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.

(Thu Jul 03 1997 00:01)
love that Jennifer Warnes
How about a laugh? Take a look at my home page
Yep, thats me on the right letting all the gold flow out my pan.

(Thu Jul 03 1997 00:06)
hepc: think on it my friend. it's golden.

(Thu Jul 03 1997 00:07)

Paul Smith - Thanks for your support. Some people on this thread
( including me ) would question the politeness of ALL of my posts, however.

Ron - I don't believe I ever indicated I was a medical student anymore.
I think you picked that up from my attackers.

(Thu Jul 03 1997 00:11)
If a commodities trader sold wheat and bought gold would that
make him Rumplestiltskin?

(Thu Jul 03 1997 00:13)
hepc: not to worry. i wouldn't dream of blowing your cover on the eve of our nation's birth. enjoy. cul8tr.

(Thu Jul 03 1997 00:13)

Friend - I plugged "It's golden" into the anagram generator.
Here is what came back:


Of course, to be fair, here is what also came back:
Ogden Silt
Dole Sting
End Gilt So
Ted Long Is
Solid Gent
Old Signet
Dot is Glen
Dot Single

(Thu Jul 03 1997 00:13)

A little deeper reading into the car sales numbers would reveal that the reason that sales were down was because of the strikes in May. Not enough cars were produced to sell. Production runs are now gearing up which will kick the economy higher still in the second half.

To look at falling soybean prices and conclude that the world is heading for deflation is stretching it quite a bit. The value of commodities in predicting inflation and deflation is to look at them from the demand side. Supply shocks, either positive or negative are not at all correlated with long run economics, but are local to the markets traded. Just as $240 Palladium was not a harbinger of hyperinflation neither are Nov beans at 5.85 a sign of impending deflation. By anyones measure worldwide growth is now at a 10 year high. That this is about to roll over into deflation with no exogenous shock would be more than just unusual. The inflation which is happening here in the good old USA is primarily in the service sector of the economy so it is harder to measure and easier to distort.

(Thu Jul 03 1997 00:14)
Hep Hep Hep catgut
Quick!!! Hepcat kitty bozo boy.... Do you hear a noise in the back yard??? You'd better check It out. In your case, I think CDC stands for a Cretin's Dearth of Credibility. Grow up kitty cat crybaby, your whining is tiresome and the amount of energy expended on you so far, has exceeded your gross worth for all time, non nobis te deum. Indulge in your petty paranoias but don't look into the mirror. If you ever remove your self righteous lenses,. you might hate, or at least laugh at what you see. A fragile ego such as yours cannot not survive such a revelation. Goodnight Gritty Kitty lad, may your hep purrs keep you good comfort, for here, you have graduated to insignificance. See ya.........

(Thu Jul 03 1997 00:14)
RJ @23:54: Jeeeez. I think that one went from simple mellowdrama to extreme artistic license. ....... Now RJ, relax and please give us some idea of the quality of your dreams. ...... ( :- ) )

(Thu Jul 03 1997 00:17)
Even makes me wonder
Earl - Just in one of my post apocalypse, beware of the triple 6s routine. Next time, I promise to write of sugar plums fairies, daffodils, and gumdrops, but not tonight.

(Thu Jul 03 1997 00:23)
RJ - Did you ever see the Dennis Miller sketch about the two kids talking
to each other in the swimming pool?

I am wailing on you right now, RJ.

You are like three conversations behind. I am sparkling and you are
just plodding along with the same old tired plays on Cat and Kitty.
Maybe you're blessed with "spirit of the staircase" and can come up
with something after we're signed off, or maybe you can have something
already prepared like that "sent [sic] of dog urine/Sears suit" thing
tonight. Anyway, work on it a little. The three $50 bill thing was't bad,
but it was also stale. Work on some new material, RJ, or hire someone
to write it for you.

(Thu Jul 03 1997 00:23)
For Mike Sheller
Qh Yea....Nubile daughtersYeah, that's it, nubile........and buxom too..

(Thu Jul 03 1997 00:28)
Yes! the Kitty is Gritty....You take yourself sooooooo seriously, while the rest of the world snickers behind your back. Pardon me for doing it to your face. Grow up, lad. Should you fancy yourself a match, I would grind you to powder for the sport and nary skip a beat, you self righteous guttersnipe.

(Thu Jul 03 1997 00:34)

RJ - We already had the match.
Man, did you miss out.

It was brilliant, and more brilliant in that it was evanescent.
Perfect world is the world not created, and all that.

C'mon, RJ, you're bringing prepared material onto the stage.
No scripts here. Spontaneity. Parry and thrust. You've got to
think on your feet.

Serious? Brrrrrraaaaapppppppp!!!!

(Thu Jul 03 1997 00:36)
John-boy - I will wager you continue to read my posts. You, however, have wasted enough of my time. Your name and oh so cute hepcat handle have become transparent to my eyes. Life is to short to piddle on the likes of you. You sure have a lot of friends, don't you?

(Thu Jul 03 1997 00:39)

RJ - I will wager I continue to read everybody's posts.
I just probably won't remember yours.

(Thu Jul 03 1997 00:42)

John, here's a better one:

"I will wager I continue to read everybody's posts.
But I make a special point to forget yours the fastest."

(Thu Jul 03 1997 00:47)

hep - Try this one:

"I wager I will continue to read everybody's posts
and everyone will continue to wager on yours."

(Thu Jul 03 1997 01:00)
BART: Is there a projected date for the return of the search feature?

(Thu Jul 03 1997 01:06)
Fidelity Select American Gold & Precious metals Chart.
Ten market days ( seven hours / prices per day )

(Thu Jul 03 1997 01:07)

For those of you who missed out, think of "GEB: The eternal golden braid."

( Since this reference is going to be too big a stretch for some, I'll explain it, but only
this one time. )

There is also a message hidden in the timing of the posts, just like the position
of a nucleotide within the codon is necessary to determine its "meaning" or
"importance". Very early on, we recognized how things could be encoded in the
space between posts, and we are always trying to get posts entered at
exact times and with certain elapsed times between entries. But there are
a lot of factors that make it difficult to do this - Cludgy response, too many
users, our inability to type long messages in a short amount of time, etc.
For example, the last set of three was supposed to encode "3" "2" "5",
( our signature ) but we missed the second entry deadline by a minute, so in
effect we failed. Still, when I told RJ I was "wailing" on him, you have to
examine the four previous posts, and know a little bit about RJ, for this
to make any sense. Anyway, we got a big kick out of it here.
Sorry for the self-aggrandizement. It's just to point out that sometimes
the sentences are conveying more than the words, and the posts in
toto are trying to convey additional messages.

Investigator of the CDC
(Thu Jul 03 1997 01:28)
Cease and Desist
Heptcat: You should have told the public that CDC ( 404 area phone number ) is the the Center for Demented Clowns. And that your membership had been revoked 3 years ago, because of you're bizarre behavior ( even by CDC standards ) . Please cease and desist, or we shall be obliged to take stern legal action to protect our "reputation."

Yours truly,

Bonaparte Napoleon

(Thu Jul 03 1997 01:44)
Government Institution?

Hepcat....Johnny boy: Did you say, that you work for a Government Institution??? Now that doesn't say much for government employees..... OR did you mean, that you are a patient in a government mental institution?

Pepino di Cortino
(Thu Jul 03 1997 02:07)
Bella Italia, I Lova You...Bacii, Bacii

You guy'sa: Ima know. It'sa Hertz, thatsa whata my girla friend, she say, wenna we maka love in da back of dissa car thata we renta.
It'sa no nice, It'sa maka me sad, to see you guysa fighta witha thisa hepcat guy -uno bruto gato- thasa what Ima thinka. He'sa matto, donna you paya him the attentione. Whata you shoulda do is drinka some vino and be happi, maybe hava a pizze and den chasa the signorene.
I thinka the gold she finda the bottom at about $328 and denna she do upa like, how you say, the fireworksa adda "Una Fiesta Italiano". Mama Mia, bella Italia, I lova you.
How you say?

(Thu Jul 03 1997 02:24)
palermo di sicilia
Como Vai Paisano, Pepino di Cortino ( Bella Italia, I Lova You...Bacchi, Bacchii ) ? Multo bene, e?

It'sa maka me sad, to see you guysa fighta witha thisa hepcat guy - uno bruto gato - e igual um finocchio -- pato louco, capeche, paisano?? E uma prima donna! Cosi fan tuti finocchio! E uma bruta bestia. Capeche paisano? Uma bruta porca, capeche paisano?

Bella Sicilia, eu te amo

(Thu Jul 03 1997 02:35)
Ron @ 12:40
Your treatise on quantum physics was spectacular. Ive often suspected paper clips of this duality, but Hiesenburg also showed us all that the paper clip can just as easily, as infant coat hanger created from the ether, change back into a paper clip. The only evidence we have of this behavior is that we just know it has to happen, much like many just know that gold will go to $500.

Feynman diagrams often resembled Rorschach tests, but the diagrams themselves depicted the "sum over histories", in which any particle takes not one path in a journey, but all possible paths. This paradox has been demonstrated in the experiment of the box with two slits. This experiment proved that a single particle - a photon, lets say - travels trough two slits in a barrier at the same time, and upon reaching a detector is shown to interfere with itself as if it were a wave and not a particle. This has been widely understood to be proof, written into the fabric of space time, that even particles masturbate. Whether or not they feel guilt about this behavior is still unknown.

The aforementioned box with two slits should not be confused with the famous box in which Schroedingers unfortunate cat waits for his fate. Of course in this thought experiment, the cat is less alive or dead than both alive and dead. This holds true until an observer collapses the wave form and a particular history is chosen. Nowhere in discussions of this sad cat has any mention been made that the cat is also an observer and would thus seal its own fate.

Had this cat lived through the diabolical machinations of physicists, with far too much space time on their hands, it would undoubtedly give birth to Schroedingers kittens. Yes, the cat in the box is a female, actually it used to be a paper clip but thats all in the sum over histories now.

Schroedingers kittens are treated with much the same disrespect as their wiry mother, far beyond the assistance or rescue of Bob Barker. These unfortunates are each placed in there own death/life duality box. Each box is rigged to kill these poor cats should a particle measure a certain spin. The reason for two kitties is that, rather than a single particle, a pair of particles, created from a single event, will cause the ax to fall onto one of our fluffy friends.

When two particles a created from a single event, the sum of their "spin" properties must always add to zero. We know the any particle does not "choose" a past until observed, thus, if we observed one particle to have a certain spin, the other particle must then assume a history of the offsetting spin, always obeying Newtons law of conservation of energy, creating a sum of zero.

We now place these two kitties in separate space crafts, connected by a tubular umbilical. The event transpires to create two particles which promptly speed toward their respective kittens. The umbilical is now severed, using a chain saw which spontaneously sprang into being as a side effect of the improbable event of a paper clip choosing the coat hanger lifestyle. These craft speed apart at a significant fraction of the speed of light until, several years later, they are now 1 light year apart. The kittens have survived on strict rations of post-paperclyliptic Meow Mix of which these precocious kitties have asked for by name.

We know that if a particle has X spin, it will break a vile of poison in the box and a kitten will die. We also know that should the particle be measured to have Y spin, the vial will not break, and the kittens will grow to become cats and therefore graduate to the even more frightening experiments of the type visited on their poor mother. We also know that if we measure one of these related particles to have a certain spin, this will collapse the wave form of both particles, which will then assume the only histories available to them, that of an opposite of the other particle and thus obeying the law of conservation of energy.

When we then open the spacecraft of kitty one, we will observe if the fearless feline is alive or dead, always remembering that until the act of observation, the observed particle will not assume any history, preferring its own "sum over histories" until it actually has to choose one. This phenomenon is much like the Clinton administration, which will not take a position on any issue until the latest polls are in.

Let us say that we have opened the space craft and observed the particle to have a spin of Y. Like flipping a coin, the chances that the particle will assume a spin of Y is exactly 50%. We now find a live, fluffy kitty vehemently asking for more Meow Mix by name. We know that the particle did not assume the Y spin until observed and, thus, the kittens fate was not decided until the actual observation, exactly the same as its hapless mother.

Remembering the law of conservation of energy, as soon as we observe the particle of kitty one, the particle of kitty two must then, immediately, assume the history of a particle of spin X. The crucial distinction here is the each particle assumes a particular history only after the act of observation. Kitty one, was always alive, as kitty two was always dead, but until the observation, neither kitten was alive or dead. They existed in a juxtaposed position of life and death. If we could travel back in time and repeat this observation, again and again, for a hundred times, we would find 50 live kittens and 50 dead as a doornail kitties.

When we discover kitty one to be alive, and knowing that the second particle must assume an opposite history, we can only conclude thatK2 was immediately killed only upon the observation of K1. How can this be? The kitties are now 1 light year apart! Relativity tells us that nothing travels faster that the speed of light and that for a photon of light, time stands still and has no meaning. Yet as soon as we observe our kitten to be alive or dead, K2 must immediately, without the slightest pause, assume the opposite. The important thing to keep in mind, is that once a history is assumed, it has always been that way. If K1 is alive, K2 has always been dead although this history was not chosen until we observed the results.

Einstein called this instantaneous transfer of information "spooky action at a distance" and was one of the primary reasons that he rejected quantum theory for most of his life, even thought he was instrumental in its discovery. The accepted term today is "non locality" or, as some prefer, poppycock.

This very oversimplified explanation of the "sum over histories" has been made to offer consolation to all those despairing to gold market today. Content yourselves to know that, while gold is in the doldrums here, in another history, gold is soaring.

Ron, I had but one tenth the punch lines in you own treatment of this subject, but this is pretty dry stuff. I enjoyed your writing tremendously. For those of you bored to tears by this post, realize, that in another history, I spent the last several hundred words extolling the virtues and imminent rise of gold.

(Thu Jul 03 1997 02:40)
John & RJ : You guys are so cute playing your little games. Do you have
docoder rings also? Have you tried your games over at the 2600
group. They would love your little games - oh yea, they have some fun
games of thier own you could play. Make sure you warn them that you
work in a government agency and you have close contacts with enforcement
personal. It will really impress them.

Short Bull: Welcome to PL - I also purchased some today. The Japanese
market can be found in Kitco link list. It ends with .jp.

(Thu Jul 03 1997 02:48)
when sharpening ones' battle axe, it is best, to test
it upon, rotting wood. nothing lost, only an edge gained.

imo---wtfay? stfu!

(Thu Jul 03 1997 02:56)
Kuston @ 05:21 - I did not read you post until a few minutes ago. You have given me much to think about. You have cut to the heart of the argument and your words demand consideration. Yours is the finest response I have read and, which open avenues of thought, that previously remained in the dark. I would like to respond, but only with the fullness of time

(Thu Jul 03 1997 03:03)
Kuston @ 02:40
Kuston - Per my 00:36, I have opted out of that game. I can only keep up these shenanigans for a short time and then I become bored. I apologize to all who have suffered through this unnecessary clutter.

(Thu Jul 03 1997 03:21)
Cover the GOLD
Speed @ 17:07 - I covered some at 334 will cover the rest at 330 tomorrow. Yes, I look for a bounce of 6 - 10 to re-short. I agree with the 300 - 325 estimates short term. I have been in these markets too long to think it will happen in a strait line. I will probably cover at whatever I get tomorrow, Ill expect a bounce on Monday. I will sell at anything above 340

(Thu Jul 03 1997 03:24)

Subject: CheroCREEP

You hit the nail on the head. Cherokee is a Cherocreep!!! He is the definition of a COMPLETE IDIOT!!!

What do you get when you breed a complete moron with maniac!!! Let me give you a hint: He is a person ( probably a woman ) who makes moronic posts and goes by the idiotic name... you guessed it.. of CHEROKEE.

Cherokee, do us all a favor and especially yourself, perform a Kervorkian maneuver on yourself. You're a miserable creature, so put you and your flux bs out of misery!!!

(Thu Jul 03 1997 03:30)
Hey Cherocreep@over the edge:

You loonytoons mf!

I'm gonna byfbi!! You understand?

You fahmf!!!

(Thu Jul 03 1997 03:38)
RJ 2:48 : I look forward to your thoughts on the "new era". My eyes
are clouded I know, but I still think I can see more than most. Only
because I have a very very different view then most. I bring this up
because I would like to see through different eyes and from a different
angle. You can express your views very well when you try - I await.
I would also welcome any other eyes and angles - if you will share them.

Who Cares?
(Thu Jul 03 1997 03:41)
Kuston, re: "New Era"

It's late, I'm not in a arguing mood.

#1 - Oh, ye of little history. The world has indeed seen
similar periods. Reference "Industrial Revolution",
massive changes in communication, transportation,
manufacturing after the Civil War.

#2 - What will happen to the other 90%? The same thing
that happened during the latter 1800s and the 1930s -

a reduced work week, in the area of 15-20%.

So that a reduced work week might be accomplished without
sacrifice or instability, land prices will fall in the
area of 50% or so.

Lower work week = more time to spend on education =
return to equality in the work force.

#3 - Return to gold standard, or a de facto substitute.

(Thu Jul 03 1997 03:49)
The Ted and Andy Show

Maybe I see things differently than the people here, but:
I think that Ted Arnold's of MLPF&S has the assignment to keep investors out of gold and gold shares, so that whatever money that goes into the investment arena will find its way into the financials.
As for Andy Smith, his real purpose at UBS is to steer such funds into foreign bonds, stocks and currencies.

I think that the fear at MLPF&S and UBS is that gold can take a big chunk of their main business.
Thus we have "The Ted and Andy Show".

Government also have to have an upper hand; and thus, tend to play with economic statistics to keep the populace happy.

These are "The Unholy Alliance".

Gold should be much higher on demand and cost of production alone, this is without taking any consideration of its safe value. But is it higher?

