Gold Discussion for Investors and Market Analysts

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(Mon Jul 07 1997 00:05)
Re:Gold buyers

REB: Maybe analagous to the Tiger Fund with Palladium, except on a much grander scale? Who knows. That's no crazier than a lot of other recent market events.

Strad Master
(Mon Jul 07 1997 00:06)
Evil Omens
ALL: There was an article in the LA Times today about how since the handover of Hong Kong there hasn't been a sunny day. In fact, it has rained non-stop and over 100 inches have fallen! A Buddhist shrine was washed away and a caretaker killed. Initially, at least, rain was considered a good sign as rain is thought to be associated with money but now this deluge has got the feng-shui practitioners thinking that maybe it isn't such a good thing after all.
Along the same lines, there was an article in US News and World Report about the birth in Israel of a pure red heifer. Those who know their Biblical scholarship will be aware of the significance of it - which is too long to go into here. The bottom line of the story, though, was that there hasn't been a pure red heifer born in Israel in some 2000 years of watching for it. According to the article, some of the more radical Orthodox are taking it as THE sign from God that the time has arrived to blow up the Mosques on Temple Mount. Other Rabbis have detected a few white whiskers which they claim invalidates it's purity ( in other words they are trying to diffuse the situation! ) Wouldn't THAT make for some intersting times? ( God help us all! ) As Cherokee says, flux is fluxing away and all it takes is for an unexpected event to push things over the edge.

(Mon Jul 07 1997 00:17)

EBN: Yen down to 112.60. Gold down $4.70 to $319.85. Nekkei down 1.1%.

Strad Master
(Mon Jul 07 1997 00:20)
ALL: EBN Gold down $5.05!

(Mon Jul 07 1997 00:28)
VRONSKY: You were terribly ingracious to NotaGoldbug. Why are you so irritable and insecure that you must attack people in this public forum? If you are a bona fide publisher, you must expect people to question your opinions. In the past two weeks you have run ( at least ) 2 people from this site with your defensive invective. Stop being so thin skinned! Perhaps you offend many others here with your constant barrage of free advertisements; but most of us are gracious enough not to mention it. Do yourself ( and us ) a favor...and chill!

(Mon Jul 07 1997 00:37)

Strange images from Pathfinder Http://

(Mon Jul 07 1997 00:38)
Anyone who has been following my commentary for the last year or so, will have noted two things. 1 ) I am long term bullish and generally optimistic that Gold and Silver have good long term value at recent historical levels. 2 ) Although Aurophile may be right that only a few participants here have been outright short, ( I stated previously that that was against my religion ) , I have steadfastly maintained a cautious outlook since last summer when I said that if Gold broke $390 and especially $388 'Look out below". Since that time I have been ocassionally saying that the chart looks sick. Well, as everybody now knows, the chart STILL looks sick! However, I am now going out on a limb in the midst of the biggest debacle gold has seen for many years and declaring ( in the face of all wisdom to the contrary ) that we are soon to be at the absolute lows. I believe that the spike down will go to somewhere between $305.00 and $309.25 and then reverse.
I still stand behind my Thurs. July 3 post,
"As some here have today mentioned, the spike down can continue
for 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."
I've been wrong before but it sure is fun taking a stab.

(Mon Jul 07 1997 00:39)
Oops.Try this

(Mon Jul 07 1997 00:54)

IMO The gold mrkt is now discounting the knowledge that cental banks are going to sell their gold. Shortly, I expect an announced gold sale to cause gold to rise at it means there is one less to make a sale. There were 20% bulls in gold at NY's Thursdays close; I can only wonder at what the % will be 1/2 hour into Mondays comex gold trading.

(Mon Jul 07 1997 01:06)
This is one unbelievable chart.

(Mon Jul 07 1997 01:09)
Gold down $6.60 Silver down 5.50c. ( was 8.00c. )

(Mon Jul 07 1997 01:12)
ugh 318, my gosh. One of the wire reports said that margin calls were increasing current selling. Could there be that much on margin, or is there any way to quantify this?

(Mon Jul 07 1997 01:13)
On the hourly update

Gold down $6.93, to $317.62. Nikkei down 275 or 1.4%. Yen @112.49, down 1.61Yen, a 1.4% drop.

(Mon Jul 07 1997 01:17)
OZ Gold Index down 5.44% today. Currently at 1294.7 -74.5
3 days ago 1428 down 133 pts overall for 9.3%
Approx $1.5billion wiped of stocks in 3 days.

(Mon Jul 07 1997 01:21)

Someone asked if it would be fireworks or ho-hum. Are we witnessing a tit-for-tat tonight? Everything is going against Japan-lower gold, lower dollar,lower Nikkei. Is Greenspan sending them a message?

(Mon Jul 07 1997 01:23)
Nick: Those brilliant guys and gals at the RBA may do us all a favor by showing what will happen if all the rest start selling. there is 30,000 tonnes of gold sitting in central banks. i think they're stuck with it.

(Mon Jul 07 1997 01:26)
auric: "you want gold hashimoto? here's some gold." plop.

(Mon Jul 07 1997 01:28)
John 22:31 : 1 ) Gold is different then sportscards - 1 has a limited
supply 1 doesn't. '63 Ferrari GTO's - that's like gold, well its really
better then gold. '70 Jaguar XKE V12 that's more like gold. There will
always be a few who want them - but the prices mainly moves when the "public"
decide they want one.
I think #2 has been answered - gold is just 1 of many investment
vechiles. We talk about here because that is what we do here. If you
would like to learn about VMAXs - I can hook you up with the right

(Mon Jul 07 1997 01:37)
it's all over
after over 3 years and lots of money the gold market has just about hit
bottom, why you may ask, because I just sold my futures contracts. Like all
bottoms its when you just can't take the pain any more.

(Mon Jul 07 1997 01:39)
Fireworks on the 7th.

Aurophile @ 01:26--Agree. My guess is that Mr. Hashimoto sees it that way, as well.

(Mon Jul 07 1997 02:03)
@gold creek
just when it's time to sell to finance the next program ...
well, I think I'll sleep on it..
Thanks for all the insights.

(Mon Jul 07 1997 02:04)
You have a good point.
Mooney - I concede that there was some self contradiction in my trading advice and my subsequent silver purchase strategy. I have some clients who have more speculative blood than others, they like to be in the game. It was these clients who I bought silver for last week. We obviously have not reached a turn around in silver or gold. So much for the Asians doing a bit of bargain basement shopping. While gold still has downside left, silver is very oversold at this level. 4.40 support is very strong with a solid history, Im gonna hafta buy some more. Well see the commercials step in and buy this week. Industrial users like cheap silver, they should stock up a bit. This will be a very interesting week. Platinum is holding very well and, in the face of extremely weak gold, it has held strong. All those who own platinum sleep well this evening. Not even the frenzied pacing of the gold owners in the upstairs apartment are keeping platinum owners up tonight.

(Mon Jul 07 1997 02:04)
hourly update

No major changes.

(Mon Jul 07 1997 02:16)
Central Banks

Since the late 1987 gold high of $500+ to tonights price the CB's have lost well over $120 billion dollars even when P&I on direct goldsales and the interest earned on gold loans is considered.
Probably another $100 billion can be added; as the price manipulation has definately kept the price from going to at least $600 per ounce.
The untold damage that they have placed on the gold mining and the basic metals industry is another point to take into consideration.
All this to keep the credit czars, their maniulated stock markets and the foreign currency markets in vogue.
The crap will hit the fan and either we will be their servants, or ????????????.
Who runs the world's countries????

(Mon Jul 07 1997 02:18)
All The World Is A Stage

Hi RJ-Interesting times these are. This is worthy of Shakespeare. There are great struggles being played out in real time. I couldn't think of a better seat than front row here at Kitco.

(Mon Jul 07 1997 02:30)
IMHO - I have been pondering the 100+ ton sale of gold by the central
bank of OZ all weekend. The midnight local time of the announcement
has been bothering me. From the few small details I have learned, I've
come up with the following prediction: We will hear of at least 1 more
100+ ton sale of gold by a central bank in the next month or two.
Until this weekend - I didn't really know/care if Big Trader was real or
not. BT made for great reading - I really enjoyed the posts. Today I
think BT was real and he is taking delievery of his gold. The problem
is that the sellers ( Austrialian in today's case ) don't have it.

BT claimed to be buying everything available since Febuary ( 6 months ago ) .
Then in June he implied he was taking delievery of it. Maybe he tried?
It wasn't there - just like the PL market they just changed the rules
alittle. Give the sellers a little more time. The problem is that this
is gold - a political metal. The world will react to a change in the
rules, PL it's not.

This gave the sellers a breather, so they go to their local central
banker and ask for some help. Since the "D" word is never acceptable
when talking about gold. The central bank of OZ must help, but it has
a few problems to resolve::
- Should they lease 80% of their gold holding?
- Should they announce they are bailing out naked future players?
- they could just claim they sold it and settle with the locals privately.

The story could of ended here, but it didn't.

The Central Bank of OZ made the anouncement of the sale at midnight local
time?? Then there was the huge short sell on the COMEX gold and silver floor just before a long weekend. Someone is doing unusual things in
this market. Like we say in the lab, "where there's smoke, there's fire."
These unusual things are the smoke. Where is the fire? I figure it's BT.
I don't think the balance of BT's gold has been paid.

The 100+ tons is just a down payment. Now the problem is the balance
and that the local central bank doesn't have any more gold stuff. So,
where is the balance going to come from? The market might be a good
place - if you could convince everyone that gold was going to $250 you
might be able to pick up enough to settle with BT.
I figure the short sale was done by whoever is opposite of BT. If I'm
right here - then BT is real and there are other's who owe him the
physical. He did say he bought everything. Now that the blueprint for
the shorts has been shown I figure the everyone will follow it. Hence,
we will see another large central bank announcement of a sale of thier
gold holdings. I wouldn't be surprised to see a few of these within the
next few weeks. BT is waiting.

(Mon Jul 07 1997 02:34)
Poor Boys 10 Reasons WHEN TO BUY GOLD? 1.Add to positions just before you are committed to a mental institution,buy more during your stay,buy even more when pronounced competent. 2.Buy when everyone else is selling, you're more intelligent than all those losers. 3.Buy when you hear a rumour Soros is buying 4.Buy when the President and directors issue millions of options for themselves, but none for you, they wont let the stock fall. 5.Buy when the stock market crashes you will be rich everybody on earth will be poor. 6.Buy when the currency collapses but you will have to convert back to that currency to make any money? um did I say that right? 7.Buy when your parents talk about Gold day and night and you know their senile but you buy anyway. 8. Buy when you see butterflies after a 40 pounder of vodka. 9 Buy when the postman drops an extra welfare cheque by mistake. 10.Buy when your technical charts give that great buy signal "yes we all know your right again".Now that's what I call poorboys.Happy trails

(Mon Jul 07 1997 02:38)
I would protect my gold mining industry

Nevada do you hear me. According to the Constitution, you cannot issue paper money but you can issue gold and silver coin. I would take all precious metal production and issue back to the companies coins 20% with a face value of five times the gold content, I would keep the other 80% in safe keeping as full backing for the coinage which would then be exchanged equally for the US $ in Nevada. Melting of the coinage would not be worthwhile under these circumstances. Vistor's to your State will take some coins back to their own place of abode and probably find them accepted for full US $ value in their own locals. ACT NEVADA BEFORE THEY DESTROY YOU.

