself crystal clear, anyone who believes in Ralph Accompura's dream of a 10,000 Dow by next spring should not be in gold except for quick trades. As long as this paper bull continues gold will be flat at best down at worst. By the same token anybody who is bullish on gold should not be in any stocks except gold stocks on a long-term basis. If gold really is about to reverse its slump ( as I believe ) and start a major move north before long, stocks will be going lower, probably a lot lower. So take your choice folks -- stocks or gold. But not both.

George S. Cole
(Thu Jun 26 1997 16:32)
stocks and gold
Dow off 35 at close. I suspect we will be going down a few hundred points by the end of next week, but nothing too dramtic YET. Final blowoff rally should begin later in July.

August gold up 80 cents today, XAU and HUI up modestly on modest volume. Stock action less constructive than yesterday. Looks we we may be bottoming, but no big upside moves likely in the near future.

Unless something big happens tomorrow BT will be a washout. Hope he makes it.

(Thu Jun 26 1997 16:36)
George S. Cole: I agree with your logic on "gold or stocks but not both" and coincidentally was stopped out of my last non-metals stock today. It's cash and bullion and metals stocks for me for a while. What's your take on BT now?

(Thu Jun 26 1997 17:28)
@Elliott Waves
I looked at the charts of two major gold producers this morning, Barrick, and Newmont, and both appeared to still be in their fourth wave position. If I am correct in my count, they both have some to go on the downside in the fifth wave. This means that the XAU will not likely go anywhere until the majors complete the fifth wave. Any one else out there have a different wave count? I hope that I am wrong on this one.

Ken Tatum
(Thu Jun 26 1997 17:33)
I'm new to the gold investing business. I decided to by in BGEIX as it follows the FT-SE Gold Mine Index. I bought it for technical reasons. FT-SE Index looks to be testing ( and holding above ) previous lows. Could this be a double bottom? I don't see much written on this board for Gold Mining Stocks and funds. Does anyone have any useful insight?


(Thu Jun 26 1997 17:50)
if the recent hasimoto remarks sparks the fed to raise
rates at their next meeting, what is the best vehicle
to to use for profit??
eurodollars are in an extremely tight channel. they are at 94.14.
sept 93.75 puts are less than $30.00 each. thats 39 basis pts
away from a big profit, if the fed decides to do what so many
believe they will not do. raise rates! this next meeting could
well be the one where they raise rates big time. is this
plausible? ANYthing is possible. our economy is steam-rolling
along, taking no prisoners. it is IN OUR INTEREST for rates
to rise. the pendulum has dwelt too long on the side of easy,
cheap credit. the arc has reached its' apex, the return journey
begun. be wise, de-paperize. could that be a "new" term?

gold dec 400.00 strike calls are less than $30.00 each.

for less than $180.00 you can have both of these options
and be positioned for the un-expected.

who called copper a good short last week?

cherokee!; ) limb-climber, and driver of the ssm for
the en-hancement of smoke-signalers through-out the

(Thu Jun 26 1997 17:59)
Ken Tatum: Welcome aboard. While I am not TA proficient enough to give you an answer I am sure someone will. Little slow here this afternoon, hang in there. Pay attention to that smokemobile driver, Cherokee, good calls.

(Thu Jun 26 1997 18:02)
@ For what it's worth
Knight Ridder reports: "Bearishness in the physical market after a widely attended conference in Prague convinced some [gold] producers to lock in prices now and at least guarantee themselves a return on their product.... This producer selling ran counter to banks' moves, with institutions moving to buy metal throughout the day. This helped give gold buoyancy but was not enough to spark a short-covering rally."

It looks like banks are finally buying, only to have gold-mining companies pick up their selling.

Ted Arnold, of Merrill Lynch issued a bearish report on gold. Some felt this exerted some downward pressure on the yellow metal: "The bulls just don't seem to realize that the weight of hot money in this world is not going to pour back into gold as it did in the 1970s. Gold has had its day in the wset as a financial asset and as a hedge system risk. We continue to believe that the action will be in the currency and bond markets and the financial futures markets. It won't be in physical gold or in gold futures. Expect to see $250 an ounce before you see $450. Be alert to sell into all rallies that come your way."

I wonder if a crash in the financial markets and a US Dollar crisis will alter Mr. Arnold's view, and others who think like him?