(Thu Jul 03 1997 04:45)
2WEEKS: I like your analytical method. Do the same thing with the possibility of stocks continuing to rise and see what you get. The net was soooo slow last night, 260M American billionaires checking the new worth of their portfolios, that I dropped of early.

Occams Razor
(Thu Jul 03 1997 05:08)
@infected with hepC
Which cat? Where? Who said that? A kitten can have a combination of position and velocity. However whether it is a kitten or not depends
upon which semi-trailer you drive over it.


Friend of Cherokee
(Thu Jul 03 1997 06:25)
Yes, he does have one! Hey you guys. Come on now. Give Cherokee a break. He's not that bad. At times she is sort of an idiot, and I agree that her handle is a bit corny, but heck, what the hey. She's at the razors edge. Isnt that too cool! She is one sharp cookie. No I did not call her a KOOKie! She trys real hard to impress us with her wit and charm. Don't you just love it. Hey, let's forget about learning anything here or discussing interesting things. We have CHEROKEE to entertain us! She is really a cool dudette! Besides, she is above all the nonsense of name calling and petty bickering. She is my kind of woman.

(Thu Jul 03 1997 06:30)

Short Bull
(Thu Jul 03 1997 06:33)
looking@the charts
I bought Platinum, in hopes we would get a bounce in gold and silver
to sell against in the next few days. Looking at August gold's chart
I notice August gold bottomed at 352, later built a nice base at 342,
and now it has stalled at 332. Yes, 332 should be no different, we
should get some basing here for at least a bounce.

(Thu Jul 03 1997 06:50)
2weeks: Looks like you are right. Metals are heading up in what is probably short covering. I still like the "corner the market" conspiracy theories. : )

RJ: Thanks for the response. Your opinions are valued. Try not to step in anything late at night here. Bart's going to have to invest in kitty litter, lysol and a good mop, or throw the cat out.

Donald: The net was slow from Houston also, plus I get kicked off by my kids as we time share one pc. Who's your ISP?

Mike Sheller
(Thu Jul 03 1997 06:57)
are you there Johnny Addie?
Warm, butterdripping popcorn in hand, I slide my way along the second row. A tall blonde, in a pink, tightfitting suit, veiled black hat, and skirt slit just a bit too high up her black stockinged thigh, glances at me from the corner of her eye as she lights a cigarette. I brush by a portly lawyer as he leans back toward someone in the row behind him, a hand cupped to the side of his mouth as he shouts a joke over the crowd noise. I pass a man with a calculator in his lap, frantically comparing numbers, figures dancing in his brain, before the opening bell. I hear the muttering of a gnome-like, wizened frenchman, his beret slouched past one eye, his thumbs twiddling wildly as he speaks, his words in heavily accented english come home in a riveting flash of light, belieing an illusorily clownish demeanor. At last my empty seat. I take it, and face the ring. It's time to GET READY TO RRRRUUUMMMMMBLLLEEE!
I have a ringside seat at Kitco, and the bites are about to begin! Man, it don' get any bedda dan dis!!!

Mike Sheller
(Thu Jul 03 1997 07:05)
please stop me before I post again...
RJ: I take exception to your 23:54. Just what is wrong with cheap gin and a $3 whore? I say $2.50 before $3.75! What's that Pepi? Oh, yes, Pepi liked the "dog urine" part. I myself would NEVER pay $12 for a tie. I may be an astrologer, but I think I can also be a value investor. A very graphic artist, you. Is this what Glenn has been trying to tell us all along? Maybe you're wasting your time and talent trading precious metals. The BIG money is in poetry, you know. Speaking of astrology, it's time to explore my exogenous zones. Thank for the gratuitous buxom. Sometimes a fella needs a friend.

(Thu Jul 03 1997 07:26)
Lease Rates
You mentioned that the gold lease rates are rising. Kitco posts 1, 3, 6 and 12 month rates. While all are rising, is there any one of these time periods that you watch more closely?

(Thu Jul 03 1997 07:37)
SPEED: There it is.
NAILZ: I am with you on the "no need for a big event" theory. An event could certainly do it for us goldbugs but the Bull Market in stocks doesn't need an event to end. When the public gets in, as they are now, it can end just like the hula-hoop, or the flapper craze, or the Duck-Ass haircut, if you are old enough to remember any of that stuff. Gold is the 6000 year old fad that won't go away any time soon.

(Thu Jul 03 1997 07:40)
@....Tokyo Bay spill is one-tenth of original estimate
Oh Well...just when I thought we had an "exogenous" factor brewing in Japan the truth was disclosed.


George Cole
(Thu Jul 03 1997 07:49)
ALL: Still seems to be that an exogenous shock -- most likely a big drop in the stock market -- will be needed to trigger a new secular bull market in gold. We could have a powerful short-covering rally at any time. But without serious investor demand any such rally will be short-lived; pun intended.

Ted Butler: Correct me if I'm wrong but isn't the shorting capacity of the hedge funds ultimately determined by the CBs? They can short as much as the CBs will lend them, but not more. And who knows how much the CBs are willing to lend? Could rising lease rates reflect some reluctance by the CBs to continue shoveling out dirt cheap gold loans.

(Thu Jul 03 1997 07:52)
The exogenous factor will be little old lady with a new [:- ( ]fifty Dollar bill asking, "How much gold can I get for this?" Where upon, the shorts, hearing that there is demand for gold, will panic. Their rush to cover their short positions will cause the new bull market in gold. :- ) )

(Thu Jul 03 1997 08:02)
@DFW Airport
Refering to last nights continuous senseless dialog with hepcat,
dont you Kitco regulars realize that
"silence is the perfect expression of scorn" ???

George S. Cole
(Thu Jul 03 1997 08:05)
silence is golden
URIS: There is much wisdom in your words. I, for one, am on the same wavelength.

Mike Sheller
(Thu Jul 03 1997 08:16)
Exogenously speaking
A market collapse will not necessarily bring gold back to life. The '87 crash didn't. Gold was rising BEFORE the market topped and dived. Look back at your charts guys n' gals. Almost EVERY bull move in metals begins just prior to a market top. The ultimate cycle lows for gold & silver bullion come in BEFORE stocks top out. The metals are rising AS stox top, and very often peak even before stocks do, unless we're talking major asset inversion ( which WILL come in the next few years ) . But in ANY case, the precious bottom and turn BEFORE stox top. If the metals are not in an EARLY rising trend from a valid base if and when a market slump occurs ( and I don't see anything as rapid as '87 ) then they will get kicked along with stocks. In '87 the metals had topped along with stocks, so they did hardly anything when the crash occurred. All the gold & silver action was PRE CRASH. There has to be a natural transfer of momentum to the metals first before stocks give a sign of topping. While I personally get bearish on stocks every time I look at the Dow, I am still long shares ( other than mining ) because the jury is still out on whether bonds have one more bounce in them, and the metal markets have not exhibited end cycle strength. Call me old fashioned.

(Thu Jul 03 1997 08:36)

I generally watch the one month rate and the one year rate. An interesting pattern that I have noticed, although by no means foolproof, is that rallies tend to occur when the one month forward rate ( libor - lease rate ) is less than the one year forward rate. I have not tested this in a rigorous fashion but have eyeballed it on Bart's historical data. I can not give any good reason for why this should be so. We are at the moment in this happy state of affairs. We shall see.

Should the physical market ever tighten significantly or interest rates collapse below the lease rate ( like Japan, and I believe Switzerland at the moment ) it would encourage buying forward gold as it would have a positive yield.

(Thu Jul 03 1997 08:50)
I agree with Mike Sheller's recent post that gold stocks would also fall if market tanked...ALL SHIPS FALL IN A LOWERING TIDE...However, I
do believe that if the market tanked and gold fell along with it, gold
would bounce back much more quickly than most other stocks.

(Thu Jul 03 1997 08:57)
@cold wind passes in the night
Gold up 1.70. I'll keep reading Laura Day and try and some vibes George
Soros's way. Good Morning all.

(Thu Jul 03 1997 09:03)
All ( IMO ) :Why don't we all put our real e-mail address on the posts so we can send messages directly. ( I think an occaisional imposter is amusing - like Mike Tyson, Rodney King, Dr. K - and shouldn't be taken seriously )

John HepCat: Maybe you shouldn't use Government Resources ( i.e., Computers/Networks/phone lines etc. ) for your posts. That may be interpreted as Fraud Waste and Abuse by some U.S. taxpayers. Except for gold-bugs and egos, there are no diseases here at KITCO. : - )

George S. Cole
(Thu Jul 03 1997 09:13)
gold and the stock market
Mike Sheller: The current situation re: gold and stocks is radically different than 1997. Gold and gold stocks had soared along with the market in 1987; this is the exact opposite of the 1996-97 trend. Gold is MUCH cheaper today relative to stocks than it was in 1987. Dow was just 6 times the bullion price in 1987; it sells at 23 times the bullion price today.

Contrary to 1987, a big break in the stock market would be the best possible scenario for gold bullion and by extension for gold shares.

We will soon find out who is correct on this question.

(Thu Jul 03 1997 09:16)
Jobs report out, T-Bonds rallying up a point. How much more good news can there be?

(Thu Jul 03 1997 09:17)
Amnesty: And listen to some Ray Lynch. It's good for the nerves.

(Thu Jul 03 1997 09:24)
MIKE SHELLER & GEORGE S. COLE: I think if you make Gold-Dow comparisons at the per ounce ratio you get an easier picture to understand. Investments of differing types compete with each other for cash dollars. Inflation confuses the real value of the cash dollars so the per ounce way gives it some semblance of a reality check. Nothing is perfect though.

Found on the Net: Fraud Hotline!
(Thu Jul 03 1997 09:25)

The General Accounting Office maintains FraudNET to facilitate reporting of allegations of fraud, waste, abuse, or mismanagement of federal funds and resources.

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(Thu Jul 03 1997 09:45)
Gold vs Stocks

Mike Sheller and George Cole : You may both be correct.

IMHO, if the stockmarket crashed next week then money would flow to gold. Gold stocks, which would initially drop in sympathy with the overall market, would make a swift recovery. The situation would be very different than 1987.

BUT, what if the stockmarket bull has a few years left in it ? After a decent correction ( say 30% ) in 1997, during which gold accrues only minimal benefit, the market continues onward and upward into the year 2003 ( for example ) . Gold begins its long awaited rally in Q1 1998 and also continues to move up into 2003.

By 2003, we have the Dow at 15,000 and gold at $2,500 ( that is, a ratio of 6 to 1 ) . Gold shares would obviously be VERY expensive at this time, even relative to the high bullion price. If the market then crashed, gold shares would be the hardest hit.

There are obviously an infinite number of hypothetical scenarios, but my main point is that it may be premature to pronounce the current stockmarket bull as terminally ill. After a few sneezes at some stage during the next 3 months it could very well make a full recovery, stronger and even more determined to baffle, allowing the Mike Sheller 1987 plot to develop.

TTFN, Milhouse ( in memory of Front )

(Thu Jul 03 1997 09:51)
The BIG question that should be concerning gold investors ( as opposed to traders ) is whether gold is being reduced to a commodity which trades a bit above production costs or whether this is just another dip. Regardless of the cause, be it CB conspiracies or the gradual abandonment of gold as a part of the financial life of the planet, the important question is: is gold being demonitarized as happened to silver last century.

Enthusiastic comments about this being the last blow off before the phoenix like rise are based on a big assumption that needs to be examined Does the world need gold as a store of value anymore? Trotting out the old chestnuts about paper is just paper etc won't do it. An analysis of why gold is needed is required.

(Thu Jul 03 1997 09:52)

RJ - I'm extremely impressed at your ability to type ! Your recent treatise on juxtaposed feline histories would have taken me at least half a day to construct, even with both typing digits working at full speed. You are indeed in the envious position of having alternative career possibilities if the markets go against you ! ( :- ) )
Regards, Milhouse

George S. Cole
(Thu Jul 03 1997 10:06)
stocks amd gold
MILHOUSE: You could be right about the stock market surging to new highs following a stiff 1997 correction. I for one do not pretend to know how fast the market will recover after the inevitable break. Best to be on the sidelines waiting fore the dust to settle. The outcomes could range anywhere from the Steve Puetz superbear to your 15,000 2003 target.

But if you are right about the Dow surging again after a 30% correction, I find it hard to envision gold going to $2,500 or even $1000 for that matter.

(Thu Jul 03 1997 10:24)
Why Gold ??

Fundy - I don't know what better reason you need than the old chestnut "paper is just paper". Gold is a store of value simply because billions of people throughout the world consider it to be so. Although gold has lost much prestige in the West, it has never been more sought after in Asia. Ask any citizen of India or China what they would prefer - an ounce of gold or the equivalent amount of their national currency and you will be surprised how popular gold is.

Paper currencies come and go because their strength inevitably rests on the integrity and the whims of politicians. Gold cannot be arbitrarily created by governments to suit their political agendas.

Gold will once again shine brightly. Whether it is a good investment at the moment, your guess is as good as mine.

Regards, Milhouse

(Thu Jul 03 1997 10:24)
RJ @12:40: Awesome! Somewhere in another history, Feynman is grinning.

itsy bitsy trader
(Thu Jul 03 1997 10:25)
@water spout
Phew! ( the gold is there ) .

Maybe all the short sellers who were calling for another BRE-X will have
to cover. One down ( BGO/AZS ) and one to go ( KRY ) .


Bema Gold Corporation, Arizona Star Resource Corp. -
Joint News Release

Strong Economics Indicated by Scoping Study on Cerro Casale Project,
Aldebaran Property, Chile

51% Arizona Star Resource Corp. / 49% Bema Gold Corporation

VANCOUVER, British Columbia, July 3 /PRNewswire/ -- Bema Gold Corporation
( AMEX:BGO ) ( ``Bema'' or the ``Company'' ) and Arizona Star Resource Corp. ( ``Arizona Star'' or
the ``Company'' ) are pleased to announce the following update on the Cerro Casale project,
Aldebaran property in Northern Chile.

Engineering Scoping Study

The Companies have received an engineering scoping study on the Cerro Casale deposit
completed by Mineral Resource Development, Inc. ( ``M.R.D.I.'' ) an independent consulting
engineering firm. The study confirms Cerro Casale is an economically strong project and
recommends that the Companies proceed to a prefeasibility study.

The primary objective of this initial study was to determine the optimum mining and recovery
process to develop the Cerro Casale project. The scoping study concludes that the best
development scenario for Cerro Casale is a large scale open pit gold copper mine utilizing
standard grinding and flotation techniques to produce a gold rich copper concentrate. While the
oxide portion of the deposit ( approximately 90 million tonnes ) is amenable to heap leaching and
carbon in leach recovery processes, the study results indicate the mixing of oxide and sulphides for
flotation is the optimum alternative that simplifies both mining and processing. Cyanide leaching of
the flotation cleaner tails also enhances project economics by increasing gold production.

The study assumes the copper gold concentrate in slurry form is transported by pipeline to the
Chilean coast and shipped to a smelter for final processing.

The scoping study was based on a geological resource estimate made by M.R.D.I. as previously
released on May 15, 1997. The resource estimate was based on 214 reverse drill holes and 73
deep diamond drill holes. The Casale deposit remains open to the south. ( See drill results later in
this release ) .

Metallurgically, the scoping study utilized results from extensive flotation and cyanidation tests
conducted on selected samples of oxide and sulphide ores from the Casale deposit. This testing
has now been carried out to the prefeasibility level.

The scoping study identifies two different throughput scenarios to be further examined as
alternatives for the prefeasibility study. Case one assumes mining and processing 135,000 tonnes
of ore per day yielding in excess of 845,000 ounces of gold and 260 million pounds of copper per
year over a 19.5 year mine life. Case two assumes 180,000 tonnes of ore are mined and
processed per day at a coarser crush yielding over 1 million ounces of gold per year and 320
million pounds of copper over a 15 year mine life.

The second objective of the study, was to indicate the potential economics of the project. Results
from the study indicate that in both cases the project economics are robust. By applying gross
revenue from copper production at US$1.00 per pound against cash operating costs, the on site
operating costs plus initial capital cost per ounce of gold produced, in both cases is approximately
US$100.00. Similarly in both cases the total operating costs including transportation, smelter and
refining charges plus total capital cost is approximately US$200.00 per ounce of gold produced.

Based on the positive results of the scoping study the Companies have commissioned M.R.D.I. to
complete a prefeasibility study which will refine and optimize capital and operating cost estimates.
Management believes there is the potential for significant reductions in both operating and capital
costs. A detailed geologic resource estimate is currently being updated as the basis for optimizing
the mineable resource which will be utilized in the prefeasibility study. The prefeasibility study is
scheduled to be completed during the fourth quarter 1997.

Casale Drill Results

A total of 83 deep diamond drill holes have now been completed at Cerro Casale. The deposit
remains open to the south. Drill hole 77 was a 250 meter step-out further to the south drilled at a
-67 degree angle to the north and returned 408 meters grading 1.36 grams per tonne gold and
0.26% copper from 462 to 870 meters. This hole intersects the southern shoulder of the Casale
deposit at the southern edge of the resource model. The deposit remains open to the south
indicating the potential for a further resource increase. Hole 77 results were not available and
therefore not included in M.R.D.I.'s updated geological resource released May 15, 1997.

Currently holes 87 and 88 are being completed. Hole 88 is a further step-out south of Hole 77.
Upon completion of these holes, a break in drilling is scheduled for approximately 4 weeks.

Clive T. Johnson Roger T. Richer
C.E.O., Chairman & President President

The Vancouver and Toronto Stock Exchanges neither approve nor disapprove the information
contained in this News Release. Bema Gold Corporation trades on the Vancouver, Toronto and
American stock exchanges. Symbol: BGO. Arizona Star Resource Corp. Trades on the
Vancouver Stock Exchange. Symbol: AZS.