(Mon Jul 07 1997 02:39)
Auric - Perhaps this from Henry V
By Jove, I am not covetous for gold,
Nor care I who doth feed upon my cost;
It yearns me not if men my garments wear;
Such outward things dwell not in my desires:
But if it be a sin to covet honour .

Rather proclaim it, through my host,
That he which hath no stomach to this fight,
Let him depart; his passport shall be made
And crowns for convoy put into his purse:
We would not die in that man's company
That fears his fellowship to die with us

(Mon Jul 07 1997 02:44)
Auric - Or perhaps this:
Let me speak proudly:
We are but warriors for the working-day;
Our gayness and our gilt are all besmirch'd
With rainy marching in the painful field;
There's not a piece of feather in our host--
Good argument, I hope, we will not fly--
And time hath worn us into slovenry:
But, by the mass, our hearts are in the trim;

(Mon Jul 07 1997 02:47)
As I like it

Then again, maybe Lester Flatt and Earl Scruggs would better befit this market! Good night all. Off to bed-AWAY!!

(Mon Jul 07 1997 02:50)
down to the base court where gold grows base...

(Mon Jul 07 1997 02:51)
Red Heifer news:

(Mon Jul 07 1997 02:54)
This is the last, I promise
Old men forget: yet all shall be forgot,
But he'll remember with advantages
What feats he did that day: then shall our names.
Familiar in his mouth as household words
Be in their flowing cups freshly remember'd.
This story shall the good man teach his son;
And Crispin Crispian shall ne'er go by,
From this day to the ending of the world,
But we in it shall be remember'd;
We few, we happy few, we band of brothers;
For he to-day that sheds his blood with me
Shall be my brother; be he ne'er so vile,
This day shall gentle his condition:
And gentlemen in England now a-bed
Shall think themselves accursed they were not here,
And hold their manhoods cheap whiles any speaks
That fought with us upon Saint Crispin's day.

(Mon Jul 07 1997 03:03)
I would protect my gold mining industry

Nevada do you hear me. According to the Constitution,
you cannot issue paper money but you can issue gold and
silver coin. I would take all precious metal production
and issue back to the companies gold coins 20% with a face
value of five times the gold content, I would keep the
other 80% in safe keeping as full backing for the coinage
which would then be exchanged equally for the US $ in
Nevada. Melting of the coinage would not be worthwhile
under these circumstances. Vistor's to your State will
take some coins back to their own place of abode and
probably find them accepted for full US $ value in their

(Mon Jul 07 1997 03:12)
we have liftoff in the yen.

(Mon Jul 07 1997 03:21)
Hourly update

3:00 Kitco time_ Gold cut losses by about $2. Yen is rising! ( I had incorrectly reported Yen was weak ) Dollar took large loss in Yen.

(Mon Jul 07 1997 03:32)
theyare trying to blast the yen through 112. it's not a good idea to be nasty to bobby rubin, boy genius currency trader.

(Mon Jul 07 1997 03:44)
theyare trying to blast the yen through 112. it's not a good idea to be nasty to bobby rubin, boy genius currency trader.

(Mon Jul 07 1997 03:56)
Here is an overlay of gold and platinum for the past 20 years. What was interesting is that the two have been virtually coincident on direction EXCEPT for the current period in '97. PL ( BLUE ) is moving postive but gold is diverging. The only time in 20 years?? Will it continue? ... N.B.: The PL chart has a 0.8 X multiplier for sizing.

(Mon Jul 07 1997 04:08)

Gold at $318.75 ... Dollar @ 112.23 Yen ... European markets to open soon.

(Mon Jul 07 1997 04:37)
EBN gold down 5.90 at 04:30 ET.
Is this a washout or what?
BT played with us!

(Mon Jul 07 1997 05:09)
Here is an overlay of gold and the bond. Both are monthly continuation futures charts. ..... I've drawn in a line that short circuits the 1980 gold spike. It was placed on the assumption that a substantial portion of that spike was an overreaction to events of the '70s. If gold had followed a curve similar to the blue line, the inverse correlation between bond and gold would look pretty good. Until 1985. Judging from the currency charts, the world began to embrace paper in a big way, in 1985.

(Mon Jul 07 1997 05:42)
Berra Quotes

It's deja vu all over again. I would like to thank everyone who made this day necessary.

(Mon Jul 07 1997 05:44)
Gold down 6.2/S&p up .75. And so it goes as natural as a river flows.
Gold may go up sometime b/c supply/demand. As long as people accept paper for goods and services paper will have some rule even if there are crisis. Heard RYO, PGU and ECO possible takeover targets if much lower given reserves.

(Mon Jul 07 1997 05:46)
WW you are right about RYO with Kemess coming on their cap/reserve ratio makes them the cheapest and potential takeover.

(Mon Jul 07 1997 06:08)
Earl: People's acceptance of paper in 1985 makes sense. With Paul Volker wringing out inflation and Ronnie in the White House with FIRM beliefs in limited government, bonds were bound to rally after being killed by the last several administrations.

(Mon Jul 07 1997 06:25)
Gold Panic
Any student of markets will appreciate the current atmosphere of panic selling, negative sentiment, and fear. There is blood in the streets, especially in gold equities. Particularly bullish is the widespread mention of downside targets. I think the $250 number bantered about Kitco is a great sign of a current bottom. Also, the fear has escalated, giving the impression that selling gold short constitutes a "no brainer."

Gold watcher
(Mon Jul 07 1997 06:37)
since '84.

I wonder what Ted thinks. we need him back.

(Mon Jul 07 1997 06:37)
Regarding the current "Blood in the streets" and pervasive negative sentiment, let me say this about that: One could have observed the same enviornment in the stock market in 1975. The market's next bull move didn't get under way for another six years.

Golds current decline is celebrating its second year. For my money I am content to keep my powder dry until a sound uptrend in precious metals is established.

Bill Buckler
(Mon Jul 07 1997 07:14)
geff ( Jul 7 6:37 ) There was blood on the streets on the U.S. stock market in the last half of 1974, not in 1975. Between December '74 and May '75, the Dow rose almost 50% ( 586 to 850 ) . No one believed it all the way up. Of course, 1975 was the year when it once again became legal for Americans to own gold. The $US gold price duly fell 28% over the course of the year.

Aussie Dollar falling even faster than U.S. Dollar overnight. Aussie Gold index down 93 points or 6.87% on July 7. Now that's some chart. Take a look at

I'm sure that Hashimoto is devastated by this fall in the Gold price. After all, he hasn't got very much and he says he is looking to buy some. It sure as hell is getting cheap in Yen terms, and he's losing even more on his $US holdings too.

Bob A
(Mon Jul 07 1997 07:21)
It's back to the drawing board for me. Ihave never been so wrong on a mkt. before. Fighting the governments of the world, the miners and shorters doesn't pay. I'll try to re-gain losses in SWC or is plat. next?

(Mon Jul 07 1997 07:35)

6Pak :

Thanks for your reponse to my article. A point which I did not make clearly enough in the article at Gold Eagle was that the change to the monetary system which occurred in 1971 was so fundamental as to make "before and after" comparisons inherently unreliable. There really is no precedent for the current situation and how gold will react in a modern day deflationary environment. What I am very sure of is that gold gains favour if there is a loss of confidence in the national currency caused by :

1. Inflation ( increasing money supply ) , or
2. A drop in the quality of the assets which back the currency ( primarily debt in the case of the US dollar )

I believe we are headed for the inflationary scenario because of the total lack of objective restraints on the ability of the Fed to create dollars. This weapon will be used to postpone the inevitable day of reckoning for several years, during which we are likely to witness a commodity boom beyond most people's imagination. If you start preparing for the deflationary outcome now you will miss out on this opportunity. Being 4 or 5 years ahead of your time is sometimes a disadvantage ( as those who became goldbugs in 1993 could testify ) .

Having said that, it is important not to be emotionally attached to any position. During the next few months we should start to see growing signs of economic weakness. Q2 GDP growth in the US should be very low, prices will remain flat and a significant correction will most likely happen in the stock market. The key thing to watch is how the Fed reacts to these events. When I wrote the article I stated that 1997 money supply ( M3 ) growth had thus far been maintained at the high 1996 rate of 7.4%. Actually, the figures just released indicate that M3 has grown by an annualised rate of 8.2% during the first 25 weeks of 1997. If the current trend continues we will see 1970's growth rates ( 11% ) within 18 months. These rates could be seen much earlier if the Fed perceives deflationary risk. The more indications of deflation we see, the more the Fed will open the monetary floodgates and the higher the rate of inflation that will eventuate as the illusion is maintained a bit longer.

I reiterate - there is NO LIMITATION on the amount of money which can be created.

Best regards, Milhouse

(Mon Jul 07 1997 07:45)
Morning ( evening ) all: Well its down almost 10 bucks and US soon to open. Will we see $299 tonight or tomorrow? I was quite surprised to see that my shares in Coolgardie Gold have not really gone down much. I guess at 7.5c a share there is not much room eh! The good thing is that in a stock like mine, speculators tend to keep it above water.

(Mon Jul 07 1997 07:46)
Why I do I have this feeling that everyone ( stock, bond, cash,... ) is whistling past the grave yard? Gold down $9.05 and falling!

(Mon Jul 07 1997 07:50)
Panda: Current decline rate puts us at $250 by sometime Wednesday, $0 per ounce in two weeks : ) Fasten your seat belt.

(Mon Jul 07 1997 07:51)
One mine down,

(Mon Jul 07 1997 07:52)
The only things dropping faster than the dollar is the ECU and gold!!

(Mon Jul 07 1997 07:54)
hope I did this right

Here is a good site for stock quotes. When you get there, ignore the "error message", scroll down. Then enter symbol, and click. Enjoy.

(Mon Jul 07 1997 07:55)
Bill's chart ( that he mentioned at 7:14 ) of the Aussie Gold shares IS something else. Sometimes it really pays to be short!