(Thu Jun 26 1997 18:12)
@Gold in The Toilet...Call the Roto-Rooter
YES. Gold is in the TOILET. And it seems that everyone is rushing in to Give a flush or two ( news 4 u 14:29 and countless others ) .

And as everyone is trying to flush down this GOLD, this PARIAH, it is acting like the very large turd that it has been and is refusing to go down the drain.

That being said... that Camode is getting so backed up, and so crapped on that when the bowl starts to overflow... not ten, not one hundred Roto-Rooter men/ladies could stem the tide of poop we call GOLD.

That being said...



(Thu Jun 26 1997 18:13)
SUPPLY HITS THE BOND MARKET: Knight Ridder says: "The late dive in Treasury prices was linked to rumors about a Brady bond buyback that could result in the sale of Treasury zero coupons... Also, the supply of new corporate securities and the bond market's efforts to digest this week's Treasury issuance of 2-year and 5-year notes have played a role in the price declines."

Hummmm? Too much supply, not enough demand = lower prices. I wonder how central banks will be able to sell their Treasuries in this environment?

Item: The Federal Reserve reported today that foreign central banks sold $7.3 billion worth of Treasury securities last week -- thus, reducing their holdings to $634.7 billion. In other words, they still have 100 times the amount sold last week still waiting to be sold.

(Thu Jun 26 1997 18:13)
Well today's move off the lows finally scared me ( I was short ) . I covered all my shorts today. I didn't go long thought. Looking at my data I see that open interest increased by 10,000 on June 18. The high that day was 344.40. I would think that a close above 344.40 would get me to go long. The lowest close we had so far was 339.00, which happened yesterday. I would problable go short again if we close below this tomorrow.
One think that I did not like was the XAU surging and then I get home and see it closed up only alittle. HUMM????

(Thu Jun 26 1997 18:16)
can anyone spell Camode?

i give up...



(Thu Jun 26 1997 18:20)
Here I sit in silent bliss, listening to the falling...

but you know the rest

(Thu Jun 26 1997 18:25)
@golden throne
EB Commode. Everything is just going commodiously isn't it.

(Thu Jun 26 1997 18:32)
Some interesting recurring patterns in the continuing gold futures chart. This one is the weekly with emphasis on the Jan/Feb 96 period. Note the overall shape of the action during that time and compare it to the Feb 97 to now action. Very similar in appearance. Next post to follow will be a daily which will show a third pattern of still smaller magnitude.

(Thu Jun 26 1997 18:39)
Here is the daily continuing chart showing the same relative pattern for the recent May/June 97 period with Feb 97 to the left.

These are offered as curiosities but they would seem to be bear some relation to fractals in that they are repeating patterns of dissimalar magnitude. Anyone into the application of fractals to TA?

Since the first 2 patterns resolved themselves to the downside; what are the bets regarding the direction of the third?

(Thu Jun 26 1997 18:40)
So what happens if producers sell to the banks and then after a while the banks sell to the producers and then so on and so on and so on.....

(Thu Jun 26 1997 18:41)
Sorry 'bout that. I failed to review B4 post. ... Here is the daily chart.

(Thu Jun 26 1997 18:41)
So where is gold headed? What is everybody's oppinion?

(Thu Jun 26 1997 18:47)
EARL: gold does love those triangle patterns!! I was always told most markets tend to break towards the flat side of the triangle. Although, gold is notorious for false breakouts, so if it does break to the downside, I would say there's a good chance for a quick reversal back up through. Needless to say, the first 3 wks of July should be most interesting!

(Thu Jun 26 1997 18:55)
@Spooky Run on Mutual Funds
DJ, Steve, and all: thanks for forcing me to take more detailed look at
MF rules. My previous response that you can move retirement MF money
between family of funds is true up to the point when the dam break loose!
When BAD things happen, investors are out of luck! The following
is the excerpt from Fidelity rules:
Your exchanges may be restricted or
refused if the fund receives or anticipates
simultaneous orders affecting
significant portions of the funds assets.
In particular, a pattern of exchanges
that coincides with a "market timing"
strategy may be disruptive to the fund.
Although the fund will attempt to give
you prior notice whenever it is reason-ably
able to do so, it may impose these
restrictions at any time. The fund reserves
the right to terminate or modify
the exchange privilege in the future.