(Thu Jul 03 1997 10:26)
RJ: Make that at 02:35.

(Thu Jul 03 1997 10:37)
Millhouse: Thanks for your reply. I have no doubt that the Asians and Indians are by far the greatest believers in gold and in many other ideas that have long since left the western world. Going back to the argument that was present here a couple of months ago 850 gold is now a nominal 335 and in corrected dollars about 100. The store of value idea is currently dead. The purchasers of gold anytime in the last 17-18 years will tell you that gold as a store of value is not a valid concept for their lifetime. What is needed is some reason to need gold on a daily basis the store of value idea is not a reason to buy it as can be seen on an hourly basis at the moment.

(Thu Jul 03 1997 10:46)
General questions/comments:

My recent experience is that gold tanks when Wall Street corrects ( and as it has gone up ) . What would be the general lag time that it would take gold to go up after a BIG market correction? I would think that it takes several weeks/months to pan out because the stocks, mutuals players seem to be more 'long term committed", dollar cost averaging, buying on the dip, etc. The sentiment I saw after the '87 bloodbath was "if I'd only stayed in, not liquidated, bought low, added to my position, yada, yada, yada" and seems very prevalent today. It would take a while for them to realize that it was a long term correction ( "bubble burst"? ) before they committed to something else ( gold ? ) And then - why gold? Foriegn stocks did rather well after '87 - would that potentailly be the case here?

With the injection of more foriegn monies in the markets ( and it looks like a lot more in the future ) , won't this prolong the bullish DOW & DJIA? And continue to pound gold into the dirt?

Also, I read here at KITCO that the dollar is losing ground. Everything I see, however, with the Deutsch Mark & Swiss Frank is that they are falling. Am I missing something?

Any insight would be appreciated.

(Thu Jul 03 1997 10:59)

Seems like the central bank of Australia has dumped 2/3's of their gold reserves over the last 6 months. They could find no value in owning gold. I wonder if they have diversified into S&P's like Christy Whitman.
Now there's value.

red neck
(Thu Jul 03 1997 10:59)
Jes got back up from da holler. Me and the sheriff been tended
our still fixins.
Got myself tick bit. "Gol-dang,"
dem dare ticks isa jus as bad as a gold bug" I thought as I
was heating up the bug's behind with a hot match to make
him back off. Noth'n short of smoke and fire will make a
true gold bug back off. The critter keeps digging in deeper.

(Thu Jul 03 1997 11:04)
WW: You mean that finally I can be classified as a minority? ( Goldbug ) Does that mean that I can now get preferential treatment and all of the associated perks that go along with it? This victim demands recourse immediately!

Just a guess ( IMO ( @Honolulu Office ) ) could this be Mr Schultz?

Johnny Boy ( HepCat@Cut,Burn&Poison ) is that you I see peaking out between the legs of your uncle? Don't look up, he might want a favor...By the way, for a good read pick up a copy of "Unintended Consequences".

(Thu Jul 03 1997 11:18)

Last night I related a conversation that I had with our overnight metals desk. I was told that there were no, as in zero buy orders on the gold books. Today I clipped a quote out of a wire story detailing the perfection of our economic condition. It was made by Michael Metz, who used to be a staunch bear on both stocks and bonds.

"The data couldn't be better. It was in line with expectations and the details were good," said Michael Metz, chief investment strategist at Oppenheimer & Co.

"On the whole, it looks like the apparent momentum for wages has slowed, which is exactly what the market was looking for. All of the sellers are out of the market," he said.

(Thu Jul 03 1997 11:21)
on Gold Bear
Ted Arnold of Merrill Lynch thinks that there is too much gold on the market and that the price could go down to $250 in the next two years.
I am sure few people on this Site will be surprised by Ted's forecast!

(Thu Jul 03 1997 11:21)
D.A. -- Let's see if I understand this, paraphrasing; "In case of 'emergency' we'll just nationalize the mines! There, that's are gold reserves."

(Thu Jul 03 1997 11:27)

This would seem to put a cap on the upside to Australian mining shares.

(Thu Jul 03 1997 11:29)
Why Not Gold ?

Fundy, your sentiments reflect the abject pessimism which is always seen at the depths of a bear market. In real terms, gold is the cheapest it has been since the early 1970s. Certainly, anyone who has bought gold since 1979 would have seen their gold lose purchasing power. Therefore, during this period it has not been a satisfactory store of value ( note that it is unfair to compare 1980 and 1997 because you are comparing a major cyclical high with a major cyclical low ) . One reason for this is that for most of the last 17 years the rate of increase in US money supply has been trending lower. This situation has reversed and the last 4 years have seen increasing rates of money supply growth. If this trend continues, higher prices of gold will result. However, there are certainly no guarantees where the future is concerned.

Regards, Milhouse

BTW, this is my 4th post today, a new all-time high. And Puetz reckons we don't have inflation !!

(Thu Jul 03 1997 11:35)
The 1998 budget will call for spending little changed from 1997 levels, and the federal deficit will fall back
below the level of government investment, in line with the constitutional requirement, the source said.

Another news clipping about the German budget. Bondholders beware.

Waigel won Transport Minister Matthias Wissmann's approval for a plan to suspend repayment of old railway debt in 1998, saving 2.8 billion marks, and repay only 300 million marks the next year.

(Thu Jul 03 1997 11:35)
Leftists won France & increasing evidence of left winning next German elections portend negative implications for Euro. Gold is only reasonable alternative to Euro. See Orpailleur of France insights:

Richard Burke
(Thu Jul 03 1997 11:41)
Anyone know what happened to Deaner since July 1 ( his last analysis at his home site ) ? Did he leave a post here that I missed? Is he on holiday after he says "go for it". I am still on the sidelines wating for more confirmation.

(Thu Jul 03 1997 11:49)
R. Burke:
A couple of days ago I went to Deaner website and found a message that he was moving to a new URL. User names and passwords were going to be required. I haven't checked it out. I suggest use one of the search services to find him.

(Thu Jul 03 1997 11:50)
A ho-hum precious metals day, IMHO, but a good day at the Kitco chat, because: several good posts that get to what I believe are central issues. No. 1 is the "Gold as a store of value" issue. I see a major problem: once gold truly loses its cachet, will it ever regain it? The day gold is finally deposed as the trump card of economic resource, it may be replaced by something else ( what? good question ) , and then it surrenders and flees in shame, sinking forever to near the level of its practical worth. Certainly the jewelry value of gold is largely held up by its perceived store-of-value significance.

This truly disastrous scenario for gold has to be considered. In the fun-with-statistics vein, say, a 10-15% chance that this will happen, with a lot of geologists going back to school to learn C++.

The point is, every day that goes by, as CBs such as Australia's retreat from gold ( great post! ) , spot prices slide, and gold stocks slip, the odds rise that Teetering Rock will one day fall on the wrong side of the gold war. So, at some level, gold is fighting for its life as the ( if not a ) store of value in the world economic system.

Continuing, then, to respond to the question of what will become king-of-the-hill after gold, it may be bits and bytes, i.e., a juggernaut of public fanaticism and a deepened confidence with respect to the world's digital system of commerce and recordkeeping. When John Smith in Peoria comes home from work, he lolls in his BarcLounger with the deep satisfaction that comes from having run his hands over the last quarterly report detailing his rising holdings in his pension fund.

The bit&byte ( B&B ) could already be deemed to rule supreme, friends. Once Wi Liu Cheng, Shava Npanda, and cohorts are all online and getting their quarterlies, they may not want any more necklaces or brooches, much less a small sack of retirement fund buried deep next to the banyan tree.

George Cole
(Thu Jul 03 1997 11:59)
Wonder how many shorts knew about this in advance?

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[ Business - Company - Industry - Finance - PR Newswire - Business Wire - Quotes ]

Thursday July 3 11:12 AM EDT

Ldn gold fixes barely up on Australian sales news

LONDON, July 3 ( Reuter ) - The gold price fixed a touch above its morning level on Thursday minutes after the Reserve Bank of
Australia confirmed it had sold 167 tonnes of gold from its reserves.

Bullion fixed at $332.55 per ounce, 25 cents above the morning level and continuing a mild recovery from a new 4-1/4 year low
of $331.45 plumbed on Wednesday morning.

``This ought to be bullish given that the market is so short,'' one dealer said of the Australian news, but he added that alternative
interpretation was that another central bank sale could be waiting in the wings.

The Australian announcement said the sale reduced gold reserves to 80 tonnes from 247 tonnes and that 125 tonnes of metal were
delivered last month. The rest was scheduled for delivery in August and September.

``We're not surprised by the sale but we all thought it would be a European central bank,'' one dealer said.

``Its strange that one of their main exports is gold,'' the dealer added.

Australia was the world's third largest gold producer after South Africa and the United States last year producing 289 tonnes,
according to Gold Fields Mineral Services.

Gold prices have been under pressure for a year but that has intensified recently on rumours of cental banks sales and forward
selling from producers -- especially in Australia -- flattening any attempt at a rally.

The gloomy mood has provoked speculative investment funds into taking positions assuming the price will fall further and
scaring potential investors into the stock and bond markets.

``It is steadier today but it is still heading towards $325/$326,'' a dealer said referring to gold's 1993 low.

The New York markets close early tonight ahead of their Independence Day holiday on Friday.

``We may see some book squaring ahead of the U.S. holidey which would give the market some breathing space,'' another
dealer said.

The other precious metals were extremely quiet with silver barely moved all day. It was indicated at $4.63/$4.65 down two

Platinum was unchanged at $423.00/$426.00 and its sister metal palladium was a dollar firmer at $191.00/$194.00.

More news for related categories: stock capsules, international.


Copyright  1997 Reuters Limited. All rights reserved. Republication or redistribution of Reuters content is expressly prohibited without the prior
written consent of Reuters. Reuters shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon
Important Disclaimers and Legal Information
Questions or Comments?

Bob A
(Thu Jul 03 1997 11:59)
to D.A.
Is M. Metz bullish on gold? He was at one point buying H.M.

Bob A
(Thu Jul 03 1997 11:59)
to D.A.
Is M. Metz bullish on gold? He was at one point buying H.M.

George Cole
(Thu Jul 03 1997 12:01)

A few weeks ago Metz looked like he was ready to throw in the towel re: gold. I suspect has has done so by now.

Bob A
(Thu Jul 03 1997 12:08)
to George Cole
Thanks, he was on the business news about a month ago and was sure we were in for inflation.

(Thu Jul 03 1997 12:11)
Did the Australian dollar react on that news?

(Thu Jul 03 1997 12:18)

Last I looked the AD was up about 10 ticks vs US$ and down .8% vs JY

(Thu Jul 03 1997 12:19)
@Please...stop and be civil.
After a bit of "downtime" I was able to read posts...and I was flabbergasted. I like to play too ( probably more than the next ) but what I read didn't seem like play. I am very new to this group and I do not know the history but this should not be how we treat each other. Let us act like the educated people that we all seem to be.

I now realize that I need a break from I will turn OFF ( did I just say this??? ) the computer and Celebrate for FOUR days the emancipation of Taxation without Representation. And I WILL use wine, beer, margaritas, duplicituos fornication, etc. to achieve my goals.



and please...don't post anything brilliant for 4 days...Tort? I can wait for a good golf joke??? Buddy?

(Thu Jul 03 1997 12:19)
Anyone want to check the current gold spot. I'm not going to tell you, you can have that pleasure yourself!!!!!!!!!!!!!!!!

George Cole
(Thu Jul 03 1997 12:23)
Captain Bill: Would be most interested in your take on the Australian gold sales and the FOMC decision to stand pat.

(Thu Jul 03 1997 12:27)
Whose interest is served in disrupting a bulletin board with arguments? I wonder? It sounds like a CIA plot!

(Thu Jul 03 1997 12:32)
and one more thing...I promise
2weeks ( good days bad days ) -
Finally, something to ponder over my time off. Thank you for the well done piece.

My knee-jerk reaction is that gold will always have value and the US CB will never sell there supply - because they know better. Gold will hold it's value but you are right that bits & byte will one day rule OUR world/universe.

Thanks 2weeks.

...and to all jerking knees...

AWAY...for good


(Thu Jul 03 1997 12:37)
DA: Your 11:18 post has the stuff that will make history - no buys for gold and no sellers of stocks. A moment of poetic perfection. This "moment" may extend for a period of time but I am sure that it will go down in history as one of the classic inflextion points in the history of markets.


(Thu Jul 03 1997 12:43)
Massive Central Bank Selling of gold; Massive propoganda campaign against gold--gold holding up well;no knockout punch given--Watch for Robert Rubin to bite Alan Greenspan on the ear.

(Thu Jul 03 1997 12:50)
Re: Australia...whenever I hear this stuff my initial reaction is despair, but...history shows that gold flows from weak hands to strong hands. We need to figure out who the buyers or single buyer was. Mabye the swap was for Hashimoto Treasuries. The Golden Rule still applies: "He who has the gold makes the rules". If you told me that they were taking the alcohol out of the Foster's I would really be worried.

(Thu Jul 03 1997 13:05)
Speed: Thank you; I`m posting very rarely, have problems with my english ( makes some work to write those posts with the dictinary, reading goes easier ) .

Kuston: Thanks for the information about Oldman; sure, I made my own conclusions, but I`m often wrong and I`ve learned much from Oldman`s posts, so I miss them.

DAX now at 3940, maybe 4000 this week. In Germany people is really euphoric, no reaction on bad news, jumps on good news; Gold: no reaction on good news, tanking on bad news. I think gold is oversold, maybe a 5$-rally in Juli, more is not likely next time.
D.A. be careful, you will lose this ounce; I would put not one more Mark in before a bottom is seen.

George Cole
(Thu Jul 03 1997 13:08)
cancelling the insurance
All: For CBs, gold should function as a kind of insurance policy against unanticipated disasters. Current CB gold sales activity can be compared to a homeowner deciding to cancel his homeowners's policy after many years because he has never had any problems. Now he doesn't have to pay the premiums and his spendable income is higher. But heaven help him if his home catches fire.

Ditto for investor gold demand. After many years of booming markets and increasing big business dominance of the political spectrum, capital has never been more arrogant and confidant. No need for gold under these conditions. Just sits there, declines in price, and doesn't earn interest. But when this confidence is shaken .....

(Thu Jul 03 1997 13:08)
The Wall And The Writing On It
If there is any merit to Ted Butler's concerns about gold and silver loans never being repaid expect to see a lot more announcements of "sales" by second tier CB's as they face reality that the gold they loaned out is not comming back.

That is, a lot of CB sales may really defaults of gold loans in disguise.

Secondly - if you believe the news - there has been considerable forward selling by Austrailian mines recently and by SA mines a bit earlier. At the same time gold has held above it's lows. The "spin" ( of course ) is that there is enormous "selling pressure" on gold due to obsolescence and the emergence of a new era of bliss and enlightenment.

The reality is that there is enormous - and very diciplined - BUYING pressure. The fact that the buyers have been able to absorb the quatities of gold now being sold while maintaining a flat to down market indicates sophisticated and very capable accumualtion.

Sophisticated even to the point of playing along with all the CB propoganda and the extreme bearishness now present. All the better to get a valued asset at a bargain price!! I wonder how many "bearish" reports have been planted, encouraged, suggested by those who are interested in accumulation. Smart money is not called smart for nothing.

Those whom the gods would destroy are first made mad with publicity.

It is classic market theory that when prices are flat in the face of high volumes that "distribution" or "accumulation" occurs. It is written that in a down ( bear ) market when prices remain flat in the face of high volumes ( open intrests ) that "accumulation" by "strong hands" from "weak hands" is taking place.

We are not necessarily witnessing a debacle in gold. We may witnessing the work of the "smart money", the "strong money", the "strong hands", the "informed money" of market mythology.


(Thu Jul 03 1997 13:11)
EBN @ 327.85. I'm thinking this will be a spike bottom before the close. Otherwise, I think US shorts will have a very nervous 4th of July.

Mike Sheller
(Thu Jul 03 1997 13:12)
@the Big Wave
FUNDY: If the "demonitization of silver in the last century" is any indication, then based on some of those magnificent silver spikes of the last 3 decades, I say SHOW ME DEMONI. Sometimes the answer is very simple. Paper IS paper. Gold IS gold. When paper starts blowin' in the wind, more people will remember that. Gold is in the correcting second wave of a 5 wave bull that will total over a hundred years. The next leg up, the THIRD wave, will begin from a base completed in late '97 / early '98. We are standing in King Kong's footprint, and we don't see any monkeys around.

(Thu Jul 03 1997 13:14)

I'm trying desparately to lose this ounce of gold but I just can't find anyone willing to make a fair bet.

(Thu Jul 03 1997 13:16)
watching the Big Bungee
George Cole ( at 13:08 ) : True, all true - but my, the premiums are getting cheaper !!

(Thu Jul 03 1997 13:17)

(Thu Jul 03 1997 13:18)
Sorry, that was $323.65. As if it makes a difference.

(Thu Jul 03 1997 13:19)
@ Yellow Stone
Bears RULE, OK !!

(Thu Jul 03 1997 13:23)
George: The final selling climax, or the start of it ? What do you think ?

(Thu Jul 03 1997 13:23)
Successful market veteran, George S. Cole foresees DOW 8500 in August followed by 20% decline - And Gold bear entering final panic stage. See June 30 report:

George s. Cole
(Thu Jul 03 1997 13:32)
gold bear
IMPARTIAL: I will have to see the volume figures before offering an opinion on whether this is the final selling climax. I suspect the volume is very high though. My gut feeling is that this will last a few more days and then reverse, but prices could drop considerably lower before the turnaround.