(Mon Jul 07 1997 07:58)

To : IDT and Roebear

Martin Armstrong has been bearish on silver for some time and has made a lot of money for his clients by shorting silver during the past 2 years. The quote that he expects silver to go to $18 once the bull market gets in gear is correct, but he believes that such a bull market will not get underway until sometime after Q1 98 and that there is a good chance we will see silver trading in the 3.25 - 3.50 area before it does. The fundamental weakness in the silver market over the past 2 years is self evident. There have been a number of concerted attempts by hedge funds to push the price up, but each attempted rally has failed dismally.

Regarding commercial demand for silver, I agree that digital cameras won't start taking a significant share of the market for another 12 months yet, but this is a short time frame when you consider the above ground stocks of silver.

BTW, M Armstrong believes that silver going to 3.25 would be the best thing for this market from a technical perspective. The silver chart currently has a double bottom at 3.50 from 1991 and 1993, and no market has ever rebounded to new highs after a double bottom ( don't ask me why - TA is a mystery to me ) .

BTW2, silver may not be a lousy investment at the moment, it's just a lousy trade. There is a big difference.

Regards, Milhouse

(Mon Jul 07 1997 07:59)
@uh oh
This is a curious thing, gold down and the Dollar goes down?

(Mon Jul 07 1997 07:59)
MILHOUSE: In the 1930's we entered a period of competing currency devaluations, mostly done for trade purposes. When England devalued in 1931? ( can't remember the exact date ) there was the dollar, backed by gold, to take the role of the international trade currrency. We have held that role since 1931 and still hold it.

My reason for bringing up this bit of history is to make the comparison to today. There is no country with a substantial currency to take the international role today. If the dollar goes down the tubes today, next week, or whenever, only gold or barter remains. That is why we are in a much more dangerous situation than the 30's. International trade has become absolutely essential to most of the world. Gold is the only "world class" currency left.

(Mon Jul 07 1997 08:00)
It worked!

Re-07:54--Also gives mutual fund quotes.

(Mon Jul 07 1997 08:02)
Bill Buckler: Good Points. To put a finer point on my previous thought:
The mere presence of market panic doesn't seem to be a real good entry timing mechanism. I would rather seem an established trend reversal before getting long.

As a weekly reader of the Privateer, I was impressed by your historical presentation a few months ago of previous gold rallys and your point that there is often been plenty of time to get on board a decent rally. That seems to make sense and thats how I plan to play this next go around.

Keep up the fine work.


(Mon Jul 07 1997 08:06)
Mihouse: Judging from the action this morning, I have the tendency to agree. Anyone think we will get a bounce this week?

(Mon Jul 07 1997 08:09)
Correction re:my 8:02 post--Should read "I would rather see an established uptrend..." Things are tough before the morning coffee.

(Mon Jul 07 1997 08:18)
escher - RE: your 1:12. You ask if there could be much more selling due to margin calls. Many, many futures players buy and/or sell on margin. To many that is the whole point of playing the futures market, huge leverage on your buck. Remember that when most Americans and Canadians last loked at there Comex Gold positions last Thursday morning Glol was about $330. Whether receiving a margin call or not ( many will ) theis sudden and enormous downdraft will scare the Bejesus out of many future players who are long and that is basically why I made my price prediction as low as I did last night, when many others were still sticking with $312-$315. Things can go one of two ways now. We may bottom today or tommorrow or we may go the other way and experience the second shoe dropping before we finally stabilize.
AAR - After seeing $330 on Thursday morning erode to ? on Monday morning there are more than likely going to be many panicky sales this morning at the Comex. It really is time to start the 'layered' purchase plan.

George Cole
(Mon Jul 07 1997 08:19)
The Bottom
Looks like this is the final spike down down. Where the bottom is, nobody knows, but we probably will see it this week. However, as Bill Buckler points out, you can never be 100% sure of a bottom until after the fact. If this week's panic low can hold on a retest after the next bounce, time to say goodbye to the bear.

(Mon Jul 07 1997 08:20)
At what point does the Fed push the panic button on deflation? After all, this would make it a lot easier to 'prime the pump' without scaring the markets too much about inflation. In fact, perhaps the markets would, 'feel better' under this scenario, i.e. no cataclysmic crash. Perhaps a slow bear after an initial bull run?

(Mon Jul 07 1997 08:23)
@New England
What does anyone think of option plays? Avoid the volatility but get the leverage.

(Mon Jul 07 1997 08:27)

Here is a bird's eye view.

(Mon Jul 07 1997 08:27)
Now that NY is about to open does everybody have butterflies this morning or is it just me?

George Cole
(Mon Jul 07 1997 08:29)
the weekend
After this weekend's traumatic events, I now understand why futures players have been very reluctant to hold long positions Saturday and Sunday.

(Mon Jul 07 1997 08:32)
PANDA: If the Fed "primes the pump" how will those countries that hold dollars in reserve react? What will the reaction be to prices of imports into the US?

(Mon Jul 07 1997 08:32)
George - Usually the same thing applies to short positions!

(Mon Jul 07 1997 08:37)
what the ???
What the "h-e-double hockey sticks" just happened on the New York open? Barts 24 hour graph shows gold straight up to 325?!!!

(Mon Jul 07 1997 08:38)
Check out Bart's 24 hour Gold graph!

(Mon Jul 07 1997 08:39)
Gotta be a screwup. EBN still shows 317 spot.

(Mon Jul 07 1997 08:40)
Speed - Now I know how you got your handle! Beat me by 10 seconds! 'Course I took time to copy the URL.

George S. Cole
(Mon Jul 07 1997 08:40)
Two trading lessons from recent gold smash:

NEVER hold a long investment position in a market that cannot respond to good news. This has been true for gold since the bear began.

Negative sentiment is a necessary but not sufficient condition for a bottom in a major bear market. Gold sentiment has been quite negative for some months, but prices have continued to plunge. I suspect that sentiment today is worse than it has ever been, yet the nose-dive continues.

(Mon Jul 07 1997 08:44)
Perhaps this weekend was the absolute low in sentiment, George, and is exactly what the market needed to put in the final lows. We'll soon see!

(Mon Jul 07 1997 08:47)
Bart Chart Restart! ( Just been corrected. )

Bob M
(Mon Jul 07 1997 09:07)
$200s here we come. An intermediate bottom will occur this week, but the long term bottom is still a long long way out..this drop has just begun...

(Mon Jul 07 1997 09:08)
THE $85 BILLION DOLLAR QUESTION (Feds 262 million oz. Gold at $325)
Why has the U.S. - fountainhead of antigold sentiment - NOT SOLD any of its gold while encouraging its allies to sell?? - Coles Market Insights poignant question:

(Mon Jul 07 1997 09:11)
WW: Options is clearly the way to go at the moment. I bought options when AU was at 345. and taking a small loss at the moment. Had I bought the futures I would be in the dumps right now. Options are dirt cheap but it may still be too early to buy....

Steve - Perth
(Mon Jul 07 1997 09:12)
@rampant copying & distributing Harry
Latest from Harry Schultz:
UFO's have taken over. Unidentified Financial Order! That's what we have in the world today. But I think I have IDENTIFIED it! The reason today's markets have baffled the experts for several years, why key indexes have been a record levels of "overheating" without collapsing, why traditional indicators have failed, why no significant correction has occurred, is as follows: Stock markets, worldwide, have always been the domain of bankers, biz men, professional money managers, & a large number of individual investors who "played by the rules" of the game with respect to P/E & dividend ratios, book value, A/D lines, oversold/overbought situations. Then mutual funds gradually invaded the playing field & today DOMINATE it. But they're NOT in control. Why not? Because their rules say they MUST invest all but 5-10% of the money given them by Joe Public. Fundmen aren't allowed to be prudent or diversify. Who IS in charge then? The collective "little guy". The people who put their savings, earning & borrowings into this fund Goliath. Their little people dont play by the rules because they DON'T EVEN KNOW THEM!!!!!!!!!!! Nor are they "investing". They regard funds as savings banks with 20% annual return +/-.......bottom line: for now, DON'T FIGHT the fund momentum.

Steve - Perth
(Mon Jul 07 1997 09:20)
Bob M: You must have been looking at EARL's excellent 20 yr charts. If the bond chart can go up that high, then if the converse works, Gold can get down to the 125-137 level I called a week or so ago ( via a solid rumour via Perth ) when gold was up at 340. Platinum may also follow the same path, if it truly mirrors gold. Maybe the platinum play was a trick to the goldbugs, but failed. It was palladium that had the big surge, really. This is excitement plus. George Cole is right. 8500 here we come. But will the late 97/mid 98 stock "correction" come off, with the big surge to 10-12000 on the DOW?? According to Harry Schultz's UFO's, WHY NOT??? It really scares you when you KNOW the general public ( who I deal with ) wouldn't have a CLUE about PE's etc.

Bob M
(Mon Jul 07 1997 09:27)
A major point that all the stock market bulls have overlooked in their irrational exuberance, is the long term damge this stock market has done to the economy. Stocks have literally siphoned off money that would normally circulate in the economy as everyone is maxing out their 401K and IRA deductions then using their plastic to support their spending habits. The dark side of stocks will be exposed when credit is overextended and the consumer can no longer borrow. Isnt it ironic that stocks rise when bad news on the economy comes out, little does it realize that the slow economy will ultimately cause its death..

(Mon Jul 07 1997 09:29)
With the gold falling and ABX having sold all their production for the next 2years at $400 plus,what reason is there, other than sentiment,for its shareprice to drop?What about the deal with chesbar in Venezuela and that possible huge development, even if a production is a few years away in this country and the low gold price.I think ABX is a steal and chesbar even more so.

George S. Cole
(Mon Jul 07 1997 09:31)
The Bottom
Prediction: Whatever the bottom turns out to be -- $310, $300, $275, etc; -- the consensus ( including here at KITCO ) will be anticpating a much steeper drop.

(Mon Jul 07 1997 09:32)
International market pundit Milhouse questions common-sense of Australias CB selling 2/3s of gold reserves at historically low prices. He foresees higher inflation & money supply - see Guest Guru Milhouse:

George Cole
(Mon Jul 07 1997 09:39)
smart investing
Wonder why the Austalian Reserve bank didn't buy S & P 500 index funds with the poceeds of their gold sale. Now that would really be smart investing! Just ask New Jersey Governor Christine Whitman.

(Mon Jul 07 1997 09:41)
Bob M,you may be right in your last post,but I would like to add one observation,albeit a small one:We had our yearly Stampede here and there where maybe 2000 motorhomes and RV's parked here,which shows me that a lot of people have money and are SPENDING it. ( just not on gold ) What investment will these vehicles be in 20 years time?