This is followed by usual warning:
Mutual fund shares are not deposits or obligations
of, or guaranteed by, any depository
institution. Shares are not insured by the FDIC,
Federal Reserve Board, or any other agency,
and are subject to investment risks, including
possible loss of principal amount invested.
This means that when the plunge begins, you go down with it
without any chance to protect your money. Thank you but thank you
- I just moved the rest of my stock allocation to a parking place. I
left some money in metal MF because I stepped in too soon - hopefully,
in a long run, I'll recover it.

Why being in Mutual Funds? The heck for every $1 I put into my 403K
account, company chipped in $1.20 - difficult to beat! On the other
side MF was the only place where I could put it and get some good

I am more then certain that 90% of investors in retirement MF do not
read the fine print, so more when all PR press says "market is the
safe place to be - dont worry be happy!"

My question is: if baby boomers cant take the money out of plunging
market how deep it will go assuming the outflow of money will be
slowed down by the restrictions which are in place?!

My advice would be get out before you can!!

George S. Cole
(Thu Jun 26 1997 19:14)
Ted Arnold
Steve Puetz:

I wouldn't take Ted Arnold or any of his Wall Street clones seriously. They have a HIDDEN AGENDA -- keep gold declining so that the paper peddled by the Wall Street houses will keep going up. Ted Arnold is not an objective analyst here, but rather a purveyor of BIG LIES. These people are propagandists not serious analysts.

I'm not arguing that all gold bears including those here at KITCO are dishonest. Far from it. But anybody who Takes Ted Arnold and Andy Smith seriously as gold analysts is VERY VERY NAIVE. These peoples' job is to drive gold down by any means possible.

BTW, if gold does drop to $250, the Dow probably will be pushing 12,000 or more. How can Merrill Lynch employee Arnold possibly be objective ( in public ) on the gold price outlook.

(Thu Jun 26 1997 19:28)
Given the effort made to stem the drop in the DOW tide today I would prognosticate that the DOW will be up 75 tomorrow. The paper market's bullish position is becoming less and less supportable as the days pass. This paper bull is about as fresh to my psychic mind as rancid hamburger rife with gold maggots. I further as I survey the mists and potions about me see gold rising again tomorrow to the old 340 benchmark and that silver will again teeter at the 4.80 an ounce touchstone preparatory to its rally which will preceed gold's big rally. First platinum, then silver and then gold. The glass fogs and the vision fades.

(Thu Jun 26 1997 20:04)
It is a well-known fact that Merrill Lynch generates humongous profits in commissions as the world's largest broker of gold call options. As long as the gold price remains subdued, this bonanza will continue unabated - and with very little risk to ML. It is even suspected ML acts as principal in writing the gold calls -- WHICH NEARLY ALWAYS EXPIRE WORTHLESS to the hapless innocent victums who bought the calls. To put it into Street parlance, "it ain't kosher business." For this reason alone Merrill's opinion is totally biased - based upon the company's profit motive vs the public's right to a fair and honest opinion. These activities should be investigated by those government agencies established to protect the public. And if for political reasons this is nor feasible, then some young, energetic and honest Congressman should pick up the banner for the gullible buyers of 'stacked-deck' called Gold Calls. I believe the applicable term is CLASS-ACTION!

(Thu Jun 26 1997 20:05)

Thanks for the web site. I've been surfing for the exact thing.


(Thu Jun 26 1997 20:20)
@ Follow Up:
Earl: Here's another chart on weekly gold. Go down to the bottom and take a look at the stocastic blue and red lines. You should see the pattern you pointed out. But notice that the Feb 97 lows were not as low as the July 96 lows.

(Thu Jun 26 1997 20:22)
@ witsend.
It's begining to look as though that dagger BT mentioned is aimed at the heart of us goldbugs.And as for paradigm shifts it appears that gold is caught in one that began in 1971. While gold refuses to submit for the momment to the present onslaught of "bad" news neither can it bounce much to the positive sounds of Mr.Hashimoto.Is this because the only buyers left are a bunch of wounded goldbugs clinging tenaciously to a golden fancy. But let us remember it is not REASON that moves markets its's Greed and Fear.And it appears that only the latter can provide a bullish spark for gold at this point. I'm still holding on to my towel mind you, but only just!