Many technicians have emphasized the importance of holding above $325 -- the 1993 low. With this support point now being taken out, it is going to get real rough before the final bottom is in. My guess -- something like $310-$315

(Thu Jul 03 1997 13:33)
How to bankrupt your own mining industry?

With friends in high places like this, I pity the poor Gold Mining Industry in Australia.

In my travels around the world over the last three years, the country I would least like to invest in was Australia, for it seems dedicated to the destruction of its main industries, further the taxes are so high that it is almost impossible for individual to save enough to aquire a stake, so they can get started in their own business.


Copyright  1997
Copyright  1997 Reuter Information Service

SYDNEY ( July 3, 1997 10:32 a.m. EDT ) - Australia's central bank announced Friday it had sold
167 tons of gold -- more than two-thirds of its holdings -- because it saw no benefit in holding
significant reserves.


"The Australian sales program followed a review by the bank of the costs and benefits of holding a
significant part of international reserves in the form of gold," the RBA said.

It said its board had concluded that although some gold was worth holding as a contingency, it no
longer needed to have 20 percent of its overall international reserves in the metal.

"The principal reason for this conclusion was that a country in Australia's position, with large gold
reserves in the ground and high annual production, derives negligible diversification benefits from
holding a significant proportion of its international reserves in the form of gold," the RBA said.

(Thu Jul 03 1997 13:34)
Thanks, buddy. I'll keep my powder dry for now.

(Thu Jul 03 1997 13:36)
FYI @ Reuter, maybe of interest.
REUTER ( News )

Reuter,Paul Julius,Freiherr von, originally, Israel Josaphat ( 1816-99 )
German journalist born in Cassel. He changed his name to REUTER in 1844.
In 1849 he formed in Aachen an organization for transmitting commercial
news by telegraph and pigeon post.

In 1851 he fixed his headquarters in London; and gradually his system
spread to the remotest regions.

(Thu Jul 03 1997 13:37)
Australia...The more I think about it, a Japan-Australia swap seems possible. It may have already been done when Hashimoto spoke. Japan wanted gold, and to lighten up on treasuries, Australia needs a happy customer for its raw materials and apparently needs cash. Even if it was laundered through a third party it could have happened that way. Anyone have anything official or a better scenario? What Australia should have done was to pay its pensioners in those beautiful $200 coins of theirs and not have written any checks for a while. The pensioners would have been better off, and much happier.

(Thu Jul 03 1997 13:38)
sleepless@ in new zealand
My Australian broker rang me yesterday and told me about the rumour.We both agreed it was a bit far fetched.Unbelievable decision!

(Thu Jul 03 1997 13:39)
I find it real convenient that gold got blasted just as the U.S. markets were closing before a long holiday weekend . Just as I find it real convenient that the Dow ran up 100 points in the first twenty minutes, only to fall back, then close up 100.45 points. We don't want any bad press over the weekend, now do we?

Who was
(Thu Jul 03 1997 13:42)
Who was beating on their chests asking for those Dec 400 naked options at 10? What is gold useful for? Gold doesn't disappear or evaporate!

(Thu Jul 03 1997 13:44)
In the light of golds sickly performance for many months, Gold Seer Aurophile examines the noble metals history, symptoms & prognosis. See Analysis section:

(Thu Jul 03 1997 13:46)
Ok I'm a believer, $325; never. I need a strong drink of
some kind

(Thu Jul 03 1997 13:50)
DEANER's site is about to go commercial.....The address is at the old site....I overlooked it the first time too.

(Thu Jul 03 1997 13:53)
Milhouse: Still need a rationale for why the world Needs gold now. the store of value one is dead at the moment. True 850 wass an extreme --try 500 the arugment remains the same.

George Cole
(Thu Jul 03 1997 13:54)
market discipline
Today's big break may be the market's way of discouraging additional CB selling. If they want to get rid of it, they are going to have to give it away.

(Thu Jul 03 1997 13:54)


Get on your knees, Kitcotexans, and worship the god of threetwofive.
You had better be praying awfully hard tonight for forgiveness,
or this is just the start. Keep messing with me at your peril.
I got to go over to SI and instruct my minions, but I'll be back. Believe it.

(Thu Jul 03 1997 13:59)
@where or where
Since most of the action was after the stox close, what is the opinion on what gold stocks do Monday morning? Gap lower then reverse? Gap lower and keep going south? If gold stocks lead the bullion, why isn't the XAU in the 80's now???

(Thu Jul 03 1997 14:01)

Please, everyone, now that we have arrived, do not be afraid to
liberally sprinkle the closing price ( Comex August delivery is fine )
in amongst your nuggets of information.

Dr. W
(Thu Jul 03 1997 14:02)
Today's low is a new 10+ year low. Does anyone know more precisly when gold last traded below 324?

(Thu Jul 03 1997 14:03)
@...Is Gold Cartel operating above the law ?
Does anyone know if the CB Gold Cartel are above SEC laws ? I appreciate that foreign CBs are quasi-govt institutions but if they are colluding to let each other dump gold would they not be considered to be manipulating the market.

The OPEC Cartel is a producer group esconed behind US benign neglect. The CB gold Cartel represents a price-fixing group that operates by managing market demand and supply through gold lease rates and gold bullion sales, respectively.

The question remains: Do minority investors in bullion have recourse as a class action against the Gold Cartel for the market manipulation and resultant evaporation of golds market value ?

Anyone care to offer an opinion ?

P.S. I am somewhat relieved to learn that most of the justification for golds recent bearish price decline can be blamed specifically on the Austrialian CB's significant gold sales program over the last six months - which was heretofore not offically disclosed ( to my knowledge ) . It was also recently disclosed that Auzzie gold miners have been heavy users of forward sales programs - they have the highest average industry costs and the A$ and gold lease rates dynamics have combined to provide a window of opportunity for these ( desparate ) people.

Interesting times...


(Thu Jul 03 1997 14:03)
Mike Sheller: If you think a couple of silver spikes especially the Hunt one make gold necessay today then go buy all you want its getting real cheap. Actually check Rhodium. It has been to $7000 in the last 6 years and is now only about $200--that's a buy eh? If you think you can predict gold's price with waves go ahead. Its a very good way to explain what happpened with mathematical precision but please but something away for the wife and kids if you plan to predict the future.

George Cole
(Thu Jul 03 1997 14:06)
Canadian Markets
GVC: Perhaps the Canadian markets are still open. If so can any of our Canadian friends tell us how the gold stocks are doing?

(Thu Jul 03 1997 14:09)

Brilliant, daring, prophetic!!!!!

However for your victory to be complete you still must up with a way to liberate just a single ounce of gold from moi. How bout this one, one ounce says Monday's London PM fix is greater than 3..2..5.

Bob A
(Thu Jul 03 1997 14:10)
If I owned a lot of gold I'd be kicking myself for not having sold it. If I sold it at higher levels I'd be looking to buy it back.
If I was short it I would be looking to cover.
I liked it at 350 and really like it now. IMHO it has more and more potential to explode if we have any type of crises, particularly a dollar crisis. I think J. Dines is looking for a dollar crises. As E. Janeway said, gold goes the opposite to the currency in power. The gold stocks havn't crashed so far today.

(Thu Jul 03 1997 14:16)
@UGLY(unless your a hepcat)
Here is the UGLY picture. View it at your own risk:

(Thu Jul 03 1997 14:16)
Barrick C$ 29.60 down about 80 cents. TVX C$7.20 down about 20 cents. Whats the code for Placer?

Lurker 777
(Thu Jul 03 1997 14:17)
@ how low can we go!

DR. W The last time Gold traded this low was in 1985 when gold hit $284.25 oz.

(Thu Jul 03 1997 14:19)
Selby -- Placer in the US is PDG

(Thu Jul 03 1997 14:22)
maybe @ some help, gold

(Thu Jul 03 1997 14:22)
GFD........How right you are !!!!!! The worst part about all the CB selling is that many are setting themselves up for a world-wide financial crisis...When the paper crashes ( History says when, not if ) , where will the strength of these banks be ??? I hope the buyer of the AUSSIE gold was the US FED, but I would bet it was an Asian govt. DOES ANYONE KNOW WHO THE BUYER IS ?????

George Cole
(Thu Jul 03 1997 14:22)
Bob A: Thanks for the stock info and the Eliot Janeway quote. He really knew how the get to the "nitty gritty" as they used to say in 1960s.

John: Congratulations on the accuracy of your prediction!. Perhaps you could enlighten us on how you came up with it. Did you have advance info on what the Australians were doing. Are you privy to the secret gold price objectives of government agencies and/or powerful financial institutions.? Are you a great chartist? A lucky guess? Or was this the price objective of an analyst you respect?

(Thu Jul 03 1997 14:24)
GVC- Maybe gold stocks will lead on the way up, but they have been lagging all the way down.

Bob A.- US equities markets closed at 1:00 pm Eastern today for the holiday.

(Thu Jul 03 1997 14:34)
try again @ sorry

(Thu Jul 03 1997 14:34)
Echo Bay C$ 7.65 down 35 cents.
PDG 21.70 down about 90 cents.

Consolidated Hepcat up unbelievably

George Cole
(Thu Jul 03 1997 14:34)
stocks and bullion
The ability ( so far ) of the gold stocks to hold up well in the face of collapsing bullion prices strongly suggest this is the final selling climax. If gold stock investors thought that bullion was going down for the count, the stocks would be plunging as well.

Australia isn't the first gold producer to dump much of its gold reserves. Aren't they following in Canada's footsteps?

Bob A
(Thu Jul 03 1997 14:34)
Thanks, I forgot about that

(Thu Jul 03 1997 14:35)
Remember, overseas markets are open tomorrow.

(Thu Jul 03 1997 14:36)
to Bart
Your 24 hour spot gold chart cannot be read today.

(Thu Jul 03 1997 14:39)
New York, July 3 - Gold prices took one of the largest one-day drops in recent years today, over $7/oz., in response to a comment posted on the Kitco Gold Discussion on the Internet by little-known commentator 2weeks. According to 2weeks, there is a serious chance that gold has permanently lost its role as a "store of value", reducing its worth ultimately to that derived from practical applications in such industries as electronics.

In a telephone interview, 2weeks described his comments as "purely speculative" and "not original" and said that he did not expect they would provoke such a tumble. In fact, he alleged, he had just predicted that spot prices would rise today and through next week. Insiders suspect 2weeks "lost his butt" in today's action.

Appearing lighthearted and almost giddy over today's market surprises, 2weeks laughed, "It sure beats boredom. And hey, it's just earthly wealth - I'm sure I'll be a better man for it."

The little voice that rocked the market would not make any predictions about what to expect next week, saying "I've caused enough trouble already. But I'm sure I'll wake up Monday and have something to say."

(Thu Jul 03 1997 14:41)
FSAGX and FDPMX are both UP! Does this tell us that the current SLAM down in gold, may be a FAKEOUT?

(Thu Jul 03 1997 14:43)
Stocks and Bullion
George Cole: Don't forget the US buyers are practically out of the market this afternoon and their effect or lack of one on the buying and selling of stocks should not be overlooked.

(Thu Jul 03 1997 14:44)

GSC - If you're expecting an answer, you gots another thing comin.
I tend to ascribe to the philosophy that "silence is the perfect expression of scorn"

(Thu Jul 03 1997 14:45)

I'm packing up my bags and heading for a vacation so I must sadly withdraw my offer. Who knows, when I get back maybe we will be doing 275 before 250. Sooner or later I'm going to hook ya! Until then, watch out fer them microbes.

(Thu Jul 03 1997 14:46)
Shouldn't this just about take spot price down to production costs for some the Aussies ????? Speaking of spot prices, the forward sales are done at prices higher than current spot. I saw an article that was written like gold was sold years ahead at current spot prices.

(Thu Jul 03 1997 14:48)

D.A. - Egads. You are one of the few people at this site that is
even remotely civil. I'm going to have to confront this monotonous
rabble by myself?

George S. Cole
(Thu Jul 03 1997 14:48)
SCHIPPI: The U.S. markets closed today at 1:00 P.M; the Fidelity quotes reflect prices as of that time. The big drop in bullion came a bit after 1:00 PM as did downward pressure on the Canadian golds. So I don't think the closing Fidelity quotes accurately reflect the current situation.

(Thu Jul 03 1997 14:53)
@mouth agape
Schippi: Look again. FSAGX -.20 @ 20.15 Dropped .23 in last hour.
Everybody has 3 days to think about it. I'm looking for a white flag.

RJ: You were right. Just in case no one else says so. Now, where do I go from here to make money? ( after joining goldbugs anonymous ) : )

(Thu Jul 03 1997 14:58)

I having a little trouble hearing you all here.
Go ahead, say it:

I broke the nest egg.
I broke the nest egg.
I broke the nest egg.

Here, let me help you get started:

I broke the nest egg.
I broke the nest egg.

(Thu Jul 03 1997 15:21)
May those that love us, love us!

And those that don't love us, may God turn their hearts.

And if God does'nt turn their hearts, may he turn their

So that we may know them by their LIMPING!!

(Thu Jul 03 1997 15:26)
Rich in Natural Resources

So now Austrialia has only 80 gold tonne in official reserves.

Austrailia has countless more tonnes in the ground; sought of like Canada.

This sale of 167 tonne ( 5.4 million ounces ) does little as far as making up for the increase gold sales ( so far ) for 1997 as reported by the WGC.

What happens if/when Austrialia and Canada decide to increase the gold portion of their reserves?

Or are the financial markets so exuberant, that common sense has ceased? The answer could be the level of the DOW when AG made his famous Irrational Exuberance comment and what it is today.

We are fighting a tough group. Bankers, brokers, governments that are controlled by patsies, who want to make everything look rosy and a public that hinges on their every word.

Fundy; they are trying to give gold the aura of a commodity. I'll bet if you take the average price of gold during the 850+ spike year and remove that spike and prices one month eitherside of that spike; you will find that gold, from real highs to real lows, has performed no better or worst than the base metals. On the other hand the price of finished products -that use the base metals- over that period have increased well out of proortion to them. It's crazy.

Mike Sheller
(Thu Jul 03 1997 15:29)
FUNDY: I ansolutely have been buying gold bullion during this period of weakness. I was waiting for it. Another $10 or $20 down makes little difference if one's plan is to accumulate on weakness for the next year. No problem. I certainly wouldn't want to be long futures this market. And I'm not. But I thank you for considering the wife & kid. I assure you my growing gold position will not in any way interfere with the stability of their futures.

(Thu Jul 03 1997 15:29)

Fundy; they are trying to give gold the aura of a
commodity. I'll bet if you take the average price of
gold during the 850+ spike year and remove that spike and prices one month eitherside of that spike; you will find
that gold, from real highs to real lows, has performed no better or worst than the base metals. On the other hand
the price of finished products -that use the base metals- over that period have increased well out of proportion to them. It's crazy.

(Thu Jul 03 1997 15:31)
Look for a powerful rally to begin soon after the higher-cost mines start closing.

(Thu Jul 03 1997 15:32)
@bungee jump

To All:

Not to worry. The long awaited washout has finally arrived. Look for more blood on Monday and the BIG reversal next Tuesday.

Any players who are short are likely to be ready to cash in their chips about now. Why risk losing their big gains? In fact, they will probably now go long for another killing on the reversal.

How much more can they expect after taking out the $325 stops?

Regrettably anonymous
(Thu Jul 03 1997 15:42)
John, you can change. Change is possible. Noone is condemned to stay the way they are, including you. And after you've changed, lost the inner hurt, perhaps bitterness, maybe a poor self-image, whatever it is that drives such ugly, petty, vindictive, mean-spiritedness, I'll welcome you back to this forum. That's not sour grapes. That's the way we all felt about you _before_ today. But remember this - we can be whatever we choose to be. There's no condemnation here, honestly. Just a recommendation. Choose to overcome the hurt and become the man you can be proud to be. In the meantime, please go away. You've got work to do.

If you cannot do that, at least give us a few hours a day when you agree not to post, so that the rest of us can enjoy ourselves in peace. Preferably daylight or evening hours. Is that too much to ask?

(Thu Jul 03 1997 15:43)
@..Canadian CB was more discreet over a longer period
GSC- check the records and you should discover that although the CDN CB was a seller of gold over the past 10 yrs. they did not achieve the level of notority of the Auzzie CB in this regard.

John/Hepcat: Glory is fleeting - everyone deserves a brief applause and I applaud you for your 3-2-5 chant but, alas, it doesn't surprise anyone who has watched gold tanking over the past year. To really be a hero on this thread you will need to call the turn-around ( if any ) .

3-2-0 more likely than 3-3-0 ? According to the trend - probably.


(Thu Jul 03 1997 15:48)
@New England
Wrapped everything up early today. Anybody....whats with the last minute crashes in gold during the last week. Is this a sign of fear and capitulation or manipulation or a cocktail of both. Today and yesterday gold finishes dead low on last minute selling and dow finishes on high with last minute buying. I guess what I am asking is what is the significance of this last minute stuff? Comments please..

(Thu Jul 03 1997 15:55)
Regrettably: Give it a break. John Dragoo Hepcat Repack Zoinks has just demonstrated the most amazing feat since K-1 first started. He has accurately predicted the bullion price months in advance. As of today he did it within a dollar and clearly is the best predictor ( based only on performance not rationale ) that this site has seen so far.
He did so in a manner that offended something between most and all posters and in the face of continual criticism. Unlike others who post here daily and have the aura of sages--he was right. Good time to reflect on who knows what and more importantly whether you know useful information when you see it.

(Thu Jul 03 1997 15:56)
Wanna bet? John the Repuke had as many gold contracts, as he has class. NONE, which makes him the biggest loser of ALL.