Bob M
(Mon Jul 07 1997 09:45)
George- you have been predicting the gold bottom for a long time now..and it hasnt is telling us that a massive deflation is is doing what it does best..a future indicator..other investment vehicles will follow it down eventually

Lan Man
(Mon Jul 07 1997 09:49)
No Quotes Avail.
Schwab indicates that trading has been halted on both ABX and NEM.

(Mon Jul 07 1997 09:57)
@....hooked on psychodelic market mantra
Who cares if gold price drops overnight ? The only price that matters is that which prevails to clear physical supply and demand - equilibrium.

The speculative 'bottom' focus on this thread misses the forest for the trees. The technical indicators may prove self-fulfilling but an exogenous event like the Japs or 'Big Boy' major miners going long big-time would whipsaw the price north like a bat outa hell.

We need fundamental demand-supply laws or commodity price supports to establish a stable gold price range. The CBs have signaled the demonetization of the yellow metal but the industrial and consumer demand still affords it a 'precious' value.

The speculators control the play and the investors have decided to sit on the side-lines waiting for the second coming.

I suggest that investors in ABX, HM, BHP, RTZ, start to lobby their companies to shore-up the gold price. The big global miners have the cash and credit leverage to turn this Mother Bear around ...all they need to do is go long to reverse the trend - preferably by acquiring physical from weak CBs.

The justification would be that the Big Boys could not produce gold profitably at sub300 levels after forward booked sales were satisfied. How many of you are prepared to have your gold company close down without a fight ?

The paper gold market is many multiples of the physical market. It is clear that the psychodelic market mantra of looking for a 'bottom' in gold price is distracting gold investors from the logic of fundamental demand-supply laws.

The price of gold is one that would prevail over a long-term as determined by the laws of demand and supply. Remove the speculative monetary jinx from gold price dynamics and gold price will resume an orderly dynamic akin to copper.

The gold paper overburden inflates and distorts the "real" or physical market flows and begs the question if the self-regulating organizations and global brokers that profit from "trading" securitized gold ( NY, Chicago, London metals exchanges ) have avoided consideration of the "public interest" generally, and gold investors, specifically, during this historic Paper Bull.

Afterall, if the paper gold leverage were not permitted to beyond a nominal multiple of physical flows the speculative incentive would flatten as few players would or could afford to enter the derivative market in gold. Gold would not be a counter currency play or a stk market harbinger as defacto messenger of inflation.

The Big Boys need to step up to the plate and relieve the pressure on gold price.

The worst thing that could happen is for good men to do nothing and 'hope' for the best outcome.

Long gold investors who own the Big Boys should contact Investor Relations and vote with your telephones and letters. The Big Boys need to use their collective cash and credits to shore-up gold and chase the short specs out of this macabre market.


George Cole
(Mon Jul 07 1997 10:00)
gold and stocks
Bob: I certainly have made my share of bad calls as have most here with a few exceptions. But for the last several months, I have been saying that a new gold bull will begin at approximately the same time as stocks peak and I still say this. Both of these trend changes should occur by the end of August. We will soon know if I am right or wrong.

I don't think the recent drop in gold has anything to do with inflation/deflation. Just euphoria about paper, Greenspan and Rubin worship in lower Manhattan, CB selling, and cheap gold loans to short-sellers.

(Mon Jul 07 1997 10:06)
Gold actually having an upward rally at the moment in NY 337-338...

(Mon Jul 07 1997 10:07)
Sorry 317-318 not 337-338 .... wishfull thinking eh!

Paul Smith
(Mon Jul 07 1997 10:08)
George S. Cole

George, you stated " I have been saying that a new gold bull will begin at approximately the same time as stocks peak and I still say this. Both of these trend changes should occur by the end of August."

Why August ? Why not September, October or November ?

It seems all bad news is disregarded and the bull continues on.

What 'bad news' do you foresee ? From what I read, Greenspan will probably once again hold on interest rates in August.


(Mon Jul 07 1997 10:14)

XAU off 8.16. My god its BLACK MONDAY!!

(Mon Jul 07 1997 10:16)
@...Seniors trade at premium based on gold price
Ali: The reason ABX may suffer more than, say, a junior miner, is because all senior producers trade at a premium to net asset value. Even though ABX ( as you state ) has hedged its production at about $400 two years out the fact is that the bulk of its reserves need to be depreciated due to the current contango prices that prevail in the spot and futures gold market. So the premiums paid for proven reserves will decline accordingly across the board for senior miners.

This is why I have been harping lately that shareholders of the ABX's of this world should be calling Investor Relations and lobbying the companies to buy physical gold and catch the short specs with their pants down. This would turn the Mother Bear into a PaPa Bull.

I don't expect to see a grassroots lobby effort from gold investors to have immediate results but I do predict that political lobbying by shareholders to encourage the Big Boys to buy gold will eventually filter the rumour mill and the markets will start to fear the inevitable power of the Big Boy cash cows in the paper Gold markets.

ABX need only close its open short positions ( $400 futures book ) at these prices and take profits without mining the gold !!

This is the point. The 'hedged' Big Boys only need to close positions as the price spirals southward to take profits without ever mining the gold gold. Neat, eh ?


(Mon Jul 07 1997 10:24)
OK folks, as anticipated, the start of the mine closures - in SA.
( I wonder what kind of social harmony will occur when all these newly unemployed people hit the streets in S.A. ? )

Monday July 7 8:31 AM EDT
Gold extends its slide
By Brian Spoors

LONDON ( Reuter ) - New shock waves hit gold Monday following the disclosure last week that Australia had sold
bullion from state reserves, and in South Africa one mine was already being shut because the price has dropped so far.

The price of gold was fixed in London at $318.75, its lowest since December 1985 and down from Friday's London
close of $324.50.

The price collapse to 12-year lows -- down some $50, or about 13 percent, since January -- fuelled anger in the mining
industry as well as anxiety about the future of some mines.

South Africa's East Rand Proprietary Mines said it would halt work at its Benoni Gold Mining Co. Ltd as soon as
possible and put it on a care and maintenance basis because of the low price and losses at the mine. East Rand is a unit of
Randgold and Exploration Co. Ltd.

``It would take a Martian to be bullish at this point,'' said Andy Smith, precious metals analyst at Union Bank of

The sale of 167 tons of gold by the Reserve Bank of Australia followed disposals earlier in the 1990s by the Belgian and
Dutch central banks.

It stampeded already-jittery investors into a sell-off, for fear that more of the 35,000 tons of gold owned by institutions
may be unloaded in the future.

The sale, which cleaned 60 percent of the Reserve Bank of Australia's gold from its vaults, sent an especially bearish
signal to the market because Australia is the world's third-largest producer -- at 289 tons last year -- after South Africa
and the United States.

Bullion dealers expectedinvestor selling to step up this week. The U.S. Independence Day holiday last Friday may have
only postponed some of the unloading, they said.

``Expect an orgy of selling over the next few weeks,'' one dealer said, adding that he felt this way despite a previous view
that the price was about as low as it could get this time round.

``Now we might go to under $300 but if we do, mortgage your house and get into the market,'' he said.

In industry reactions, Australian gold miners pressed the World Gold Council, a producer lobby group, to make a
statement criticizing the action of their country's central bank.

The WGC expressed deep concern, saying that the sale seemed to be ``motivated by narrow financial considerations.''

``For a leading gold producer to take unnecessary actions that prejudice the well-being of a key sector of its economy
suggests a lack of sensitivity to the factors impacting the market,'' it declared.

WGC chief executive officer E. M. Hood said the weak price would put additional pressure on member companies,
several of which were in the council's hardship category even before the latest price slide.

``We expect others to follow with prices at these levels,'' he said.

Stockbroker T. Hoare and Co.'s mining equities analyst, Roger Chaplin, calculated that many gold miners are already
suffering at prices around $320.

Yet some dealers see the market's likely downside target as far down as the 1985 low of $287.25 which they say could
be reached shortly.

Gold sank 12 years ago in tandem with a collapse in the price of oil. It had tracked oil higher, to reach a record $850 an
ounce early in 1980, at a time when it was seen as an investor refuge from the inflation triggered by the OPEC oil
``shocks'' of the 1970s.

(Mon Jul 07 1997 10:32)
Been busy watching the action. What's impressive here for me is the high volume in PDG and Abx early on, and blydy is up in a market like this,
WOW. GLG hardly moved price wise. This could possibly be the wash out spike action George S. had been telling us about. Hope I'm not just whistlin Dixie, y'all.

(Mon Jul 07 1997 10:45)
( Long-winded post follows. Be warned! ) It seemed like a good time to talk about a special time in all of our lives, that being the warm and wonderful holiday of Christmas. Now we all know, the date of Christmas has ( probably ) nothing to do with the birth of Yeshua Hamashiach ( mispelled Anglicization of the Hebrew name of a significant figure in the history of religion ) . It has to do with the response of the leaders of so-called "organized" religion to the great whoop-de-do and other forms of celebrating being enjoyed by the heathen at the time of the winter solstice. The need for a corresponding gala for Christendom led ( IMHO ) to our celebrating the birth of our Lord on December 25.

Now, as we all know, this is because the pagans did not know for sure that the sun would ever be back, as it gave the earth less and less of its time ( Northern Hemisphere-wise ) all the way until December 22 or so. Thus, when their sages began to notice that the days were getting longer ( starting on December 22-23 or so ) , it was a time for great relief. The culture would survive, the earth would not go dark and cold.

You see, to have chosen precious metals stocks as an investment, and to have lost nearly everything, does not discourage me. To get out of precious metals stocks only to learn that I had left at what turned out to be the bottom, that would bother me.

You see, Christmas, the darkest, coldest, most forlorn and lonely time of the year, is the time of greatest revelry. A curious Western custom, one that reflects a forward-looking mentality.

And we can all say, and tell our children and grandchildren, we were there for the great downward spike of the AM of 7/7/1997, when the day was short. And we lived to see the days get long once more.

Pickett's Charge has been rebuffed. Valley Forge has been endured. Winston Churchill is on the radio.

To Torfeasor, Cherokee, Auric, Aurophile, Earl, Eldorado, the lurkers, the abusers, the ranters and ravers, the soothsayers, and all others: Merry Christmas, and Happy New Year, to all of you.

(Mon Jul 07 1997 10:51)
Joke of the morning
I come back from vacation only to find myself broke and the gold market hopefully bottomed out. I must confess that I will pay more respect to the opinions of the chartists on this forum in the future than I have done in the past. Like the chicken in the following story, what's gold done to deserve this harsh treatment?

There was this quiet, conservative man who happened to
own a parrot. Unfortunately for the man, this parrot swore
like a sailor. He would swear for five minutes straight without
repeating himself. This bird's foul mouth was driving the man
crazy. One day, it just got to be too much.

The guy grabbed the bird by the neck, shook him really hard,
and yelled "QUIT IT!" But this just made the bird mad and
he would start swearing even more.