(Thu Jun 26 1997 20:33)
Richly dressed!
This is an application for platinum I haven't heard of before. Somewhat humerous, but also an indicator, hmmmm.

(Thu Jun 26 1997 20:34)

One ounce of the yellow metal says 350 before 325. You in?

(Thu Jun 26 1997 20:41)
walking the tightrope
If as Rubin says Japan owns 300 Billion in Treas and assuming 6.75% interest and an additional 50 Billion each yr from the trade deficit, the Japanese would have approx 1 1/4 trillion in just 10 years and growing by over 120 Billion in the 11 th yr.

(Thu Jun 26 1997 20:47)
For those interested in a wider view of PMs, here is a ratio chart of PL/GC. Its taken from the continuing futures chart. The MA is 20 days.

It appears that PL just got a little ahead of itself on the recent runup.

(Thu Jun 26 1997 20:54)

If my numbers are correct, today's London PM Fixing @ $336.95 is a FOUR YEAR LOW.

(Thu Jun 26 1997 20:54)

Plaintalker: Thats why Hashimoto is hinting at diversification.

(Thu Jun 26 1997 21:02)
Since the Japanese have been occupying some space here of late, I thought some might be interested in seeing an overlay of the J-YEN on the GC chart. Note the recent divergence in last month's action.

(Thu Jun 26 1997 21:16)
Byron: In addition, your chart shows that the stochastics have formed a formed a bottom in place since last July. Also of note are the massive engulfing patterns at signigicant tops. ... See one of those in the future and know its time to pick up the dice and run like hell.

Mike Sheller
(Thu Jun 26 1997 21:17)
blackout on Long Island
Post storm Blackout sent me, the wife, & dog into the neighborhood for a walk. Encountered the most magnificent rainbow I've seen in a while. A Long while. A little girl in the street asked innocently "Is there gold over there?" Is it a sign, Kitcoites? Yes, Virginia...Maple Leafs and Kruggerrands, and Philharmonics. All glistening in the setting sunlight. Yes Virginia...there is gold there...

(Thu Jun 26 1997 21:21)
Wild Euphoria, Expiration Pause, Quarter's End & Risk Loom
CNBC-TV Financial Celebrity believes market still not seen top - but its on tippy-toes. On Gold: ...this is what a bottom looks like. Gene Inger letter Forecast:

Mike Sheller
(Thu Jun 26 1997 21:23)
FUNDY: Shanghai is, and has long been, the most sophisticated, worldly city in the People's Republic. A long time finance center, my folks in China tell me it is the government's intention that it be the financial center of the nation after Hong Kong is absorbed. Entrepreneurs and citizens with whom I have close contact are even moving from Beijing, or sending out advance parties and corporate extensions into Shanghai. Real Estate construction there is booming, and apartments are a very nice investment for those who can afford them. The Shanghaise have always been a bit more cosmopolitan than the rest of the Eastern seaboard Chinese.
The young people are very encouraging.

(Thu Jun 26 1997 21:25)
FWIW column, gold will have to decisively break $340 to change the trend. I would like to see a $5 break out to the upside very soon. To me, it looks like one of two things. Gold gets stuck between $335 to $340 in trendless trading, or we go lower. :- (

What could save it? A crisis of some sort. Financial, political ( ? ) , Space Aliens, I'll take anything at this point!

I have noticed the S.A. ADRs are approaching their 1993 lows, and getting cheaper...

Regarding all this talk about Mutual Fund redemptions, haven't you heard? Everyone is in it for the loooong run! :- ) )

(Thu Jun 26 1997 21:27)
Current positions, if you're following these trades keep stop on GCQ7 at 338.0 stop close only on long positions purchased under 340. The risk is $200 a contract with a potential of $1500-2000. On purchases of ABX at 22-1/4 or lower keep stop at 21 stop close with an objecctive of 27-28. On XAU calls purchased under 97, hold, the market may still test 94-95. First objective 110-112. I am at breakeven or have slight profits in all these positions.