(Thu Jul 03 1997 16:03)
@New England
Did the annoucement of Aussie gold sales come before 11Am EST when gold was up or during the period from 11:30-1:10 when gold weakened. Also did they dump their gold during the last ten minutes of trading today and previous days to ensure they got the lowest price. Did thay also announce silver sales??

(Thu Jul 03 1997 16:06)
WW: Interesting question. My guess would be chart manipulation with not having to expend too much ammunition. Last minute selling on a holiday weekend would generate an exagerrated move due to thin market conditions. Anyone have any volume data?

(Thu Jul 03 1997 16:07)
D.A. @13:14: Give it up as hopeless. You'll never unload that worthless ounce. It's but a relic of the past. ...... As an alternate; I do collect odd tokens of bygone eras and could be induced to take it off your hands as sort of a souvenoir. Just a thought. ....... ( :- ) )

ted butler
(Thu Jul 03 1997 16:24)

Re your question on limits to short selling in gold ( if any ) . In my mind there are two types of gold short sales -paper and actual. We only get hard statistics on the paper variety done here in the states via the COT. That report due out monday, should show record short sales by spec technical funds as of close of biz 7/1 for gold and silver. The fact that we're talking about record positions ( or close to it ) means it's the biggest short position they've ever had in the past ( which is some guide to what might be a full position ) I don't think it reasonable to assume they would double or triple their position from here. They will have to cover these positions, since there is no possibility they will deliver. In Feb, the covering resulted in a $25-30 rally. While every short in gold has an open profit currently, it will not be realized until the position is bought back and closed out. If the longs ( AIG, Goldman Sachs, etc ) cave in and allow the shorts to buy back at current or lower prices by selling to them their long positions at a substantial loss, it will be the first time ever.
These are the paper shorts. The physical shorts, resulting from the leasing by central banks are in addition to the paper variety, although may be done by the same parties.Here, they are limited by the amount the CBs have to loan, which is an unknowable amount. But what we do know is that actual metal floods the market as a result of these short sales and that they have been cumulative. That is, since these loans are never paid back ( it's too easy to roll and never repay ) this catagory of short only grows ( my estimate is 100-150 million oz gold outstanding, including forward sales ) I don't know if rising lease rates recently reflect borrowing demand or Cbs pulling back, although my guess is short sale borrowing demand - as I think the day the CBs pull back we are looking at rates currently seen in Pa and Pt. with corresponding price action.

GFD - interesting thought on Aussie sale being bad lease being disguised. It's just a guess but I don't think so yet, as that would credit the CBs with more intelligence than deserved and a default in a falling market overlooks the gold could be bought cheaper than it was loaned out. I do think you'll see exactly this event in a rapidly rising market when it's obvious the gold is gone and the best they'll get back is cash if they're lucky and they won't have to admit to being idiots.

Hepcat - good call. You also asked to be reminded about your prediction of up days yesterday and today.

(Thu Jul 03 1997 16:25)
Wall Street Journal: LOL. A little humor in the foxhole. Well done.

Bill Buckler
(Thu Jul 03 1997 16:26)
George Cole ( Jul 3 12:23 ) I just heard about all the excitement,
it's 6 AM here in Oz. What an amazing contatenation of events!

Clinton threatens economic "war" against Japan if they dont
"fix" their trade surplus

Hashimoto threatens to sell Treasuries and buy Gold

Greenspan and Co leave rates unchanged

Aussie Reserve Bank announces 167 Ton Gold sale

By my initial calculations, I reckon that the $US Gold slide
down to $325.20 puts the $A Gold price around $A 433. Thats
right on a multi year low.

What's interesting about the RBA ( Oz Reserve Bank ) announcement
is not so much the fact as the timing. They knew fully the effect
it would have, especially with the amount of hedge fund shorting
of Gold having soared recently and especially with the U.S. being
on a short trading day before a long weekend.

"Somebody" wanted a much lower gold price - they got it!

I am going to have a busy morning updating charts/commentary at
my website. Right now, I'm off to have a good look around the net
to gather as many facts as possible.

The last $US Gold close I have below $US 325.20 was Dec. 19, 1985 ( $US 324 )
Gold traded below $US 300 for 16 Days in 1985 ( Feb 21 - March 15 )
and ONE DAY in 1982 ( June 21.

Hope to have all charts/commentary up by about 9 PM ( US EST ) .
at The updated
$A gold chart should be something to see.

(Thu Jul 03 1997 16:37)
Re: GFD, 13:08, the big flush
GFD: I believe you have it nailed. Very large players world-wide in collusion with much of the political structure are accumulating gold in its various forms. I had assumed they were mainly interested in the stocks and were selling the bullion to force the whole complex down. Now I am not so sure. Could our leaders ( klinton has been accumulating gold for quite some time ) be so cynical as to attempt to force the small holder of a few krands to sell! Pushing the price below 300 should induce more than a little panic in the little guy.

What makes this so rotten is they are planning on gold confiscation ( after the bubble bursts ) while they sell the peoples gold to force the small holder to exchange worth for soon to be worthless paper. All this so the super rich may exchange paper for worth. After this farce is over should they dare pass gold confiscation laws, I would hope their harvest would be derisive laughter and not a little warm spit.

As for me if you cannot beat em join em. I have been buying for cash, krands. The ones I got today were minted in 1976. Incidently when I went to the bank to pick up the paper to exchange for worth, the clerk had trouble counting the hundreds. Seems they were stuck together. She thought they must be using cheaper ink or something. I remarked perhaps they were dipped suspected iranian 100s. I think one of the final tests for suspected iranian 100s involves some sort of bath.

(Thu Jul 03 1997 16:38)
Fundy - Thanks. You will be rewarded greatly in this life and the next.

Ted Butler - Thank you as well. This followed on these heels of a post that
asked if I would kindly remind people if threetwofive wasn't attained, so take
it for what it's worth. It always provokes much merriment on this site to parrot what everyone else is saying ( Gold is going up ) and ask to be corrected if
this is not the case. I did it once before with GSC ( see the "broke to lead" post on SI ) . Of course, whether you believe I'm doing this on purpose or not
depends on you. Guess you'll have three days to look up at the gold quote box
and see if I should be trusted.

George s. Cole
(Thu Jul 03 1997 16:48)
Ted Butler: You have added greatly to my knowledge of dynamics of the gold leasing market. Thanks much!

Captain Bill: I doubt if that "someone" was anybody in the Australian government or Reserve Bank. Perhaps Bob Rubin or Alan Greenspan? Could this be their way ( together with leaving rates unchanged ) of telling Hashimoto to "shove it".

(Thu Jul 03 1997 16:57)
Sonny, anyone can be lucky once. When your cousin Jim was a math teacher, he always said, "Aunt Sadie, I make 'em show me how they did it. You got a yard full of chickens, and every one points exactly due north a hundred times a day, but dang if I'd use any of 'em as a compass." Enough said.

The more-gracious tone of your last post noted and appreciated, John.

Pussy Galore (Broker)
(Thu Jul 03 1997 16:57)

Hepcat: We have an opening at our "house" for a trained metals analyst. He must also be a real stud and willing to make our brokeress's willing and happy to pass a usually boring day. Don't worry about any outside threats as the Alley Cat Mob provides for our safety.

(Thu Jul 03 1997 16:58)
@New England
At what level and for how long does it have to stay there before mines start to shut down and effect supply. When and which miners can hold out for how long and at what lower price.

Significantly for miners what PRICE IS TOO LOW?

(Thu Jul 03 1997 17:00)
No one seems to have noticed how well silver did by comparison, Central Fund of Canada ( 75% Silver ) is up one-sixteenth on the day. Let all the CB's sell. We will hold all the gold and issue our own coins like the private mints of the California Gold Rush days. Do we have a candidate for a coin portrait?

George Cole
(Thu Jul 03 1997 17:06)
mine closures
WW: I don't have specific figures, but the Australian and South African mines generally are higher cost than the North American producers. I suspect prices already are too low for many of these high cost miners. But prices will have to stay down here for awhile before they begin to shut down.

(Thu Jul 03 1997 17:08)
Mike Sheller&Vronsky -I saw a star slide from the sky Blinding the North as it went by Too burning and too bright to hold Too lovely to be bought or sold Good only to make wishes on And then forever to be
gone. Oh,I have slipped the surly bonds of earth and danced the skies on laughter-silverd wings; Sunword I've climbed and joined the tumbling mirth of sun-split clouds - and done a hundred things you have not dreamed of - wheeled and soared and swung high in the sunlight silence; hovering there. I've chased the shouting wind along, and flung my eager craft through footless halls of air. Up, up the long delirious burning blue I've topped the wind-swept heights with easy grace where never lark, or even eagle ever flew - and, while with silent lifting mind I've trod the high untrespassed sanctity of space, put out my hand and touched the Face of God. John Gillespie Magee, Jr.

(Thu Jul 03 1997 17:12)
Grandma: gracious does not apply to your post. The man called the price here and on a couple of other sites frequently during the last several months. Who is the bird brain then? No quotations today? Nuff said.

(Thu Jul 03 1997 17:19)

Grandma - What a great and glorious day for threetwofive.
The chicken thing doesn't apply. If there was one chicken
in the henhouse that persistently and consistently pointed
north when all the other chickens were pecking at it and
trolling for foxes to kill the chicken or at least get it to
turn around in circles like they all did, I would have to
say, "That is one affected chicken." Then, probably,
it would go into the fryer with all the other chickens, but
danged if it wouldn't taste a lot better than the rest and
maybe E.B. White would commemorative that particular
chicken ( as you are going to commemorate me on this
site for a very long time if you know what's good for you,
yet already the carping has started and this doesn't make
threetwofive very happy, you do want threetwofive to be
happy, don't you? ) and the last sentence would say, "Charlotte was both"

(Thu Jul 03 1997 17:24)
I was amazed at Bill Bucklers comment:

"Somebody" wanted a much lower gold price - they got it!"

I thought he, of all people, had a handle on the gold market. Understanding
that it is one of the few that is impossible to manipulate.. Being traded
globally, why would someone try to manipulate gold when other investments
are so much easier and thinly traded. Gold is not being pushed lower by
someone.. It is going lower because of supply/demand.


Does anyone here, beside myself, get this?

(Thu Jul 03 1997 17:25)
Thoughts on the Wall - looking down
Ted Butler: I disagree that it is too soon to see loan defaults. Paper gold is cheap and very available. But I wonder if a couple hundred tons on actual material might be a bit hard to get - with retail deliveries taking several weeks for small purchases ( 10's of ounces ) . The key here is that a hidden default is the transformation of a pile of metal into a pile of paper.

These defaults may have been going on for some time. Who will ever know when they started??

bw: I don't think that this story is necessarily between the big guys and the little guys. I suspect it has more to do with asian big guys declaring independence from western big guys. Confiscation of the little guys gold will be an admission of failure to manage the paper markets and to admit that gold has intrinsic value - something done as a last resort only and only by the next administration.

A resurrection of gold as the primary reserve currency would result in a very dramatic realignment of economic power - with surprising winners and loosers.

Mike Sheller
(Thu Jul 03 1997 17:29)
POORBOYS: That was beautiful. Thank you. I sat here reading it twice. I am only flattered and humbled that you included my name in such an uplifting post.

(Thu Jul 03 1997 17:30)
WW: Mining costs. Two I own are Glamis @ 265 per and Bema @ 230 per, both US$. That is not typical, most are higher.

Mike Sheller
(Thu Jul 03 1997 17:40)
WW: I believe earlier in the day you mused about dreaming up a lawsuit to keep occupied. I meant to answer, but somehow life got in the way. Hows about a class action suit by goldbugs in the name of all the citizens what had their gold stole by the guvmint' in '34?? If every goldbug chipped in $100 bucks, or maybe an ounce of gold in dollars, perhaps you'd handle the case? Think of the headlines. Think of the boost for gold and the black eye to government arbitrary despotism. While I think I am not without a sense of humor, I am truly serious about this. We could do a fund-raising campaign, create a non-profit org, & give em' a run. What say? You'd even be our token liberal! What diversity! I'll write your speeches, I'll do your promotion. I'll stand shoulder to shoulder with you, and I know many Kitcoites will too. It's the FOURTH tommorrow, man. Think about it. Seriously. We need you. Let's GET REAL...Let's GET BACK OUR GOLD!

(Thu Jul 03 1997 17:41)
If no can shoot a hole in my post of 13:37 I am sticking with it.

(Thu Jul 03 1997 17:43)
Mike Sheller Thank You Towards the end of July I try to grasp the inevitable challenge of gold forgotten.Astrologers touch

(Thu Jul 03 1997 17:53)
Many of the holders of bullion I consider "weak longs"
in this market.. They are scared to death that gold will
go lower and want their money out. Now! This is
extremely typical of investors holding "anything" that
is losing value week by week.. Makes sense to me..
Heck, if I owned gold, that has been declining in
value for 15 years I probably would have gotten our
moons ago.

When I consider a bottoming stock I usually look to see
if there has been a complete turnover of the "float" at or
near the current price.. If not, I know there are many who
have ridden this thing down and are getting very nervous.
This is why George S. Cole constantly is looking for a
high, and I mean "high", volume day. At some point there
are more "strong" longs in at the current price than "weak"
longs hanging on for dear life..

I dont know if anyone can calculate this but I believe there
are more long term weak longs ( CBs or otherwise ) still
clinging to their precious gold.. Im sure they are nervous
as ever and not just a bit disgusted with the current trend..

This always happens, always will, in a super depressed market..
Forget manipulation.. The biggest sellers will do so at the end
and they will signal the bottom..

The bottom is the hardest to detect.. It will seem like there
is no demand, only sellers. Were not there yet To many
respected kitco participants trying to predict where it will
stop and why.

(Thu Jul 03 1997 17:54)
@New England
So we are looking at probably 280 where the industry shuts down. Or is this what the authorities want so they can control production and inventory by bankrupting the private sector and since they know gold is money paying off shareholders at pennies on the dollar to takeover the mines OR the REAL MINT. Thoughts.. This selling seems frantic and deliberate and I cant help but think it isnt a way to attempt to gain control of the money producing industry when THEY know they are way out on a limb with respect to paper obligations!...Thoughts..

(Thu Jul 03 1997 17:55)
DEFLATIONARY takes hold: Today, the CRB Commodity Index broke down to make a new 2-year low. The unemployment rate edged up from 4.8% to 5.0%. In Canada, bankruptcies were reported to up 19% from a year ago.

Knight-Ridder reported: "The June jobs report suggests the demand for labor is weakening somewhat, and weakens the case for a sharp rebound in economic activity in the third quarter. Indeed, the weaker-than-expected data reinforces the weak recent economic tone set by: 1 ) 3 consecutive monthly declines in retail sales, 2 ) a possible drop in June unit auto sales below the bottom of a 3-year-old sideways range, 3 ) preliminary evidence that the retail weakness is slowing the manufacturing sector, and 4 ) tentative indications inventories may be growing at a faster than desired pace."

It looks like gold has been caught in, and has been subjected to the emerging deflationary environment. However, in the long-run, the gold price will benefit from deflation -- as all types of financial paper will collapse in value from credit difficulties. Gold and silver are the only money alternatives to these credit instruments.

A violent deflation and economic depression have now begun. It looks like, along with it, it's providing bargain-basement precious metal prices. A tremendous stock market crash awaits equities -- caught in grossly over-valued territory in a collapsing economic environment.

(Thu Jul 03 1997 18:01)
When I was actively trading real estate and trust deeds ( mortages in most states ) I liked to negotiate directly with the person on the other side of the deal. Body language, facial expressions, and eye movement many times spoke more loudly than the person's words. It is well established that most people when they are lying, do not look into the eyes of the person to whom they are lying. Even such an expert as Bill Clinton will not be able to look directly into the camera when telling one, unless it is in a rehearsed speech. Not being able to watch pussycat John, I am forced to look at his words and guess at what is behind them.
My analysis is that he is a manic-depressive with multiple personalities, all inadequate, but with delusions of grandeur. In real life, he is likely a Caspermilktoast, when driving a car he will be very aggressive, giving other drivers the one finger salute when offended, which will be often. Given time he may grow up, but it is doubtful.

(Thu Jul 03 1997 18:04)

Prognosticator - You got me. I was lying about $325.




(Thu Jul 03 1997 18:08)
PUETZ: I have always been with you on the deflationary argument...but I expected, still expect?, a runup on gold to $450-500 based upon a false inflationary scare scenario. Then a drop to lower levels. Recall my previous comments about the Monetary Base etc.

WW: I reject the conspiracy theory of governments. We are still a tribal world. It is every country acting in its own interest. I could accept a conspiracy theory among the major world gold producing corporations though.

(Thu Jul 03 1997 18:17)
Toronto close: ABX 29.30; ECO 7.10; PDG 21.70

(Thu Jul 03 1997 18:19)
@ long week end

Glenn, you recently said that silver could drop in tandem with gold to a price of $4.40. Very timely call! I wish you posted more frequently.

George S. Cole, your comments on the direction of gold have been precious to me. However, as you might know, I do not share your view of an imminent demise of the bulls in Wall Street. There will be an end eventually, but for now, if you look at the level of short term money invested by Stock Mutual Funds, you will have to admit that it is high and reflects a more rational view of the market. Stocks have been and still are good to my portfolio and if I had been out of them for the past ten years I would now be in a much different financial situation.

Hepcat, your call on the price of gold was right on the mark.