The guy finally got fed up and said, "OK for you" and locked
the bird in a kitchen cabinet. This only aggravated the parrot
who contined to claw and scratch the cabinet while he cursed even
louder than before with a stream of swearing that would make a
sailor blush.

At that point the guy became so mad that he threw the parrot
into the freezer!

For the first few seconds the bird started swearing at words
at the top of his lungs

He kicked and clawed and thrashed all about the place.
Then it suddenly became VERY quiet. At first the guy just waited,
but then he started to think that the bird might be hurt.

After a couple of minutes of silence, he became so worried
that he opened the freezer door. The bird calmly climbed on
the man's out-stretched arm and said,
"Awfully sorry about all the trouble I gave you. I'll do my
best to improve my vocabulary from now on."

The man was astounded. He couldn't understand the transformation
that had come over the parrot.

Then the parrot said, "By the way, what did the chicken do?"

(Mon Jul 07 1997 10:54) broker called about contrary indicator
My friendly broker called and had few good words about gold price. He seems to think - as do many others - that the speculative shorts could not be whipsawed.

The shorts will be hammered once the senior miners with cash and credits band together and close out hedged short positions and begin to buy physical gold from weak hands.

That is all it takes to turn this Mama Bear into a Papa Bull. A couple Billion worth of physical and corresponding close-outs of hedged shorts will hammer the speculative shorts and turn this mother around.


(Mon Jul 07 1997 10:58)
@...up $1.50 from London PM close of $318
Is something happening ?

(Mon Jul 07 1997 11:01)
@Good Show Tort
On a day when gold bugs should be crawling into a hole, Tort gives us the uplift we all need. Keep up the good work ole boy!

P.S. To my last post- watch XOI, going up, this means the oils are getting warm when they heat up, we may see the catalyst that will change trends and maybe the heat will hit in these here parts of the world, I sure hope I'm wrong.

(Mon Jul 07 1997 11:19)
@pressure too much?
After a couple of hefty bloody amrys, the mind becomes clearer, no?
Why are the CB's of the world announcing their sales publicly, and the US says nary a word. Could they possibly be selling to each other and trying to create an image to the world that just doesn't exist???
They succeeded in making the shorts in gold wealthy, but in the end, won't nature in its infinite wisdom correct all the wrongs? The change in direction when it comes will be amazing, no??
What say you all ye wise old sages at the KITCO site???

(Mon Jul 07 1997 11:36)
It seems as if irrational exuberance and irrational pessimism are the by-words of the day. The game's afoot and the next few weeks will tell us the name of the game. Can someone turn lead into gold. Yes, one can do it atomically for about $17,000 a gram. Perhaps in a few weeks we will find that the game has a different name. Here's one for the rumor mill. A gold termite has evolved. It eats gold and eliminates paper dollars. When rumors are rampant what is the truth? Today the truth is Hollywood. Politics and the financial markets have become Hollywood. But when the movie is over we must face reality. In the end the law of supply and demand will dominate. What a difference a day makes!

itsy bitsy trader
(Mon Jul 07 1997 11:43)
@water spout
Blue Horse Shoe loves KRY, I think. We may see Tuesday or Thursday.

(Mon Jul 07 1997 11:50)
Commodity-wise - What goes up must come down - and Vice-versa!
We are certainly getting the volatility that many here predicted would happen for the next few days at least. Certainly is more interesting than watching the paint dry! All do to normal market operations I would say. Some short covering, some liquidation of longs and much new speculation both pro and con. This is probably what the market needed to help restore it to a 'free market' once more!

George s. Cole
(Mon Jul 07 1997 11:51)
Producer Cooperation
Bob: Bravo! It's about time the big gold producers started to think about their shareholders first. The gold mining industry needs a major consolidation to deal with short sellers and CBs on a more even basis. Far too many little guys around that must produce or go belly up.

But even today the seniors could exert a lot of leverage if they began acting in concert instead of letting the CBs and shorts play them for suckers. Time for them to act like grown ups for a change. Their lengthy cooperation with the CBs has been a fools game that has cost shareholders dearly

(Mon Jul 07 1997 11:59)
TO Kuston, Roebear/Milhouse,GSC,,Aurophile


VMAX's? Is a '73 Z1 Golden enough? ( :- )

Roebear & Milhouse:

Early last night ( roebear ) and this morning ( Milhouse ) you mentioned that people would not be moving to the new digital cameras. Of course, you and the others are correct for the cameras ( single shot ) items however, have you noticed how many video cameras there are out there now? Go to a wedding and you'll even find the pro photographers using videos since they can digitize the pictures and get them printed just like photos. I use one to make .JPG pictures and send them around the world as attachments to e-mail, without using an touch of Silver ( :- ) .

George S. Cole:

I agree with your post of 8:19 concerning the end of the bear if the market can hold after a re-test of the lowest low ( wherever that might be! ) . Would you expand on why you see the market going up then instead of possibly just going sideways and therefore not making it a great time to jump in please.


What the hell are you doing up at 3 in the morning? Helping Roebear with his olives? ( :- )


George Cole
(Mon Jul 07 1997 12:15)
Stocks not doing that well considering smash in gold. Another sign that time is running out for the stock bulls?

(Mon Jul 07 1997 12:26)
Does anyone know if Greenspan is under a gag order ?

(Mon Jul 07 1997 12:41)
The Zinc Scenario
kuston: Your 02:30 post should be read by everyone! I have been thinking along the same lines myself over the last few days.

A while ago DA mentioned that when zinc slumped a while ago the drop was aggravated by a lot of inventory reduction in zinc even though the price was dropping. He speculated that even though dumping inventory would only worsen the price ( just like the Australians ) commerical holders of zinc basically decided to cut their inventory losses and "clean up" the books.

Suppose, as you point out, this plunge is an attempt to "shake the tree" of any above ground holdings of gold that could be used to meet BT obligations? Essentially, in this scenario the price will be deliberately driven down ( and kept down?? ) in the face of very bad news and CB propoganda ( "demontisation" ) to accomplish a couple of things:

Firstly to "persuade" large holders of bullion that they are being "crucified on the cross of gold" and it is high time that they cut their losses and go make money on the stock market like real men.

Secondly, I strongly suspect this will help bullion banks settle with various bullion depositors whose gold they have cheerfully lent out and now cannot get back. The spin would be something like this: "We have insured your deposits at 370 ( or whatever ) . However, to claim this insurance you must give up your bullion. What we suggest you do is claim the insurance and take an ofsetting position in the futures market."

Everyone should remember that these prices are not necessarily harmful to BT. If this flushes out more cheap bullion for him, he might even go short himself on paper gold. And maybe already has.

(Mon Jul 07 1997 12:55)
Hold onto youre shorts, it don't get any better than this!!!
HI YA Gang.......I"M BACK

Mike Sheller
(Mon Jul 07 1997 13:02)
2 WEEKS: Methinks you don't give "the pagans" enough credit. They KNEW the sun would wax again. Why do you think that that famous "religious figure" you mention resurrected at the Vernal Equinox. That is when the equally balanced forces of light and dark give way to the ascendancy of the light OVER the dark. Aries ain't called "the lamb" for nothing. Unfortunately, Saturn now conjuncting NYSE Moon is not doing for silver what it did the last time it did so in '68. Ya win some, ya lose some. The planets DO bring action, but it's often presumptuous to guess what kind. In any event, it is hoped that your sunlight low point analogy for gold is apt. Merry Christmas to you too! You should have more periods with time on your hands.

Mike Sheller
(Mon Jul 07 1997 13:04)
REIFY: What's a bloody "Bloody Amry?" And how do I mix one?

(Mon Jul 07 1997 13:06)
@USA vs. Japan
I agree with those who have posted a possible connection between the current decline in gold prices to Hashimoto's comment to sell bonds and buy gold. We have some serious muscle flexing going on here between two of the world's most powerful financial countries. The "economic" war has begun.

(Mon Jul 07 1997 13:07)
Oracle@japanese.SURVIVAL.Part - III (7 July 1997)
JAPAN BETWEEN A ROCK & HARD SPOT: To Dump U.S. Treasuries & Buy GOLD! ( PART - III ) . BOJs June 27 Balance Sheet & Foreign Central Bank Holdings of T-Bonds:>

Oracle has expanded on initial findings of Barrons Randall W. Forsyth and Internets Economist George S. Cole. Land of the Rising Sun plagued with financial difficulties, choking on T-Bond indigestion, exacerbated by a pittance gold position, must reduce excessive dollar exposure to stabilize Yen parity. Due to the BOJs Balance Sheet & chart of Foreign Central Bank Holdings of Treasuries, the website is a little slow to fully load - HOWEVER, I GUARANTEE YOUR PATIENCE WILL BE AMPLY REWARDED:

John Disney
(Mon Jul 07 1997 13:08)
To All Blyvy Holders
Business Day announced today that Durban Deep,
Blyvoor and Buffels were reviewing the ratios for their
merger. It seems the Buffels shareholders blocked the
deal when the gold price fell. I assume the ratios will
be improved - they had been one DD for 1.3 buffels and
one DD for 5 blyvoor ( ADR is 3 Blyvoor ) . You may recall
that I said this rumour had been around for the past
few weeks.
A small victory in what has been generally speaking
a losing war.

(Mon Jul 07 1997 13:10)
GFD/kuston: In the recent past, someone posted a comment about the actions of market makers and how they adjust their book. To the effect that accumulating inventory is done by sharply reducing the price and inducing weak hands to sell. ... Shaking the tree, if you will. I believe it fits in with your comments this morning.

Also, after looking ( staring ) at the long term gold chart, I believe there is a strong case to be made that 320 will contain this downmove. Although it did hit 280 in 1985, that level was reached after coming down from 520. Such is not the case this time. To break 320 would wipe out a low of almost 20 years standing. Platinum and the Yen may provide some additional support as well. .... In short, I really do believe 320 is the bottom but only the foolish would be willing to bet on it.

(Mon Jul 07 1997 13:12)
( Gold's Production Costs)
To Selby ( Toronto ) : Belated thanks for your explanation. To add more confusion, today's ( 7/7/97 ) Australian Financial Review says, " In Australia, which has the highest average gold production costs in the world at $US358/oz ... "

Bob M
(Mon Jul 07 1997 13:15)
The reason the central banks have been dumping gold is that they know that the price of gold is going to drop subatantially lower and they are cashing in now. Look at info for what it is at face value, the cental bankers are in the know, dont try to analyze too deeply what they are doing.

(Mon Jul 07 1997 13:21)
Read the last paragraph. Very interesting!