Mike Sheller
(Thu Jun 26 1997 21:31)
Forgive me Ted
A joke e-mailed from a friend in Vermont ( Thank goodness Ted isn't around to hear that ) .
Three health professionals arrive at the "Pearly Gates". St. Peter addresses the first
one, "and what did you do below to deserve to come up here?"
"I was a physician," the man replied. "I'm sure that over the years I made some bad
calls but on the whole I feel that I been of some help to humanity."
Saint Peter reaches out for his hand and says, "you sound like just the right person for
this place. Come right in." He turns to the second person and asks the same question.
"I was a nurse,"she replied. "I spent my life trying to give relief to other people's suffering even though at times I was overwhelmed by the task."
St. Peter smiles and says "you sound just like the person we need. Welcome to Heaven." He then turns to the third person and asks the same question again.
"I Managed an HMO," the man replied,stepping forward. "I had to make a lot of tough decisions, money being tight and all those indigent people, you know. But on the whole I provided some decent care."
St Peter stroked his beard than began entering data into his computer. After a few minutes he turns to the man and says, "Okay, you've been approved for five days in Heaven."

(Thu Jun 26 1997 21:32)
I'm surprised. I threw in the Merrill Lynch quote by Arnold to show what the gold-bears were saying. I didn't think it would draw much reaction, but it did. The news I thought would bring the most reaction -- that central banks sold over $7 billion worth of US Treasury securities last week -- hasn't been commented on.

(Thu Jun 26 1997 21:39)
Puetz -- My bond chart hasn't forgotten... :- )

(Thu Jun 26 1997 21:44)
@ Panda
I guess the charts do a very good job of summarizing the supply-demand situation.

(Thu Jun 26 1997 21:54)
@ The X-files
Mike Sheller: I don't believe in astrology. However, on rare ocassions ( when markets are in a mania ) , I've noticed they tend to trade with the moon. That is, they rise from the new-moon to the full-moon. They decline from the full-moon to the new-moon. Gold did this for more than two years during the early 1980s when it went bezerk.

The final crash in all of the famous market manias began around the time of a full moon.

Since Fall 1996, the stock market has traded this way. All of the sell-offs have occurred at the time of a full moon. This includes the latest decline which started on the full-moon on June 23rd!!!!

Do market manias attract lunatics??? Do reasonable people head for the exits??? I would like your reaction to this strange phenomena. This is one for the X-files.

(Thu Jun 26 1997 22:07)
Just wanted everyone to know that as of today I'm "all in" on the gold market. I boosted my mutuals and added a few more Eagles to my stash. Although I too think gold is due to a rise, I don't get as emotional as some of the posts I've seen! :- ) ) But, I can conclude that the general consenses is an upward move is expected before the leaves start to turn. FWIW, I'm completely out of the stock market. So now, I'll just wait and see. If things are still stagnant a month from now, I will again add to my two investments.

Who else can comment on actually plunking down some moola in hopes of a rise??

(Thu Jun 26 1997 22:10)
Where's Deaner? I have not seen his posts!! Anyone remember his URL? I have a brand new machine and am starting over in the bookmark department......thanks!!

(Thu Jun 26 1997 22:28)
Japanese imports of palladium down? Must be because they don't want any of that 'worthless' stuff. :- ) ) Some import numbers.

You know gold is in the doldrums when this forum is this quiet! Not even a food fight! :- ) )

(Thu Jun 26 1997 22:29)
TOO quiet here.... Good night all.

(Thu Jun 26 1997 22:32)
Insider: If you already know that ML is "stacking the deck" against you, and you buy the calls anyway, then you are stupid. God help this country if you and your ilk are ever able to pull off a class action suit.

(Thu Jun 26 1997 22:39)
Mike Sheller, your comments are always interesting to read. Especially thanks for the HMO joke. Being on an HMO the truth is painfully clear. Get out of town Hillary and take your husband with you.

(Thu Jun 26 1997 22:42)
Minor joke of the evening
I don't know about the rest of you but I will be glad when Ted returns from his family reunion. I miss his caustic wit. Since Mike posted a little something this evening I thought I might follow that up with a bit of levity to get us ready for a hot Friday.

"It's just to hot to wear clothes today," said Jack as he
stepped out of the shower. "Honey, what do you think the
neighbors would think if I mowed the lawn like this?"

"Probably that I married you for your money."

(Thu Jun 26 1997 22:51)
I was picking some blackberries this morning and had a pail
of about two quarts when a big dump truck pulls up along side
the road where I was standing. The ole boy driver says, "Not
ready to pick yet, too many reduns." I says, I reckon I'll
get a few. He drives off in a cloud of dust.