(Thu Jul 03 1997 18:21)
@ the Toronto Homestead
Back in Canada to visit the parental units, and what do I see? Gold down, techs up. At least the XAU didn't tank, a good sign. In the Wall St. Journal today there was an article on the confusion that is felt among economists regarding the economic picture, i.e. retail sales down, factory orders down, autos down, but new homes up bigtime. However, if these guys read S Puetz's analysis all would be clear to them. Retail sales are in a DEFLATION because plastic is maxed out for many people, and deliquencies are up. Auto sales are in a DEFLATION because of the same reason -- the credit is drying up from the banks. The only sectors that are inflating are real estate and the financial markets -- no surprise there, banks feel that the stock and real estate markets are good bets so they will accept these as collateral. It shouldn't be long before the desiccation in retail and auto credit spills over into the real estate and stock markets, triggering a substantial decline.

Until then, I will continue to get pounded shorting the techs and going long on the XAU. So much for fundamental analysis ...

- The Orgster

(Thu Jul 03 1997 18:26)
@ Hepcat ...
The thrashing of John "Hepcat" is uncalled for. He made a great call on gold today. I like to think of this site as a collection of independent thinkers where the herd instinct is kept at bay.

(Thu Jul 03 1997 18:26)
@New England
I believe this bottom in the metals will be secular and give rise to great bull conversely a great bear for financials. NOTAGOLDBUG makes a good point can there really be any believers at the bottom of a secular BEAR just as all are believers at the top of the secular bull. We are getting there but we are not there yet. Even RJ a convinced gold bear said he would cover his short today/ such belief in a rally ( however short term ) by a bear is not constructive. No disrespect to GSC ( I include myself here ) but we must really reach the point of TRULY questioning our position before a true secular bottom. Speed holding up the white flag is encouraging but he is not as avid as others on this site. If it were not this way then becoming rich would be easy. It is not either easy in work or especially in speculation to become rich. Some will be on board for the bull but will their level of experience make them sell at the slightest sign of weakness ie the pavlov's dog dont punish me again. I have experienced this and unfortunately will probably do so again. I am beginning to worry about my gold stks going bankrupt and the hopelessnees of the situation has made me emotinally entertain selling ( the pain is tremendous especially with raging stk mkt ) /this is at least short term bullish. What would it take for Steve and CSG to question their positions and if they did where would the rest of of us be on the continuum. And then again maybe they dont have to. There were some bulls at previous stk mkt bottoms. But then with gold the whole world seems against it or doesnt know how to deal with money a govt cant control/thus my thesis is it is a race between the inevitalble crisis and govt ability to kill the price to a degree that they can gain control of the industry and make gold the govts property by basically bankrupting the industry and allow for govt takeover at pennies on the dollar...Is this crazy given whats happening. Remember Kaplans article about commercials being long and specs being short means the price should rise. Wrong when the govt thru or as Merrill is a spec shorting the hell out of the mkt no matter what the commercials do. If history is a guide metals should be rallying but they are not/ maybe things are different/who can stop the massive selling in the paper mkt with the INTENT to drive the price down..Comments.

(Thu Jul 03 1997 18:28)

Selby - I know how hesitant you are to acknowledge the queries of
a madman, but I wanted to ask you if you would please continue
to post here when I'm gone. I fear threetwofive's days are
numbered, and you have also the gift of true knowledge as threetwofive
did. In no way would I want your views to have the stigma of being
"endorsed" by threetwofive, however, or carrying the imprimatur
of threetwofive, so I could understand if you demure.

P.S. Are you still holding?

(Thu Jul 03 1997 18:32)
SELBY: Thank you for the Toronto close post. A real public service. Is Vancouver still trading and can you get some or tell us how to do it?

(Thu Jul 03 1997 18:41)
WW.. Thank you for your comment.

(Thu Jul 03 1997 18:43)
Changing the subject. Japan household spending drops.

George Cole
(Thu Jul 03 1997 18:44)
stock blowoff.
ESTE: This stock blowoff will continue until August and Dow 8500. After that watch out. When the end comes it will be swift and dramtic. Do you really thing all the baby boomers and newly minted financial geniuses will be able to get out in time?

WW: If the final demise of the the stock bull still cannot ignite gold, then I will join the ranks of the bears and sell my modest gold mutual fund holdings. That is the only scenario which could turn me long-term bearish down here.

(Thu Jul 03 1997 18:49)
Many on this sight espouse the view that govts hate gold because they cant control it. THOUGHT Could present CB /GOVT/WALL ST assault on gold to be to distress the industry so as to give the govt EFFECTICE control over all future gold supply so that it become a "controlled" currency. The universal deprecation of gold ( except for Hashi ) and timely sale announcements at key support levels seem perfect if one was contemplating such a strategy. Many cos will be in trouble if price declines below 300 and stays there for any time. Perfect time for bailout for pennies and control of this natural resource to the govt or allied institution. Alas THE INDEPENDENT GOLD YARDSTICK WILL BE GONE!! Comments..

(Thu Jul 03 1997 18:50)
ORGAN: No one is thrashing John Hepcat for the call he made. It's the manner in which he vocalizes his bearishness that rubs most of us the wrong way. We would welcome his commentary with open arms if it was posted in a thoughtful professional manner like most of the other contributors to this fine forum do.

(Thu Jul 03 1997 18:55)
@walking wounded
WW: Breathe! remember to breathe. I am avid, just tired. I didn't sell! I can't believe I haven't chickened out by now.

Canadian maple leafs - silver have a face value of $5. How low does silver have to go before the maples become currency again? I think only another buck U.S. or buck thirty Canadian. Gold maples have a face value of $50. I found the floor! Gold can only go down another $275!!!

(Thu Jul 03 1997 18:56)

(Thu Jul 03 1997 19:01)
Poorboys - Today's poem reminds me that this place has often seen some brilliant posts which are not just about gold. Sometimes the variety here makes me think that this site should win some kind of award for its brilliant diversity!
All - The Gloom and Doom etc. ( and the North American July heat wave ) seems lately to have made quite a few people ( for lack of a better word ) - testy - so much so, that some of the greats have even been insensitive ( or overly sensitive as the case may be ) and have thus gotten on each others nerves. Lets all RELAX.
Par example, my good friend Front recently signed off due to some strange misunderstanding with vronsky. Don't know what it was all about, but, Front, my friend, I hereby add my name to the regulars who have requested your return. Your comments have always been appreciated by the many. I recall that you mentioned, in reference to George Cole ( I believe ) that a good economist either predicts a price or a time but not both. Well, just to remind everyone here that, although we are not all always right, George and I had both recently agreed that it appeared that either: 1 ) we were
very close to a bottom ( in time ) and that the lows were in or, 2 ) that a 'spike',
downwards, would soon occur.

Date: Tue Jun 17 1997 16:37
Mooney ( ) :
" ALL! Mike's 'GOLD GLOOM' URL that he gave us at 14:50 is a
MUST read for every serious participant at this site. The summary
that is given is a masterpiece of negative sentiment that is the
PERFECT example to give us a contrarian-type signal that the lows
are happening right now. ( In addition to the Captn's signal ) .
Therefore I now believe that either: 1 ) the lows are in place or that,
2 ) we will experience a sharp downward spike which will then
spike back up. Either way it is soon time to cash in the chips and lay them on the table. Louis, Louis, Louiiiiieeee!!!! ( I know, -calm down, Mooney, calm down ) ."

Date: Tue Jun 17 1997 16:42
George S. Cole ( ) :
"MOONEY: We are on the same wavelength! "

As some here have today mentioned, the spike down can continue for a few days, but it will be very testy on many market participants nerves as to just when exactly to jump back aboard. The gold market has really not seen such a sharp downward movement for quite some time so the volatility we will now witness should be very interesting indeed. As I now see it, if the market does not spike back upwards immediately after finishing its sharp down move, then the Gold market may consolidate for a brief time period and may actually spike downwards again, which event should prove to be the final blow-off. If, however, the price spikes back upwards sometime next week then the bull has started.

Some others of us have remarked over the last 8-10 months about just how ordered ( unusually so ) this market decline has been ( up until this last two weeks ) . The present sharp decline may have the unexpected effect of serving to shake the Gold market ( in other words - the major participants ) up enough to restore it to a 'free' market ( supply-demand ) once more. Time will tell.
Front, Aurophile, Oldman, and all other delinquents - Please return! Its starting to get interesting once more!

(Thu Jul 03 1997 19:06)

(Thu Jul 03 1997 19:08)
WW: Govt Takeover? No. They are more worried about the internet and their loss of control through that medium. Borders are going away...Good for us, bad for them. Taxation of transactions is getting more difficult. Good for us, bad for them. They are worried about that and could co-operate in that regard. Look at the difficulty they have in co-operation in establishing the EMU in 13 countries in Europe. Gold still rules. I think today is an example of that. In 1914 the same thing happened. again in 1930, gold goes from weak hands to strong hands. Instead of the Gold Exchange Standard of 1914 and 1930 we have a free market exchange. The pressures that led to the exchange today are EXACTLY the same as through all of recorded history: ie defecit spending. Today a bill got paid in gold by the Australians. Nothing new has been added to 6000 years of history. Who is next in line at the payment window?

(Thu Jul 03 1997 19:10)
Organ- re the XAU. The climactic selling of the day in bullion ocurred after the US equities markets closed at 1:00 pm. I expect the stocks to follow the bullion on Monday.

(Thu Jul 03 1997 19:16)
where's the sold gold?
Whoever bought the 167 tonnes is going to have a lot of jewelry to make. Especially if they manufacture the 10k gold-plated shopping mall-type chains out of it, they probably have enough gold chain to reach Mars. Surely no investor bought this gold, as gold is no longer investment grade.

(Thu Jul 03 1997 19:25)
I intend to post here for the forseeable future afterall why not.

(Thu Jul 03 1997 19:33)
Donald: You can get quotes For Free for all 4 Canadian exchanges

The free quotes are in the smaller left frame just below screen level when you get to the first screen. Type the code- no exchange symbol- and leave a space between each one you want upto 10. You will get quotes on upto 4 exchanges if the stock is listed on more than 1.

(Thu Jul 03 1997 19:43)
We may not have to wait till August to see Cole's top in stocks or the bottom in gold. Maybe WITHIN the next two weeks.

(Thu Jul 03 1997 19:43)
Mooney: I now understand ( :- ) ) .

(Thu Jul 03 1997 19:46)
MIKEHARRY: Oh Yeah? What part of Mars?

(Thu Jul 03 1997 19:46)
@el nino
I realize that my posting will have nothing directly to do with the price of gold; however, today's Boston Globe had an interesting article on the weather effect called El Nino. The article went on to say that El Nino
( last experienced in its severity in the early 1980's ) will have a dramatic impact on world climates and crops. The article singled out Australia and South America ( coffee ) as the two area to be hardest hit by severe drought conditions, yet parts of North America will receive excessive rainfall. We talked about exogenous events...the CRB and JOC Comments, views, or opinions.

(Thu Jul 03 1997 19:49)
I forgot to congratulate Stephen Mooney for his brilliant call.
( Oh, I see he's already accorded himself the credit, and referenced
one of his previous thousand posts of lite, filed right before the
"Gold Going Up" section. Grandma - I think Stephen is one
of those 100 times a day north-pointing birds you were referring to. )
Stephen - Does "Spy" magazine still have the "Logrolling in our
Time" section?
Stephen - Want to really test your mettle? Try predicting the bottom
in Flag. You only have thirty numbers to choose from.

(Thu Jul 03 1997 19:51)
To Mr. Vronsky

Dear Mr. Vronsky:

I have just received your e-mail that you asked to be passed on to me. Please allow me to say that I understand completely your feelings. I also can see your point of the wonderful site you have created. Any disparaging remarks that I may have sent towards the way you do business was obviously completely unfounded, as you have shown me the gentleman that you certainly are. I must add, and I'm sure you'll agree, that everyone has the right to their opinion and only well founded reason and logic, and perhaps depth of soul, should be used to attack anyones arguments. I also have learned from this exercise and will endeavour to achieve the lofty goal of professional discussions. Thank you Mr. Vronsky, you are a gentleman and I understand your feelings.

On a personal note....I would like to take this opportunity to thank the other gentleman who let me know, in various ways, their feelings. They were much appreciated. Also, I wish to announce the birth of our first granddaughter this evening at 6:50 . Hell of a day gentlemen, HELL OF A DAY !!!


(Thu Jul 03 1997 19:56)
golden fizzle
Donald, maybe gold becomes so cheap that storing it becomes too costly, as valuable wharehouse space is needed for all the dram and microprocessor chips ( far more scarce and wonderful than gold ) . Maybe they blast all the silly yellow stuff off in a rocket headed for mars where some eons from now little martians try to deal with the stuff.

(Thu Jul 03 1997 19:58)
NotaGoldBug: My interpretation of Cap'Bill Buckler's remarks on manipulation was that he was referring only to the timing of the event. Today on a short market day in the US before a 3 day holiday. The deed was long since done, but someone seems to have carefully chosen the time of the announcement. The someone was probably courted by prescient shorts or perhaps the other way round.
Actually when compared to currency and bond markets, or even equity markets now, the gold market is not really all that large.
I had imagined that Japan was looking for a bonds for gold trade with the IMF. But let's face it, all the CB's are now convinced that treasury bills, notes and bonds are the only way to go as I recently wrote.
The volume of bullion trading has been larger than normal for some time now and I would not be surprised to learn of other mini-nation gold sales. The question is whether the Aussies will have panicked others into moving up in the selling queu. Monday am should be most interesting with everyone throwing gold stocks out the window.

(Thu Jul 03 1997 19:59)
@ tired of the bragging
Hepcat. As I posted a couple of days ago: "Lucky Guess". Don't break your arm patting yourself on the back.

(Thu Jul 03 1997 20:00)
Congratulations Front! A golden treasure came to you this day.

(Thu Jul 03 1997 20:01)
to RLM
The majority of so called "Experts" who regularly comment on various Stock Markets complain about high valuations and are scared out of their wits about the present situation. As long as this will persists the next drop in stock prices will be just another correction and nothing more. I see too much pessimism out there for a collapse in stock prices.
Many Fund Managers are holding large sums of cash that will be deployed in the next correction to buy stocks that appeal to them at lower prices.
Much as we would like, none of them will buy any precious metals with that cash yet.

Bill Buckler
(Thu Jul 03 1997 20:10)
NotaGoldbug ( Jul 3, 17:24 ) Gold market impossible to manipulate?? It has been manipulated since 1962, when the London Gold pool started up.

The Aussie Reserve Bank entered into forward contracts to sell the Gold over the past six months. These contracts apparently come due for delivery starting in July. The deed is done, the price has already been set, the announcement could have been made at any time.

Why choose the last day before a long weekend in the U.S., and then make the amazing statement that they intended to have no effect on the price. No one, not even the Aussie Reserve Bank, is that naive.

Also, Mr Howard, Aussie PM, just got back from a trip to the U.S. a couple of days ago.

Had to take time out from getting charts ready to post a reply to this one.

(Thu Jul 03 1997 20:10)
MIKEHARRY: Glad you are not thin skinned! Did you hear the one about the illiterate prostitute? She got a job in a gold warehouse.

(Thu Jul 03 1997 20:11)
With so many CB's coming up up and reporting gold sales could it be that banks are bailing out gold dealers? If dealer sold out leased gold and some very valuable customer ( s ) suddenly insist ( s ) on delivery of yellow metal, one cannot simply deplete warehouse stocks without causing an alarm and affecting POG. Our dealer would try to negotiate a deal between two parties. Do CB's have room to maneuver? Not much! Ironically, they rather dispose gold then undermine credibility of their currency in face of gold. What is happening right now could be well "run on CB's".

Just a speculation...

(Thu Jul 03 1997 20:14)
@science fiction
I was wondering what the age of most most posters to this group
is? ( 50-60? ) . It would be interesting because most of the posts
seem to be reliving the 1970's and 1980's and are blind to
the paradigm of robotic intelligence which we know as "internet",
"kitco web site", "spreadsheets", "aeromagnetic surveys", etc.
Silicon stores value more reliably than gold, is more secure,
more transferable, lower storage cost. Silicon also amplifies
the ability of business's to make a profit by orders of magnitude
better financial reporting on one side and on the other, technology
and engineering are creating new products and reducing costs.
Gold has lost its job as a store of value and must survive
om its skills as an industrial metal ( reunited with silver, how
touching! ) which gives no present bottom to the price. ( $200 seems
possible within two years if platinum becomes the metal of
choice for jewellery )
The digital paradigm also has changed consumption patterns for
some reason ( why I do not know, maybe somebody has a suggestion )
so that the paradigm of conspicuous consumption has faded
somewhat, cars kept longer ( maybe they're lasting longer
and more reliable ) , less flashy clothes etc, maybe a response
to todays complexity...overwhelmed with electronic imagery,
medication, just to work a VCR turns peoples heads ...
well, i take something from what is posted in Kitco,
( great charts and comments panda, ) , but feel that the scenario
that seems to be platformed is not in the next ten years except
as a second order effect, that the primary effect is declining
metal and commodity prices, a rising dow but also increasing
volatility. The feds tendency to print money is always a wild card
but is being underwritten by the productivity improvements comming
from the digital paradigm which has at least ten years to run
and may eventually metamorph into tru digital intelligence...
infinity is the bottom line once that happens ( maybe our obsolence
as a species! )

Well.. some thoughts...I've learnt the hard way, its not
just bone that get old, brains get old and need the correcting
lense of introspection to see clearly, young'uns pick up what
is happening so naturally it makes me cry, only vulnerabilty
is lack of experience which levels the field, and I have found the
forum very helpful in respect of that, and would like to return a little,
this is writtten in that spirit and not to much pushing a barrow
I hope.
Again for what its worth, gold may have no bottom, asia is the
wild card, how quickly is it converting to the digital paradigm?
pretty quick, but sometimes the habits of a generation do not
die until the generation dies, but this is a second order effect,
the first order effect is the converstion to the digital
paradigm which seems to transit in 4 month multiples.