(Mon Jul 07 1997 13:24)
a '73 ZL1!! WOW! I've only seen 1 - didn't get to ride it. Yes, a ZL1
is as golden as it gets. My grandfather used to own an Indian shop, you
can't count how many times I've wished he would of saved a couple of
them. I'll sell gold before I sell Mr. MAX.

Is it normal that the OZ's gold producers make public statements through
an outside organization? I'd be yelling, screaming, taking ads out in
paper, calling my senator, I'd be doing something if the central bank
cut my industry off at the knees. Yet, we hear nothing from them first

George s. Cole
(Mon Jul 07 1997 13:30)
We certainly are seeing enormous gold stock volume today. A necessary but not sufficient condition for a selling climax. But encouraging.

(Mon Jul 07 1997 13:39)
TPX TOPIX INDEX ( TOKYO ) 1497.10 -18.07 -1.19
NKY NIKKEI 225 INDEX 19705.17 -262.83 -1.32
NEY NIKKEI 300 INDEX 289.71 -3.84 -1.31
NK5 NIKKEI 500 1334.22 -9.87 -.73
JSDA ASDAQ: STOCK INDEX 43.76 -.50 -1.13
TSE2 TSE2 TOPIX 2ND SECT INDX 1807.08 -18.62 -1.02

Coloma Kid
(Mon Jul 07 1997 13:40)
It is most curious to me that today I heard Australia has dumped 167 metric tons of gold over the past 6 months. And those on this list
say "don't question the banks" - they know the price is going lower.
My dilemma - Who's buying and why? This whole thing doesn't pass the
stink test.

George Cole
(Mon Jul 07 1997 13:40)
bulls and bears
This is how bear markets END, not how they begin. Prices fall at a modest pace for many months, then we get a final brutal selling climax to flush out the last of the longs. I reiterate than nobody knows where the bottom will be. But there is little doubt we will get there very soon. And believe it or not this brutal bear will be followed by a powerful bull.

(Mon Jul 07 1997 13:42)
anybody have any interest in Crystallex ( kry.t ) aabout the only gold stock
going up. Possibly tomorrow will be the day the 4th court ruling infavour
of kry and kry takes property away from Placer Dome. Have been watching and buying kry dec. it was 1.90 and now 7.15. If tomorrow the ven. court
gives the decision in favour of kry the stock only has one way to go...up

(Mon Jul 07 1997 13:57)
Stocks down worse ....

For those of you following the debackle today, Getchell Gold ( GGO ) is down over 13% and Orvana Minerals ( T.ORV ) is down over 12% . And they're the bigger companies as well. Vancouver looks like hell on the small caps! Ah well, think of all the shares we can buy when it actually starts going the other way. More bang for the buck eh! ( even if it's only worth 72 cents haha )

(Mon Jul 07 1997 14:05)
So far today the worst Dow to Gold ratio has been 25.06 ounces.

(Mon Jul 07 1997 14:10)
Great story-Tortfeasor 10:51. Rubin is the man and Greenspan the parrot.

(Mon Jul 07 1997 14:10)
@July 7 close

More fireworks in store or have the markets stabilized for the day?

(Mon Jul 07 1997 14:12)
@Think I should change my name ...
YOW!!! Silver 4.26 !!!
Dow is now down 6.
PM's may be doing bad but the dow doesn't exactly smell like spring flowers.

(Mon Jul 07 1997 14:13)
MIKE SHELLER: I too am surprised at silver. I had expected it would hold up better. The fundamentals are there. They are selling silver along with gold "just in case".

Bob A
(Mon Jul 07 1997 14:20)
misery loves co.
For what it's worth two letter writers, Dessauer and Leeb both recently recommended gold stks. Dessauer bought PDG and Leeb said he liked some of the mutual golds. Both b4 the crash last and this wk.

(Mon Jul 07 1997 14:22)
Bob - Re: - Your 13:15. WRONG! Each CB that has sold has done so for very personal reasons special to their own country's situation ( eg. Australia ) . When gold was going up in the Seventies for a number of years was it because the CB's were so omniscient that they were selling? ( ie. - Did they sell because they KNEW the price was going down? If so they made a big mistake at that time because the price kept going up! ) Give it some thought and you'll realise that you did engage your mind before you put your mouth in gear. ( Don't worry - Everybody does it sometimes, me included, like right now maybe? :- ) )

(Mon Jul 07 1997 14:24)
Bema Gold selling at US$5.06, at or below book value. There are no Canadian quotes for Bema. Does anyone know why?

(Mon Jul 07 1997 14:24)
Well, there's misery for all today. A lot of other "real" stuff is tanking this afternoon...take a look at a grain chart...Ouch!

(Mon Jul 07 1997 14:27)
This is a good one!
"The only man who can change his mind is the man who has one."
------Edward Noyes Westcott.

(Mon Jul 07 1997 14:28)
Tortfeasor : Your 10 :51. Can your man do a service call to help with some parrots on this site.

(Mon Jul 07 1997 14:31)
Bart - Silver is off your chart!

(Mon Jul 07 1997 14:34)
futures players
To those unfortunate bulls who are long on gold contracts,
I quote the famous philosopher of our time, Mr. T:

"Ah piddy da fools!" Believe me, I learned the futures lesson
the hard way. At least with the physicals and stocks we can hold
onto them for the long haul ( Unless of course the companies go
totally bust. ) Whatever you do, don't sell now! If you have the
kahones ( which I don't ) , dollar-cost average at this point with
metals and/or their stocks, but at the least keep what you got,
save your cash, and look for a final bull confirmation before
getting back on the train.

(Mon Jul 07 1997 14:37)
Donald: BGO last 7.15 Can, -0.75, 12.26pm, volume about 530,000. See

(Mon Jul 07 1997 14:46)
PM stocks down an average of 7% across the board. Not quite a meltdown.

(Mon Jul 07 1997 14:50)
This market remindes me of Barton Biggs quoting an old Japanese proverb in Barrons,

"The fools are dancing but the bigger fools are watching"

(Mon Jul 07 1997 14:51)

For the people getting out of gold and gold stocks today, where is that
money going? Is this really the end of the Dow bull?

(Mon Jul 07 1997 14:51)
@ ``It's very, very bad news. They are calling it down to below $300 (an ounce) and if it does go to that, there will be only three, four or maybe five mines in South Africa,'' said Leon Esterhuizen
Monday July 7 12:38 PM EDT

Gold sinks to 12-year low; jittery speculators rush to sell

NEW YORK ( Reuter ) - Gold sank to fresh 12-year lows Monday in a wave of selling by speculators frustrated at the
market's inability to hold its ground, and the price collapse is starting to take its toll on the mining industry.

In active trading, the August gold futures contract was off $5.30 to $319.90 an ounce on New York's Commodity
Exchange, a level unseen since 1985.

Gold has fallen 13 percent, or $50 an ounce, so far this year under continued selling by central banks.

The latest plunge came after the Reserve Bank of Australia announced Thursday that it had sold 167 metric tons of gold
from its reserves.

The sale of 60 percent of the Australian central bank's gold hoard sent an especially bearish signal to speculators because
Australia is the third largest producer -- at 289 tons last year -- after South Africa and the United States.

Market sentiment is overwhelmingly bearish, however, and traders are forecasting the price could slump to $300 or

In London, spot gold briefly dropped to $313.90 an ounce, compared with Friday's London close of $324.25/324.75
when the New York market was closed for the Independence Day holiday.

But a modicum of support was evident at $315.00 an ounce, and speculators who had bet on a bigger drop bought back
some of their gold.

As a result London gold was fixed barely changed at $318.00 an ounce vs. $318.75 during the Monday morning fixing

``The New York market opened way below where it closed ( on Thursday ) , so the first thing people did was get out,''
said a London-based dealer. ``There is some support at $315, but it's hard to tell how much -- we haven't seen these
levels for 12 years.''

The stocks of mining companies were also hard hit, and the category was the worst performing group on the stock

Barrick Gold Corp. fell $2.44, or 11 percent, to $19.50; Newmont Mining Corp. lost $2.25 to $35.625;Homestake
Mining Co. was off 62.5 cents to $12.375 and Echo Bay Mines lost 56 cents to $5.25.

The collapse began to take its toll on the mining industry when one South African mine was shut because prices are so
low. South Africa's East Rand Proprietary Mines said it would halt work at its Benoni Gold Mining Co. Ltd.

``It's very, very bad news. They are calling it down to below $300 ( an ounce ) and if it does go to that, there will be only
three, four or maybe five mines in South Africa,'' said Leon Esterhuizen, an analyst at Societe Generale Frankel Pollak.

But analysts were wary of predicting a solid rebound.

``It would take a Martian to be bullish at this point,'' said Andy Smith, who tracks precious metals for Union Bank of

Some dealers say gold could fall to the 1985 low of $287.25, which they say could be reached shortly on fears that other
central banks might unload some of the 35,000 tons of gold that are held by government institutions around the globe.

Gold sank back in 1985 in tandem with a collapse in the price of oil.

Bullion had tracked oil higher, to reach a record $850 an ounce early in 1980, when it was seen as an investor refuge
from the inflation that had been triggered by the OPEC oil ``shocks'' of the 1970s.

...... Guess we must have some Martian heratige ......

(Mon Jul 07 1997 14:55)
John: Cash.

(Mon Jul 07 1997 15:06)
If the XAU finishes off around -8.00, that is the equivilant of a Dow drop of -720 points.

Bob A
(Mon Jul 07 1997 15:12)
I guess the Aussies have stopped selling or they would have kept quiet

(Mon Jul 07 1997 15:15)
Thanks....afterall ( as we know ) , what's good for DeBeers and the diamond trade should also work for gold... if only the Big Boys decided to defedn their shareholders best interests.

I guess Peter Munk is more interested in his real estate holdings than the golden goose.


(Mon Jul 07 1997 15:15)
What a divergence, Dow down 62 while bonds rallied. Yikes! Oh, and gold fell too.

(Mon Jul 07 1997 15:27)
MoreGold - Didn't I tell ya before; Mooney's are part Martian!

(Mon Jul 07 1997 15:30)
Portfolio manager Radsch of Lexington Goldfund ( LEXMX ) says on CNBC that "selling now is not smart. The faint-hearted are already out". He likes silver over gold. Silver down 28 cents. 16 of 17 commodities in the CRB index are down today. It is not just gold. 30 year US bond is up, rate down to 6.56. The market sees no inflation, but signs point toward possible deflation.

The depression in 1929-35 proved that a depression is a bad thing, so I'm sure that Rubin and Co will react eventually to prevent it by increased govt spending. This will in effect place a bottom on commodity prices due to dollar inflating.

Almost all gold funds are at yearly lows, which is to be expected.