Then I think, gol-dang!, picking berries is just like buying
gold stocks. That good ole boy looks down and can't help
but see all the juicy, plump blackberries I have but doesn't.
When the average joe decides now is the time to buy, all the
juicey picks will have dissappeared. One can't wait untill
it is obvious. How many chart readers are waiting? The
proper formation is like a whistle, when you hear it, it is
too late. In other words, as I have said before, buy gold stocks

(Thu Jun 26 1997 22:51)
Scotty: Deaner is at

(Thu Jun 26 1997 22:56)
geff: If you had a half-wit I would take you seriously - but alas it is not the case. For humor sake, allow us to enjoy more of you asinine brayings. With gold in such a dismal trend, we need some entertainment!

(Thu Jun 26 1997 23:00)
putting the finishing touches on the most utterly
disgusting hide that has ever crossed the cross-hairs
of the long-bow. seems that there is a white stripe
running from stem to stern on the critter. turned-out
there was a collar with a name. hope it was not one
of YOUR relatives. its' name WAS BIG ( DUMMY ) TRADER!!
the critter had a forked tongue, and begged for mercy
with "promises that were absolutely absurd". the arrow
flew faster than normal, and wreaked extra havoc with
the lying, forked tongued defiler of the gold spirit.
may its' ashes be scatterd to the four winds for appropriate
dispersal into the voids between dimensions for all eternity.

the grains are almost ready for round two of the '97 bull.

chaos and flux have not forgotten about their duties. you and
yours all have reserved seats for the greatest show on earth,
soon to be playing in local arenas for all to see. el nino
is here at their behest, and he will show, so that those with-out
power will know, who holds the un-stoppable forces at bay and
who allows them to play.

cherokee!; ) burner of the midnight oil, and slayer of gumby would-be
BIG ( dummy ) TRADERS!

(Thu Jun 26 1997 23:04)
20 billion @ Tax Grab
20 Billion tax grab, Canadians ignore, insidious tax increase
" BRACKET CREEP " It is the perfect tax. ( hidden ) Thanks to Mulroney.

Figures can lie, and, liars can figure. eh!

(Thu Jun 26 1997 23:04)
cherokee - go to bed!!

(Thu Jun 26 1997 23:17)
For all Australians: Some gold stocks may be reluctant to move up untill after June 30th ( end financial year ) as some people may sell stocks at discount prices to claim against TAX. Hong Kong, June 30th, rising Gold price and falling DOW may produce something on or after next Tuesday.

(Thu Jun 26 1997 23:20)

you must believe in bt also. the delusion will pass, as does
flatulance. click your heels 3 times and repeat after big bird,

there is no place like kitco
there is no place like kitco
there is no place like kitco

toto leave that em pole alone!

(Thu Jun 26 1997 23:41)
M.SHEllER@2117: I appreciate you vision. Good vibrations/
aura. ANYONE: Financial assets are obviously inflated. How
can a huge part of the economy be inflated and not affect
the other parts. Isn't anyone cashing out? Limos haven't
doubled in count on Wall St? Big tips aren't tossed around?
A silk tie doesn't cost $50? We don't have more money
chasing about the same amount of goods/services? The Gov.
thinks the taxpayers are lambs for the shearing? You bet.
Crafty talk will dump gold only so far. The patience of a
gold bug should not be under estimated. We have history of
a few thousand years. Whats the confederate dollar worth
now? The 1980 peso? The 1939 dollar? ....under control.

(Thu Jun 26 1997 23:44)
FDPMX has been down 14 days in a row now! deeply oversold and well overdue for hopefully a nice bounce. If it can go down 14 days in a row , then the optimist in me says it can go up 14 days in a row once all this end of month, quarter, fiscal year shenanigans is out of the way.

(Thu Jun 26 1997 23:45)
Steve Puetz: " that central banks sold over $7 billion worth of US Treasury securities last week " Is this net of their purchases ?
BTW, do you have the current numbers of their total holdings of US treasurys.

(Thu Jun 26 1997 23:49)


You're welcome .... I guess that means that there are a few more people now who know about the mutual fund ins and outs a bit better. Glad it helped...


(Thu Jun 26 1997 23:50)
I agree; Sometime the gold and discounted shares have to dry up and force a rally. I think June 30th is the day. I think gold is oversold and something is going to break loose after the finacial year. Its just a gut feeling, but often I right!