(Thu Jul 03 1997 20:21)
BILL BUCKLER: I didn't say that gold markets were impossible to manipulate. I said that it was unlikely that governments would conspire with other countries to manipulate the gold market. Big Difference. I said that countries would act in their own best interest. Australia probably thinks it has done that. I think history will eventually record that as an error, an attempt to postpone, or prevent, the inevitable. History is likely to record that it failed; and that other countries who take the same path will also fail.

(Thu Jul 03 1997 20:25)
tanami: a very thoughtful analysis. linear thinking and projection is certainly popular now and may even be the consensus. i received an email message yesterday from the organizer of a section of business cycle/ economic cycle section for a large economic confeence to be held in Canada next year practically begging for papers. give tha everything has gone so well and straight line and clinton has proclaimed the business cycle dead, this is easy to understand. but i think that history shows that cycles do indeed exist and that we may simply be on the flat part of the up wave and nearing the end of it at that. technology and accounting have made great progress, but i see little evidence of a change in human nature.

(Thu Jul 03 1997 20:26)
Bill Buckler:

You said that:

"The Aussie Reserve Bank entered into forward contracts to sell the Gold over
the past six months"


"the announcement could have been made at any time."

So, to decide to sell gold and then to sell it is manipulation Other than
being an unusually large transaction and just before a holiday I would
say they did what they intended to do.. You call it manipulation, I call it
a sale of a wasting asset. What would you have done, put in their shoes,
in desperate need of capitol. Governments are people..

(Thu Jul 03 1997 20:26)
FRONT: Our recent experience brings to mind a noble thought very well-expressed in the following -

A MANS IDEAL by edgar a. guest

To live as gently as I can;
To be, no matter where, a man;
To take what comes of good or ill
And cling to faith and honour still;
To do my best and let that stand,
The record of my brain and hand,
And then should failure come to me,
Still work and hope for victory.

To have no secret place wherein
I stoop unseen to shame and sin;
To be the same when Im alone,
As when my every deed is known.
To live undaunted, unafraid
Of any step that I have made;
To be without pretense or sham,
Exactly what men think I am.

Heart-felt welcome to you and your new Grand-daughter.

(Thu Jul 03 1997 20:28)

Retired - Your call. I've had a string of "lucky guesses" in the last few days. I nailed RJ2 immediately upon his return to K-2 ( where he is
now posting under the handle "Leaner" ) , I deanagrammed my interlocutor, the Belgian thing that we already spoke of, and now
gold at threetwofive. What a glorious day for threetwofive.
Whose side do you want to be on, retired? Lucky and correct
or smart and incorrect?

"I don't have to package this thing. It is packaging itself."

-From the "Threetwofive Book of Goodness." Part one in a endless
series of installments, largely self-congratulatory, of what some
have termed "The greatest single assault ever made on K-1"

(Thu Jul 03 1997 20:33)
WW -- Something like 2/3s of all above ground gold is held in private hands. It's something to think about. Point two, EBN gold is up $0.97, not much, but what the hell, it's Asia's and Europe's turn now. Let's see what they do.

(Thu Jul 03 1997 20:36)
Personally It wouldn't bother me if gold fell to 35.00 an ounce, because then I could afford to stash away about a ton for the "reckoning day" which is surely coming. The fact is that politicians get elected by "buying" votes. First they "redistribute" money to those who support them and when that's not enough they resort to printing more of it.

Eventually they'll print so much that inflation will start to consume peoples life savings. Now most people are not fools. When they see their saving becoming worth less and less due to inflation they'll trade their cash in on something that will hold it's value ( gold, silver, etc ) .

Basically it all boils down to whether you trust politicians or not. I do not.

So let the bottom fall out of the price of gold. I'll still be buying it as fast as I can.

(Thu Jul 03 1997 20:36)

Aurophile - I definitely have no desire to get into the squared circle
with you again. ( Oh, welcome back, by the way. What a glorious
day to be alive, in the time of threetwofive. )

But human nature is never going to fundamentally change until
humans stop dying. How do you ( or I, or anyone ) recognize
a change in human nature? Human nature is never going to
change as long as humans define human nature. If we left
the definition up to crocodiles, for example, or dolphins, they
might have very different milestones for changes in human
nature than we give ourselves.

Below 324
(Thu Jul 03 1997 20:38)
@ Dr. W
It traded below 324 in 1985. 12 yrs.

Mike Sheller
(Thu Jul 03 1997 20:40)
phenomenal observation
AUROPHILE: Astute observation re Human Nature. Phenomena will always abound. Human psychology and reaction to same changes at an excruciatingly slow pace, if noticeably at all.

Mike Sheller
(Thu Jul 03 1997 20:41)
blessed event
FRONT: Congrats on the grandchild. New beginnings are always beautiful. Blessings.

Strad Master
(Thu Jul 03 1997 20:46)
FRONT: Words can't express how wonderful it is to know of your blessed event. Your return to Kitco makes it doubly joyful. E-mail in your box! Welcome back!

(Thu Jul 03 1997 20:47)
FWIW -- GOLD UP $1.80 on EBN.

(Thu Jul 03 1997 20:51)
Tanami: Yep i'm an old thinker, pushing 40. I am considering giving up on working in the mining field and retraining in something else. But have you ever held shares in a bank that went insolvent, I did once. As the laws of economics are in the process of being repealed, looks like I should toss my old Economics books in the dumpster, along with my copy of the Intelligent Investor by B. Graham.

(Thu Jul 03 1997 20:51)
The TWA-800 answer is in;

(Thu Jul 03 1997 20:52)
TANAMI: I have read your post twice and have an opinion of the future that is significantly different than yours. You can contact me directly if you wish.

(Thu Jul 03 1997 20:56)


What a grand and glorious day. Born on the third of July.

(Thu Jul 03 1997 21:03)
One uncluttered Thirty Year Bond chart. Boy is it tough to erase all those lines! Same triangle, give or take. This looks like the test here. Wild swing in rates this week. Do rates go lower or higher? Place your bets. Inflation? Deflation?

(Thu Jul 03 1997 21:16)
escher: Things always are darkest before the dawn. And for gold it has gotten pretty dark. But, the law of the market that what goes up must come down has not been repealed. And one of these days.....

(Thu Jul 03 1997 21:18)!
More third world gold and crap to go with it.

BBL maybe, damn thunderstorms and tornado warnings.

(Thu Jul 03 1997 21:19)
GOLD up $2.00 on EBN... bye............

(Thu Jul 03 1997 21:33)
Selby & Donald .... You can get both Can. and U.S quotes and some other options at It's pretty good if you don't need
live quotes.

(Thu Jul 03 1997 21:38)
Is the 2/3 held in private hands in tradeable form or carat, Last time I checked the carated form cost 700 to bring into tradeable form. So is the 2/3 above ground supply really supply. The real supply of gold is deriviative and not real but has been keeping the price low while the same phenomena has been the gas to financials. WHAT ISTHE POTENTIAL SUPPLY OF STKS AND BONDS AS A % OF GDP VERSUS REAL NON JEWELRY GOLD???

(Thu Jul 03 1997 21:39)
by Shawn Connally

The millennium bug and its chaotic implications are being taken
seriously by at least a portion of the companies it will affect. The
government is putting together a plan of action and a budget, and
small companies are hiring Cobol programmers to rewrite line after
line of code, but what are the implications for Wall Street?
Well, for starters, companies who've aligned themselves as part of the
Y2K solution-- and there are bunches-- are seeing a sharp rise in stock
prices. Wall Street has jumped on the Y2K bandwagon just as it did a
year or so ago with Internet company IPOs. But is Wall Street itself
ready for the millennium bug?
The New York Stock Exchange began its own Year 2000 project way
back in 1987. So far it has spent $29 million updating its systems. But
experts say it may be a day late and a dollar short.
"I see a major correction as investors internalize the threat, a crash as
bank runs and other panic activity takes place, and a depression in the
wake of Y2K," predicts Tony Keyes, an authority figure on the Y2K
playing field.
And others agree.
"When it dawns on Wall Street that those highly predictable rising
earnings are going to actually fall due to unplanned Y2K projects and
snafus, the Street is going to be very disappointed," predicts David
Eddy, founder of the Software Sales Group, which focuses on Y2K
solutions. "In my personal experience, financially oriented people are
essentially incapable of grasping the significance of Y2K impacts.
"To date, what I've seen of Wall Street's reaction to Y2K is to drive
some Y2K stocks into the stratosphere based on perceived promises
of the expected silver bullet solution. It's simply un-American to admit
that there's just not going to be a simple, quick fix for a problem of this size and complexity."
No cheap fixes
Keyes says very soon it will be profitable for a company to proclaim its
"Y2K compliance." This will show up the company's competitors and
exclaim to the world that the company is ahead of the game, on the ball
and ready for the next century.
"Insurance carriers and financial institutions such as larger brokerage
firms will be the first to proclaim their Y2K status as a market
differentiator," he says. "Once this begins, other Fortune 500/1000
[companies] will follow. Soon it will be extremely unfashionable to be
quiet on this issue."
Market shutdown unlikely
And while everyone agrees there will be problems-- some drastic-- no
one's really saying there will be a total halt to the financial world. But it won't be cheap.
Lloyd's of London underwriters recently estimated that lawsuits arising
from the dreaded millennium bug will be upwards of $1 trillion in the
United States alone, according to a San Francisco Chronicle article.
"My decidedly cloudy crystal ball indicates that the world will not simply stop on one of these magic dates," says Eddy. "I see Y2K as a
process of boiling the frog, starting in cold water.
"While I know Wall Street is where a lot of people are potentially
worried about Y2K impacts, personally I'm less concerned," he adds.
"Wall Street ( and ) financial firms are completely accustomed to
operating in constant crisis mode and they're not afraid of throwing
tons of money at computer problems."
But that's not to say the Y2K hype isn't without its merits, especially
where big corporations are concerned.
"I'd venture a guess that most of the current boardroom management
will not survive Y2K," Eddy continues. "Certainly the largest of Fortune
1000 companies will be savaged by Y2K snafus. From my experience,
the biggest of the big are typically least capable of dealing with a
problem like this."
Consultant Paul Strassmann's article for Computerworld on the
millennium bug.

(Thu Jul 03 1997 21:41)

Oh, what a tremendous day it has been, both for me and
for Instep. ( Isb on some exchange, I forgot which, when
I went to look it up on secapl using c.isb, it said "unknown
symbol", so either I forgot or they are defunct. )
I am so happy that I barely noticed how the
new dictate burning up the E-mail wires among the Kitco corps
is "Ignore him, maybe he'll go away. This too will pass."
Guys, I think you should stop treating Scott that way.

Yes, all fame is fleeting, fron't wilter non, Met Wo, c'est la vie,
etc., but with the "THREETWOFIVE Book of Goodness"
you can relive the glorious autumn, winter, spring, and summer
of what some have called "Either the biggest scam or the
most uplifting moment in human history, similar to Ruth pointing
towards the left field fence, had it actually happened"

Remember this shining moment?

"Earl, Earl, Earl - I hesitate to repeat myself"

Or this one?

"Earl, Earl, Earl - I hesitate to repeat myself" ( oops, the
record skipped )

Relive the epic battles, the dressing downs, the devastating
one-word responses ( "Prognostictor - No" ) , all part of one
man's epic struggle to save a nation and change human
history forever.

All for an increadibly low price of $3.25
"Not available in bookstores. This offer ends at midnight."

(Thu Jul 03 1997 21:46)
I would like to sell 200 tones of gold at $1 a ton. Any buyers??????

Question: What do you do when fake gold watches are worth more than real gold watches?

I reckon that a visit to Asia and buy all fake things you can because the world has gone insane and they will soon be worth more!!!!!!!!

Oh yeah, my gold stock did not drop any from yesturdays king hit mmmn ?

(Thu Jul 03 1997 21:48)
tanami@science fiction: Interesting post at 20:14. I too have read it two times. I am wondering what age you are just as you wonder what the age is of most posters here. Did you just finish your Masters thesis in the "paradigm of robotic intelligence"? And I do not mean to be disrespectful, I am truly curious as to your background. I would also be interested in what you mean by "the first order effect is the conversion to the digital paradigm which seems to transit in 4 month multiples"? To be fair I should tell you I am 71, a student of markets since 8th grade, econ degree from a major university, and while my investments have not made me filthy rich I have made a few bucks along the way. I should also confess, I have a little suspicion you are really putting us on, at least in part? ;- )

(Thu Jul 03 1997 21:53)
@Bachelor of Information Technology, Diploma of Business.
I'm no financial wizzard! Just a lame gold invester.

(Thu Jul 03 1997 21:57)

Your comments are, for the most part, unassailable and while most of us are probably in the age range you have suspected, we are not averse to technological change. We aware of its implications and embrace those elements which serve our needs.

Since buying my first computer in 1983, I have subsequently upgraded every 3 years since then. I cannot imagine my world without the damned thing. In my opinion, the individuals on this site are certainly more cognizant of the world around them than the average yuppie and probably take greater advantage of technology in the process. Only an obscure Luddite would find comfort in building charts by hand.

For all of that though, we, goldbugs, have not lost sight of fundamentals. Not for a moment. Those fundamentals trascend gold. The metal is nothing more than a physical manifestation of the underlying value. That is, that any medium of exchange should remain tamper proof and beyond the effects of jiggling by others who would do so for their own benefit. I know it's silly for any of us to continue with such outmoded notions but there you have it. For better or worse.

We understand quite clearly the implications of 'silicon value'. Of sums of value neatly stored and placed in electronic vaults. I think we also understand how much more efficient world commerce can become as a result. No question about it. At the same time, we also understand that the relationship between those silicon numbers and our continuing ability to meet our daily needs is completely beyond our control. In other words, the value of the numbers, in terms of canned tuna or heart surgery, is to be determined by others, for reasons that we may or may not agree with.

For example, the value of our silicon store of value may be "adjusted" for silly political reasons. Something as childish as say; the Japanese Prime Minister's refusal to wear our proferred cowboy boots and in the process, embarrass our maximum leader. The example may be facetious but a rational view of the people who determine those values for us is not a cause for encouragement.

In my opinion, we are, unfortunately, bearing witness to perhaps the last battle between gerrymandered currencies and *value* that is beyond the pale of the tamperers. I choose the word "unfortunately" because we are caught in the middle of it. The stakes are high and we are not presently doing well. At the same time, the battle is well joined and the foe has sown the seeds of his own defeat. Though many of us will likely not see the final tactical manuevers. It sounds like another of those stupid crusades and in many ways I suppose it is. At the same time we are engaged in this presently foolish enterprise to make a buck. Most, I would imagine, find themselves involved as result of not knowing the depth and scope of the field of battle. We engaged too soon and now find ourselves enmeshed in something far beyond our original field of view.

Withdraw? Or see the thing through to its conclusion? A question on the mind's of many this weekend, I'm sure.

In the end, the silicon money of the future could just as well represent ounces of gold or platinum, accounted to individuals, as well as it currently reports, to the penny, the debt of nations. Which is what the present silicon money does, indeed, represent.

(Thu Jul 03 1997 22:03)
Tanami : I second goldbug 23. Can you please rephrase your post in simple words.

(Thu Jul 03 1997 22:04)
Some light reading:

COMMENTS OF THE DAY: Commodities, including precious metals, were lower on Thursday, with gold hitting the remaining sell stops and facing a frenetic new round of speculator short selling to briefly touch $323 per troy ounce, its lowest level since early December 1985. For the day, gold futures were down $7.10, with silver dropping 7.5 cents, platinum lower by $2.00, and palladium declining $1.50. Australia has reduced its official gold reserves from 247 tonnes to 80 tonnes, and has declared that it is done with its gold selling. Since COMEX gold futures open interest data for today's trading will not be available until Monday, it cannot yet be officially established, but it is likely that the commercial net long position is the highest ever and that the speculator net short position is also a record. Since the market was created for the benefit of the commercials, they will have the final decisive say. Gold mining shares were only slightly lower as the implications of the inevitable speculator short covering become increasingly apparent. Nearly unanimously bearish analysts' commentary combined with heavy gold equity put buying is also continuing to provide support for the shares.

(Thu Jul 03 1997 22:05)
Food for Thought

Gold Mining Outlook

by Steven Jon Kaplan

Be sure to check in Monday evening for the traders' commitments.

Updated @ 5:10 p.m. EDT, Thursday, July 3, 1997.

COMMENTS OF THE DAY: Commodities, including precious metals, were lower on Thursday, with gold
hitting the remaining sell stops and facing a frenetic new round of speculator short selling to briefly touch
$323 per troy ounce, its lowest level since early December 1985. For the day, gold futures were down
$7.10, with silver dropping 7.5 cents, platinum lower by $2.00, and palladium declining $1.50. Australia
has reduced its official gold reserves from 247 tonnes to 80 tonnes, and has declared that it is done with
its gold selling. Since COMEX gold futures open interest data for today's trading will not be available
until Monday, it cannot yet be officially established, but it is likely that the commercial net long position
is the highest ever and that the speculator net short position is also a record. Since the market was created
for the benefit of the commercials, they will have the final decisive say. Gold mining shares were only
slightly lower as the implications of the inevitable speculator short covering become increasingly apparent.
Nearly unanimously bearish analysts' commentary combined with heavy gold equity put buying is also
continuing to provide support for the shares.

(Thu Jul 03 1997 22:06)

Earl - Great post. Based on your response to Tanami,
I would say the reasons you continue to hold gold
are cognitive dissonance coupled with a stubborn streak.

Bill Buckler
(Thu Jul 03 1997 22:08)
NotaGoldbug ( jul 03 20:26 ) What would I have done. I would have been buying Gold with both hands, just as Hashimoto has "threatened" to do. As a Central Banker, I have a primary responsibility for the future of all the citizens in my nation. I control both the value and the amount of their money.