The Toronto Gold Index is down -380 ( very unusual ) and Johannesburg gold index is down -80 ( very unusual ) . London gold down -14.55 today ( also unusually large drop ) . Meanwhile, numbers point out an extremely oversold condition and we are ripe for a short term rally, probably in the next three days. However, I don't try to catch a falling knife; I wait until it sticks into the table and stops falling. Any such rally could be very short lived or it could be the big reversal. Your guess is as good as mine.

(Mon Jul 07 1997 15:31)
John @14:51: The money exiting gold & gold equities is but a tiny fraction of what's needed to fuel the general equities market. Buying KO would cost more than buying all the gold mining companies.

(Mon Jul 07 1997 15:32)
DEFLATION continues to rear its ugly head. CRB index has crashed again today @ 232.18, off 3.39 points. That's the lowest level in over 2 years. It seems the precious metals are getting caught in this deflationary psychology. For gold and silver, all the signs of panic and capitulation are emerging.

The weekly sentiment poll in down to 20% bulls -- the lowest of the 1990s. Maybe it's an all-time low. Margin calls are flying. Speculators are giving up. Volume is heavy.

Watch for a gap-up opening tomorrow morning. If that happens, gold will be set up to make an island-reversal bottom. It has frequently done so in the past.

At the same time, the stock market is in the process of making a hook-reversal to the down-side today. After being up nearly 60 points early in the day, the DJIA is now down 65 points. The stock market investors may finally be recognizing the deflationary threat and the associated negative impact to earnings.

As George Cole has stated, it will probabbly take a down-turn in stocks to get gold to move higher. It's very possible those reversals are occurring today.

Under current financial conditions, anytime you can buy gold for under $1000, you have made a bargain deal. The shake-out today, once again, shows the dangers of buying on leverage. Those getting cleaned out of the market today are mostly speculators. I doubt that those who have purchased goin and silver coins ( and probably not leveraged ) are still in the market today.

(Mon Jul 07 1997 15:36)
It looks like the only thing up at this hour is soybeans, which has already had its total threshing last week so to speak. I just drove through the wheat and corn fields of Nebraska this past weekend. I can't help but wonder how those farmers are taking getting their butts kicked at harvest time with wheat and corn selling at the prices they are while all around them people with paper are making money without putting out much energy in the process. If the farmers quit producing, it would not take long for people to realize where real value is. Gold is real but wheat, corn and soybeans are more than real, verily essential; yet all around us we surrounded with paper experts; every day more people become experts as the DOW rises to the point where the wax on its wings will melt under the hot sun and the persons riding its precarious back will crash to earth with nothing but lifeless feathers and a hard earned lesson. Unfortunately, I have learned big time over the past several months. I think I am going to stick with hard product instead of paper gold in the future. At least Uncle Sam will eat some of this come tax time.

(Mon Jul 07 1997 15:38)
Leonard @13:42: You have a triple since Dec. .... Consider that all of the good news is priced in. ..... Don't forget the old adage: "Buy the rumor. Sell the news". ...... RYO '93, BGO Aug. '96.

(Mon Jul 07 1997 15:43)
Thoughts on the LBMA anyone? How do they fit in here? I feel that we are caught in the battle between titans here. Comments?

Bob M
(Mon Jul 07 1997 15:46)
Mooney- the last time central banks sold in earnest in the 70s was a completely different situation than today. We were clearly in a wartime economy then ( military spending ) with 2 major conflicts potentially erupting, and most importantly,a powerless presidency that slashed our military and denegrated their morale. Today, the world is 180 degree turnaround nearly. The central banks know that their is going to be a massive debt liquidation and when there is, metals are the easiest asset for people to sell so thus the price drops when they need to raise funds. Did anyone stop to think that the buyers of these metals are probably individuals rathet than large firms or investors. A perfect scenario for them to get burned in the upcoming price drop as thery panic to raise funds to meet their bills. Then the central banks will move in and scoop up the gold at bargain basement prices. At that point is when they will consider relinking gold to currency at the lower level. The little guy always get burned
Puetz- anytime you can buy gold under a $1000 its a bargain? Thats been true since 1980...dream on!!!

(Mon Jul 07 1997 15:47)
Per my previous post, has anyone read this?

Are there no comments from anyone on the CBs letting the mines go to 'ruin'?

Strad Master
(Mon Jul 07 1997 15:48)
STEVE PUETZ: I may have missed it in the past but would you mind encapsulating your views about what would happen to the economy and various investment vehicles ( metals, stocks, real estate, artistic collectables, etc. ) in the event of the deflation you envision. I'm sure many here would appreciate that information. Anyone else have comments, too?

(Mon Jul 07 1997 15:49)
Bob M: Remind me. What were the 2 major conflicts that might have erupted in the '70s?

(Mon Jul 07 1997 15:51)
Bob: If the major hedgers begin to reverse course, it would seem to me that it would have major impact on some of the stocks awaiting takeover. BGO comes to mind most prominently. Cash used to rescue the market would not be available for aquisitions, exploration and such. ...... Although it could be argued that subsequent stock appreciation would again make aquisitions feasible. ..... Like everything related to GC, it's a tough call. JUst a thought.

(Mon Jul 07 1997 15:53)
So this is what a 'crash' feels like. OUCH!

(Mon Jul 07 1997 15:58)
I guess that Fed letter that came out suggesting the all CB's sell all their gold had a few takers!

(Mon Jul 07 1997 16:00)
ALL: In the 1930's we entered a period of competing currency devaluations, mostly
done for trade purposes. When England devalued in 1931? ( can't remember the exact date )
there was the dollar, backed by gold, to take the role of the international trade currrency. We
have held that role since 1931 and still hold it.

My reason for bringing up this bit of history is to make the comparison to today. There is no
country with a substantial currency to take the international role today. If the dollar goes down
the tubes today, next week, or whenever, only gold or barter remains. That is why we are in a
much more dangerous situation than the 30's. International trade has become absolutely
essential to most of the world. Gold is the only "world class" currency left. Repeat ot 7:59 Post

(Mon Jul 07 1997 16:07)
@Mine closings
panda: I have been comenting for weeks about mine closings if the price dips below @330. and holds.
Already one mine closing in SA.
If the low prices hold, I take it to mean that the CB's are continuing
to liquidate Gold ( secrectly ) at the expense of miners.
Personally im happy to see a shakeout starting.
I would rather have this than Gold stagnating at 340. for many years.
IMHO, the CB's are the main manipulators of Gold and if they remove themselves from the equation, we can get back to the real supply/demand
market forces, which will take the price higher.
It's the old short term pain for long term gain.

Mooney, guess we Martians think alike...

(Mon Jul 07 1997 16:08)
@ Deflation
Strad Master: Rising bankruptcies, slower credit-growth, falling PPI, falling commodity prices, falling retail sales -- they are all sign of an emerging deflation. The deflationary process destroyers anyone with debt. That's the opposite of inflation -- which helps debtors.

The greatest bear markets will be in those areas that are the most leveraged today. Gold, silver, and mining shares are probably one of the areas of least leverage. In fact, after today, the majority of speculators may be cleaned out of the metals. Hence, they are in a bottoming process.

In general, the stock market is the most leveraged area. Look for a near-total wipe-out in stocks -- the DJIA will fall to 300 as dividends are cut, as earnings turn to losses, and as corporate bankruptcies climb.

Real estate is also heavily mortgaged. Commercial and residental prices will fall up to 90% from present levels.

Collectables will also fall in value. They have no value for day-to-day living -- which will be the struggle in the upcoming years.

Gold and silver coins will not be hurt be the collapsing credit structure. In fact, they should benefit as investors seek out safe haven for their money. For investors wanting to escape our collapsing financial structure, gold and silver will be the only alternative.

(Mon Jul 07 1997 16:17)
Down 6% ( PM stocks ) is _not_ a meltdown. The Dow was down 25% in a day, and regained itself ere long. What forces can bring back the price of gold? Who knows - if the other CBs do not sell ( which they may not ) , demand continues, and output drops, it is very reasonable to think that $400 may be reached before winter.

Nooone can predict the future. That is why they are not called "predicters".

(Mon Jul 07 1997 16:17)
trader ed : Is there a link or a place where i can find out more re the changing el nino. I live in Calgary,Ab and the last winter was unbearable. I would like to know to expect.

The last el nino brought us 20% interest rates, precious metals sky rocketted, house prices doubled, etc,etc,etc. Anyone care to pursue what will occur this time around. Trader ed the 'e' address is authenic so please feel free to provide me any info you may have.

Strad Master
(Mon Jul 07 1997 16:19)
STEVE PUETZ: Thanks for your explanation. It clears up a lot. Related to that, I have a specific question for you but don't want to pose it here. My e-mail is posted above. I'd appreciate it if either you'd post yours or, if you prefer, e-mail me so I can contact you directly. Many thanks.

(Mon Jul 07 1997 16:20)
san fran
Puetz ( sp? ) Surely you jest. Your last two statements are contradictory to each other as gold and silver ARE collectables almost as much as any other collectables. Are the Martians also landing next week??

(Mon Jul 07 1997 16:38)
ted butler: Well we got our bullish commitments of traders report in silver. As of the first the silver commercials were about as light net short as they have been in several years. Looks like this flush caught them too. If they have covered more here ( my guess is they are covering today ) silver should be in good shape.

(Mon Jul 07 1997 16:48)
Well, maybe this will cheer you up. My doleful contributions
can be used as a contra-indicator. ( I had a vision of gold
going up last week or so ) . Now, after being long for over
a year and a half and Abx saying their operating costs are
around $200/oz. I'm thinking I should pick up my long
position and stand aside and wait for the up trend to prove
out per the "privateer letter". I'm glad I don't do this
for a living. I'd be in the poor house.

(Mon Jul 07 1997 16:49)
All the stk mkt pundits advise buying the dips. we should follow their
advise about now

(Mon Jul 07 1997 17:00)
greed is going to catch up to them
..greed...the ultimate punishment...

(Mon Jul 07 1997 17:00)
Forget inflation/deflation what we have here is panic. Panic is just what you need if you want to invest 50-100 billion dollars in the small gold market. The volume in the gold shares will tell the story. Some one is buying every share sold. Guess who? They place their orders under the market and make the market come to them. As GSC says when the stocks refuse to follow bullion down they will have to be content with what they have flushed. At that time they will stop selling the physicals. Of course by now they have quite a few "customers" selling for them! So I guess when they have bought most of the stocks it may be over. We are seeing a first class operation. Its not for nothing that these people have lots of dough ( and friends in high places ) . In any case I believe below 300 enough little players may be entering the long side ( cash only please ) to make downward progress difficult even for these guys. But then again, maybe not!

(Mon Jul 07 1997 17:07)
@...acquire junior reserves or buy physical gold and close short positions
Earl: I agree that its a zero-sum decision - you either buy gold or buy a junior's reserve and wait out the market. I suggested that the Big Boys step in to support gold prices - instead of buying cheap reserves - because the price is too low from a cost perspective. The industry could not afford a stable gold price range below average cost.