Government's are people. Yep, so are you and I, NotaGoldbug. But a central banker is not just another "people". He or she has a great responsibility, a responsibility that has been deplorably reneged on, just as Greenspan and Co. have reneged on theirs.

To put this in perspective, when the head Geologist for Bre-X announced that there was 200 million ounces of Gold in his "mine", the price went up a bit. Would you call that "manipulation". Of course, he was subsequently proven "wrong".

When a central bank of a "Dollar bloc" nation which happens to be the third-largest gold producing nation in the world announces a Gold sale, and he does it knowing the primary fear in the gold markets is central bank sales, I call that "manipulation". When the central bank does it on the last day before a long weekend in the U.S., having already sold the Gold so the price drop will not affect the sale, well, what would you call it?

The difference between the head of Bre-X and the head of the Aussie ( or US ) central bank is that the Bre-X chief doesn't control anybody's money. He receives it voluntarily. A central bank chief control's everybody's money. And no one has any choice in the matter.

BTW, the Aussie reserve bank is going to use the proceeds to buy U.S. ( and German and Japanese ) debt paper. It pays interest, which will all go to the Aussie govt to battle their budget deficit.

Charts are up at my site now, commentary will take a bit longer.

(Thu Jul 03 1997 22:09)
Panda: Your chart is clearly showing the much dreaded "Auroelf Triangle". More deadly than the Bermuda variety. It always breaks to the flat side .... but in recent history..... only for the goldbugs. However, perhaps truth and justice will prevail and the "Good Guys" will win this one. Eh?

(Thu Jul 03 1997 22:14)
John: I find your personal behavior so reprehensible, so childish in the extreme, that any response on your part to anything I write is fully taken as an insult.

(Thu Jul 03 1997 22:17)
OBSERVER ( Food for Thought: Good to see that you read the same reports as I do. Whats your thoughts on the posting?

(Thu Jul 03 1997 22:19)

Earl - I'm sorry you feel that way. It means I don't even
have to exert any effort to insult you.

Earl, did you notice the price of gold today?
Let's see, who called that? What it someone named Earl?

(Thu Jul 03 1997 22:21)
The rise in gold at the present time seems to coming from Hong Kong ( maybe ) . Look at kitco 24 hour spot price and notice the increase as HK market comes on-line.

George S. Cole
(Thu Jul 03 1997 22:22)
same wavelenght
MOONEY: We are still on the same wavelenght. If bullion rallies strongly next week on heavy volume and with the gold stocks participating, we are on our way. A weak rally means more downside fireworks quite soon. But another spike lower or not, this bear market is nearly done.

(Thu Jul 03 1997 22:24)
@ Donald
Donald: 5 stars for best joke of the day ( warehouse joke ) !!!!!
I too thought there might be an inflationary spike upward before the economic collapse began. Now, that scenario looks unlikely. The downward spiral is gaining momentum so quickly that deflation is gaining the upper-hand.

(Thu Jul 03 1997 22:31)
George S. Cole: Jeeeez George. A spike here, a spike there and pretty soon yer talkin' serious damage. .... ( :- ) )

(Thu Jul 03 1997 22:34)
With a lot of old-timers returning to Kitco tonight, no doubt because
one of their own called it, a truly momentous occasion ( And please,
I can't even begin to answer all the E-mails showering me with
accolades, you're just going to have to wait ) , it makes me kind of wonder
if Oldman is among us. Remember how he always used to talk about
how reliant he was on his computer, and how many upgrades he'd gone
through? Dagnabit, that search function is on the fritz, or I would look
up and see how many upgrades he's gone through. Maybe he's
due for a new upgrade, heck, maybe he's upgrading right now
and that's why he can't be here.
I remember when he thought $349 was the bottom.
We would sure have a good chuckle about that one.
My, what memories.

(Thu Jul 03 1997 22:34)
George S. Cole ( same wavelenght ) : I would have to agree, the downward spike is due to CB Aussie sales ( 2 billion dollars ) which made front page of todays paper, and short speculating. Take these two ingredients out of the market next week and we may have somthing. At the current spot price, investors don't need much excuse to start buying. Perhaps a rally of four to five dollars will make the OBSERVERS come out of the closet and begin a rally. Once the rally starts, I think momentium will carry gold to $350 at which time I would be tempted to sell due to profit taking.
At $350 the market will correct back to low 340s at which time I will become bullish again and buy. Unless somthing out of the ordinary happens, when gold rallies, you will need to cash in quick before a correction occurs. Its what I call a frenzy profit taking spree!!!!

(Thu Jul 03 1997 22:34)
George S. Cole ( same wavelenght ) : I would have to agree, the downward spike is due to CB Aussie sales ( 2 billion dollars ) which made front page of todays paper, and short speculating. Take these two ingredients out of the market next week and we may have somthing. At the current spot price, investors don't need much excuse to start buying. Perhaps a rally of four to five dollars will make the OBSERVERS come out of the closet and begin a rally. Once the rally starts, I think momentium will carry gold to $350 at which time I would be tempted to sell due to profit taking.
At $350 the market will correct bck to low 340s at which time I will become bullish again and buy. Unless somthing out of the ordinary happens, when gold rallies, you will need to cash in quick before a correction occurs. Its what I call a frenzy profit taking spree!!!!

(Thu Jul 03 1997 22:36)
@Congrats FRONT
Front, a slightly belated mazal tov ( congratulations ) on the birth of your 1st granddaughter. Taking my 1st to London for her batmitzva ( confirmation ) soon.
It's a grand day for grandpas and grandmas!!!

(Thu Jul 03 1997 22:41)
@another note
Haven't heard a crowing rooster in some time, but then I never did like their sounds that much. But when on the farm one has to learn to adjust to the sounds and smells. 325, over and hopefully out.

(Thu Jul 03 1997 22:43)
john: congratulations on achieving your long hoped-for goal of becoming the tyson of technical analysis. you must be so proud, and by your own admission. we all recognize you for what you are.

(Thu Jul 03 1997 22:44)
Don't bother upgrading your computer unless it is to a Pentium II 233Mhz. Prices are going to fall this quater and if you upgrade now to say a Pentium 200Mhz MMX, you will be wasting your money. By the way, AMD and Cyrix ( processor manufactures ) are making significant headway in sales at the moment compared to INTEL. If we don't see a crash this year, AMD would be my pearl for profit. INTEL is going to be a loser and maybe the DOW.

(Thu Jul 03 1997 22:46)
John : You said you are a government servant. Rubin is the one entitled to some ( in Hashimoto's face ) chest thumping on today's action in the gold market. As remarked by Ted Buckler, this was a well orchestrated and masterly coup in the gold market, not dissimilar to a historic raid by Rubin in the Forex markets in support of the dollar. Just wondering if as a government servant you are not a planted mole assigned to thump Rubin's chest in proxy. If so, you have done it very well and now it is time to stop.

(Thu Jul 03 1997 22:46)
We received a couple of answers to my quiz re Lord Keynes.
"in the long run we are all dead" was, I think, the last
phrase of a sentence refering to slow inflation beginning
during the 1930's. He ofcourse was correct, except for
the children that FDR wanted to protect ( as did every other
politician since Augustus Ceasar, I suppose.

So, here is a multiple choice question ( you get extra credit
for answering it; you can buy spot gold at $325 )

A country loses a war to a visious enemy. The losing
nation can expect the following to be carried off to the
victor's homeland:

A. bank letters of credit
B. bank notes
C. promises to pay other notes
D. nubile young virgins
E. all the gold they can get their hands on, including
tooth fillings
F. All the paper money extant

I would like to know who is buying the gold? Have you
noticed that gold stocks have remained relatively stable
these last two weeks?

(Thu Jul 03 1997 22:46)
Don't bother upgrading your computer unless it is to a Pentium II 233Mhz. Prices are going to fall this quater and if you upgrade now to say a Pentium 200Mhz MMX, you will be wasting your money. By the way, AMD and Cyrix ( processor manufactures ) are making significant headway in sales at the moment compared to INTEL. If we don't see a crash this year, AMD would be my pearl for profit. INTEL is going to be a loser and maybe the DOW.

(Thu Jul 03 1997 22:47)
Steve Puetz - After the crash, what if the worlds governments all
go to some form of smart card money? There is much talk about the current
bull market or precious metals. What about plan C? Some form of E-Money
where all transactions can be traced and even the personal buying and
selling of gold would be tracked.

The end of privacy.

(Thu Jul 03 1997 22:51)
just passing through
john;Thu Jul 03 1997 21:41 here's that info you were looking for, however, this does NOT require you to buy and/or sell said investment. That choice is ALWAYS yours. Due dilligence is always required. I happen to own a few shares as it seemed promising to me, however, it has not panned out as well as I had hoped for when I bought it. O well, it's near its all time high so I guess I could sell it if I wanted out.

(Thu Jul 03 1997 22:51)

Imagine that, today is Thursday. Who said they could release employment numbers on a Thursday anyway?

On a related topic it appears that either the Hash man cometh, or someone else is doing a good impersonation. Another 4 billion worth of U.S. paper was sold last week from the Fed's custody account. It had long been bandied about here by myself and others that the massive inflows into our paper from foreign CB's was the major force behind the bubble. It does appear that the air is starting to leak. That bonds would make it all the way to key resistance ( see Panda's chart ) but no more while gold disappeared off the bottom of the chart, is not a good sign for bonds.

The selling at the close of Comex trading was engineered by one seller. About 300000 ounces of gold ( paper ) and 5000000 ounces of silver ( paper ) were dumped on the market in a matter of minutes. The intent was clearly to drive the price down. No one trying to exit a position would blast away at the market while everyone was shutting down and heading for a long holiday weekend. This selling was most likely linked to the put buying over the last few days. Watch close now at how the market reacts. If the bounce is strong and the sellers get hooked it will snowball and the bottom will be in. Last I looked the price at EBN was 326.

J.Cat: You will have to suffer my presence for another evening. What do you one ounce says 325.10 or better on the London PM fix monday? BTW: If you've got Earl pissed at you, perhaps you ought to tone down the rhetoric. He's pretty easy to get along with, and his displeasure is meaningful.

(Thu Jul 03 1997 22:53)
What a day!
Those of you who have read my mad ramblings of the past month know that I have called for lower gold prices from $348 down. I covered 2500 oz at $334 kept 2000 oz and put on another 500 oz at $338. As I expressed earlier this week, I was looking for $330, maybe $329. Never in my fondest hopes did I expect $324. I recall backing down from a few wagers from folks who expected to see $350 before $325. I am still glad I did not take those bets. I honestly couldnt see $325 this go around. Now for the first time since I began posting to the group, I hold no gold shorts - except for one client who I couldnt get in touch with today who has just 100 oz. I waited for the close to get out, knowing that these were fresh shorts fueling this drop and that it was extremely unlikely the new longs would be put in going into a holiday.

I expect Asia and India to buy it back up 6 - 10 dollars by Tuesday at the latest. I will look to place new shorts above $335, $340 if I can get it. I do believe now we will see $300 in the next couple months, unless lease rates rise to prohibitive levels. With all my bearish talk, I take a conservative approach to this market. My clients made better than 150K in the last month on gold shorts, but the time has come to pull em all. $324 was a gift, and I am not ungrateful. Beware of buying gold until the dust settles. There will be plenty of gold for all at $300 and you wont have to wait long. No, I will not take bets on $300. I would treat a wager the same as a client, I dont need to find tops or bottoms. As long as I get near them, Im happy. I would love to gloat a bit, but those who gloat believe too much in their own press. I never saw $324, I Just hoped for $330.

(Thu Jul 03 1997 22:53)
Gold is used in computer processes: The new generation of Pentium chips include the level 2 cache memory in a cartridge. So, one might say a processor manufacturer may need more gold in the near future mmmnnn. Memory manufactures are well .... whats the Dow doing ??? What I'm getting at is that the current technology stocks are going to move a bit towards the end of this year, primarily due to changes in the way computers are constructed ( designed ) . When traditional companies profits lose ground, it might give reason for a selling spree mmmnn DOW where are you!

(Thu Jul 03 1997 22:54)
Bill Buckler : I was indeed referring to you in my last post and called you Ted Buckler by mistake. Please accept my apology for the gaffe.

(Thu Jul 03 1997 23:00)
What I am saying is significant to gold as the market is driven by commercials ( long term ) . The computer processors are much bigger and contain more gold. When the Pentium II chips are in full flight, gold is going to be on demmand more than is needed today. Whats more, is that the Pentium II chip requires a new motherboard which also requires gold. Next year gold is going to be under great demmand as everybody makes the move to new technology. $325/oz HAHAHAHA You wait and see!

Pizza Man
(Thu Jul 03 1997 23:00)
Crowing Rooster
John: Congratulations! Good call. Enough crowing for now, how about
your prediction for the next 2 weeks. I'll bet you I can make a large
Pepperoni Pizza faster!

(Thu Jul 03 1997 23:02)

What a day!
I guess that really sums it up, doesn't it?
I probably could gloat at this point, but somebody just exhausted
the five-minute gloat quota. Did the temperature just drop imperceptibly,
or was it me?

(Thu Jul 03 1997 23:05)

D.A. - Hey. Now who's being unfair?
Re Earl. I'll have to take your word for it.
He's awfully pedantic. Could you apologize to him for me?

George Cole
(Thu Jul 03 1997 23:06)
nearly done
Earl: I meant nearly done TIMEWISE. If we get another spike down, I suspect we may drop as low as $310-$315.

Glenn: Would be most interested in your take on today's developments.

(Thu Jul 03 1997 23:09)

What's the problem? When I last offered the bet spot was at 323.75. All we are seeing now is noise. Last was 325.85 on EBN. If you don't like my markets come back with an offer.

(Thu Jul 03 1997 23:09)
@ Kid Silver
Kid Silver: Historicly, money has been what citizens have wanted, not what governments have wished. Popular heads-of-state always cater to the demands of citizens. Gold and silver will re-emerge as money, not because of government action, but because of popular demand.

(Thu Jul 03 1997 23:11)

Gold in Australia :
1,360.00 = Index :
-68.0 = Movement :
-4.7 = % :

(Thu Jul 03 1997 23:14)

I know, I know, you made millions today. But wouldn't it have been nice to have gotten a bright yellow coin that you could paste to your terminal and tell all your broker buddies how you won it off some guy on the internet? C'mon, what do say 400 before 300, and I'll throw in free engraving.

(Thu Jul 03 1997 23:22)
Pizza Man - Yo dude. I hear ya. But there has definitely NOT been enough
crowing up to this point. The one-man lovefest is going to continue, count
on it. I took it on the chin for 10 months on this site. Not because I was wrong,
but because I was right. I was right from the beginning, and all of the experts
on this site yelled and whined and sent me threatening E-mail and said
really nasty things about my cooking and I survived it. And I am the same
person I was 10 months ago. I never reciprocated and I never backed down
and I never figured out what happened to the rhodium quote ( you could set
your calendar to that thing ) and I kept reaching for the dream. And I hope
in some small way I have made a path for dissenting opinion on this site,
and I have opened the door a little wider for minorities and minority opinions,
and I look forward to tonight's lecture on the Heisenberg Uncertainty Principle
and the Bohr atom. Can you indulge me for a few hours more? Actually
now just thirty minutes. I'm starting to tear up.

(Thu Jul 03 1997 23:31)
Aurophile - Please. Mike was DQ'ed. Can't I at least be acknowledged
as Clubber Lange?

(Thu Jul 03 1997 23:34)
John: Apparently my case rests on your subsequent comments. So it shall. With one additional thought: That a parrot trained to similar utterance would, at once, be similarly incredible, while having the natural advantage of being a delight to the senses and charming to the ear.

(Thu Jul 03 1997 23:45)
Aurophile @22:43: LOL. Well done. Understated for effect.

(Thu Jul 03 1997 23:46)

Earl - Obviously you've never owned a used parrot who was trained to say "Rack 'em" by his previous owner ( a pool player ) . Anyway, if you're a friend of the D.A., well...put 'er there, bud. No more goading.

(Thu Jul 03 1997 23:51)
For all you "bubble watchers"......the Thai market has gone from pauper to boom to bust and working on boom again ( after the Thai govt devalued the Baht ) . Here's an interesting article of some poor slob trying to make a killing on the Thai market. How many identical slobs are trying to do the same with the US stock market?

(Thu Jul 03 1997 23:58)
Pardon the moralizing
I first started to trade metals in 1984, which makes me a child by comparison to some here, but hardly a neophyte. I have seen many come and go, some with a few shekels left in their pockets, others with broken spines to match their spirits. After awhile one begins to recognize certain types who are more susceptible to failure than others. While this can be a widely varied group, none fail as consistently and thoroughly as those who think they can predict tomorrow. One may have an educated goal, but he claims to "know" what no one on earth could possibly know. When this unfortunate souls wishes come true he will often believe that his knowledge and conviction made it so. These types have never truly understood the stopped clock correct twice a day analogy, no, these people believe they "know" or "knew". It is an amusing pastime to those of us who have survived in this market for years to keep our eyes on these sad people who believe the world moves because they want it to. We will sometimes wager on the timing or extent of the final fall that awaits all who think they can predict these markets. Like the unsophisticated gambler who wins a few rolls of the dice and then bets the farm. It is longevity and consistency that earn respect, not shouts of "RESPCT ME", as these are usually borne of insecurity. Another common trait to these unfortunates is that they can call it all, but never with any cash on the line. This mental masturbation inflates their feelings of self worth while becoming ever more pitiful in the eyes of those whose intimate familiarity with these markets realize, that none "know" anything about tomorrow. One cannot even know if one will awake tomorrow. The saddest part of all is that those who need to lean this undeniable fact, deny they need to lean anything, for they already know.