The decision is whether to blow the wallet on cheap acquisitions or to strategically blow-away the speculative shorts that now command the gold market.

I own BGO and I prefer to stall an acquisition of Cerro Casale at these prices in favour of shoring up gold prices. It's a shame to see one of the world's largest gold/copper finds hussled by a Big Boy for chump change as a result of recent CB inspired decline in the speculative ( monetary ) value of gold.

The bright side of the stroy is that if gold price drops much more BGO may become a copper play instead ;- )

( 5 billion pounds of copper at Cerro Casale. )


(Mon Jul 07 1997 17:09)
Steve Puetz,
In a deflationary scenerio the US government has a lot to loose. In your opinion, how will they fight it?

(Mon Jul 07 1997 17:28)
I think that the Dow-Gold ratio handled itself well today. Opened at 24.67 ounces, reached 25.06 ounces at about 10:30 NY time, did a screeching U-turn, and closed at 24.66 ounces. That strategy could have made you a tiny profit today. Hard to tell if 25.06 is the top of the Dow but it sure feels close about here.

(Mon Jul 07 1997 17:35)
General comment to all: It is truly amazing with which tenacity
some of the gold speculators cling to the belief that the yellow
metal will make them somehow rich. It reminds me of the recent
speculative fever with which Bre-X shares were traded.
The believers maintained until the final end that gold is in them
hills around Busang. The were constantly dreaming new and different scenarios and "" rational"" ideas why they must be believed.--
Gold is not required to maintain efficient trade in a modern economy.

(Mon Jul 07 1997 17:37)
Strad Master: my e-mail address is

(Mon Jul 07 1997 17:39)
JW--The thought is to buy the dips in an up trending market and sell the rallys in a down trending market. By most objective measurements gold and gold stocks are trending down.

(Mon Jul 07 1997 17:42)
it's going to get better
...some analysts said the price of gold has dropped so low that nearly 60 % of the world's gold miners are in the position of producing at a loss...

(Mon Jul 07 1997 17:45)
Buyer beware @ Investor Responsible ????
Bre-X suit targets brokers' NET advice. ( July 05 1997 )

(Mon Jul 07 1997 17:45)
IDT: My summary on Gold Eagle didn't focus enough on silver, sorry for this confusion, it should have been clearer in respect to this, but while summarizing 2 hours of lecture I couldn't get into each and every point. Checking back my notes, here's what Armstrong said precisely: "Silver must first go down to $4.25, $3.25 or $2.83/oz. Only then it will be cleaned out for a rise which will take it to $18 after some difficulties at $10-12/oz."
In his latest writings, supports have moved to 4.29 and 3.50. He seems quite convinced that silver has to take out the support of 3.50 ( that is, going below this level ) in order to enter a true bull market where it has any chance to challenge the high of '80.
All: The present bear in gold looks quite ugly, indeed, when gold is expressed in US$. However, since the LMBA announcement in January we know that gold is used as a currency by some major "economic agents", leading to daily transactions of several bln. Dollars in London. When LMBA announced these figures, they even ridiculized the 300 tons of gold the CB of the Netherlands just sold, stating that it was far less than one days business. The Aussie sale is even smaller, and follows the same reasoning of gold as a currency, yielding less than the US$. The difference with the Netherland's CB sale is the media coverage and the way this banal fact of Oz-sale is used to scare the hell out of the few goldbugs left over.
Back to Armstrong: he sees some support in gold at $313. If this support breaks, the bear is likely to last until '98, most likely June/July '98 with a low in the range of $250-275, or even an extreme low of $224-230. THAT IS, IN US$, once again. Now, lets take a look on the DM/US$ ratio: Given the uncertainties regarding the Euro, according to Armstrong, the DM/$ ratio, at present at 1.75, could break out to the upside at 1.92-2.00, and even up to 2.56. A simple calculation of the price of gold in DM/oz. at these extreme valuations of DM/US$ ( 2,56 ) and gold/oz ( $225/oz. ) , if they happen together, takes us to DM 576/oz. which is approximately the price of gold today.
We shouldn't forget that gold is a currency, the hardest one over long term. But if we want to see the hard facts, we have to take off our "$-glasses".

(Mon Jul 07 1997 17:45)
SHEK: In 1932 they fought it by sending in the troops, under the command of General McArthur, to tear down the "Hooverville" that protesters had built on Anacostia Island in the Potomac River. They changed the price of gold from $20.67 to $35.00, doubling the monetary base. The money piled up in the banks. The banks were terrified to lend it to anyone, there were few qualified borrowers anyway. Reserves in the banks shot up to 86% at one point. That is, $86 on deposit for every $100 loaned out. Today it is less than $7. They tried price supports to keep farm prices from falling. They started the WPA, trying to get people back to work on road and bridge construction etc. That was an attempt to get some cash circulating. Everything they tried failed until the war came along and men went into the military services and war production got going.

(Mon Jul 07 1997 17:46)
Lurker: Gold and silver are not collectibles, they are money. Please post your e-mail address so I can reply further.

(Mon Jul 07 1997 17:49)
Patience is a virtue
...Don't panic and be patient, Royal Oak Mines, Margaret Witte, tells Shareholders...and you'll be rewarded...expects gold to rebound...
Panic situations creates bargains...

(Mon Jul 07 1997 17:52)
ELLI: Technically you are correct. The problem you have is human nature. In your computer just answer me one question. Who gets to program the computer? Paper would work just as good as gold if it was just as hard to get as gold.

(Mon Jul 07 1997 17:54)
The combined speculative position in gold and silver futures hit 55,000 contracts short -- a record short-position. In view of activity this past week, the combined short could now be as high as 70,000 contracts.

Other large short positions in gold and silver were -- 43,000 short on January 19, 1997 and 38,500 contracts short on February 28, 1985. Both were just before large rallies began.

Doc Duke
(Mon Jul 07 1997 17:57)
roger: The answer to questions about any subject with a relatively
unique name, such as "El Nino" ( never mind how to get the ny out of
our keyboards ) , is to go to a web search engine. My favorite is
Alta Vista ( ) and present the problem
to it. The answer to the "el nino" query yielded 4000 hits, of which
the leading few are:

Secondary effects of El Nino
The Secondary Effects of el Nio-Southern Oscillation on the Corals of the Pacific. The corals in all regions of the Pacific are
affected by a... - size 2K - 26.Jun.95 - English

NOAA/PMEL/TAO El Nino Theme Page - Current El Nino ( ENSO ) Forecasts
U.S.Dept of Commerce / NOAA / PMEL / TAO. This theme page demonstrates how El Nino related data from distributed
research institutes may be accessed... - size 3K - 4.Mar.97 - English

NOAA/PMEL/TAO El Nino Theme Page
U.S.Dept of Commerce / NOAA / PMEL / TAO Project Office. El Nino Theme Page: Impacts of El Nino and Benefits of El
Nino Predicton. Table of Contents.... - size 15K - 21.Jan.97 - English

IOS - El Nino information pages
The El Nio. How does it work, and how does it affect the coast of B.C.? The following are a series of short articles about the El
Nio... - size 3K - 21.May.97 - English

El Nino Working Group
WELCOME TO EL NIO HOMEPAGE FROM WESLEYAN UNIVERSITY!! Our goal is to provide a space where
information about el Nio can be obtained. Some.. - size 1K - 26.Jun.95 - English

Note that it even ( luckily ) gives one specialized enough to discuss
the effect on the coast of B.C.! Hope this helps.

(Mon Jul 07 1997 17:59)
@ take heart
Group: many EXOGENOUS events are coming to the fore: Bosnian
commitment...Cambodia...the Middle East...Mexico....Washington campaign hearings...Japanese trade imbalance... ( to name a few ) ...
the worm is turning...AND I believe this bodes well for gold...Remember..
it's in the early morning hours before the sunrise the the night is most dark.

(Mon Jul 07 1997 18:17)
SILVER Making two different calculations using two different sets of data, the silver charts have given a downside target of 395 for the silver futures. I fear that the precious metals have further to go on the downside. Back testing projected targets have yielded very satisfactory results. Real time testing is now proceeding. This is one time that I hope that the projection is wrong. My data base only goes back to early 1993, so lower projections from earlier dates are possible.

(Mon Jul 07 1997 18:18)
Puetz ( may I call you Steve? ) : I was happy you said "deflationary psychology" in your 1532 post. For as Opailleur and others keep telling, this is a Clinton/stock/bond/dollar bull phenomenon. Where are there any other signs of deflation? No fear anywhere. Credit spreads are thin and even the Sfr/DM spread is barely off the floor. The purpose of this move is to relieve the bagholders of their heavy bags.

(Mon Jul 07 1997 18:18)
Warning sounds in London, Economic Mess in France, Recessionary Trend in Australia & Financial Crisis in Far-East, ALL BODE ILL FOR U.S. Stocks. Looming Crash heralds Gold & Silver bull market:

(Mon Jul 07 1997 18:19)
Gold the political weapon?

What country that has been selling weapons and missiles to the enemies of the west, who's Gold and strategic metals are its principle export industries?

What country recently threatened to sell bonds and buy Gold?

What would bring both of these countries back in line.

The answer to these questions, would be a good reason to push Gold down to below $300 an oz.

(Mon Jul 07 1997 18:22)
Orpailleur and Millhouse: Thanks for the clarification and to either of you the following question: Does the price supports for silver at 4.29 coincide with his projected support of 313 for gold? In other words, if we break price support of 313 gold to the downside, then we should expect the price support of 4.29 silver to break down as well and we are looking at the 200s for gold and 3.50 for silver. Do I have it?

(Mon Jul 07 1997 18:25)
Seasoned experts know better
...Carlyle Dunbar a columnist with Investor's Digest, in leading front page article, of the July 4 edition, " is the ultimate currency " he goes on to say, that " in the larger picture, gold prices seem to pulling back toward the low of the 1987-1993 drop in prices ( obviously he wrote the column a few days prior to the plunge ..ed ) he continues, " Such breakout-pullback events occur occasionally in markets, and offer a second oppurtunity for buying at an ebb point " " Most investors regard gold and gold mining stocks only as an investment in inflation-proofing a portfolio. But gold is a store of value and the ultimate currency. If the present world market and business expansion ends badly, many investors will want to own gold in some way..."
"..golds are getting to what Sir John Templeton calls "the point of maximum pessimism"

(Mon Jul 07 1997 18:30)
@Just keep this in mind
Ouch, after I looked at my portfolio I feel the pain after todays closing.
On the other hand, I think the following quote is really appropriate for whats happening:

"The future is all around us, waiting, in moments of transition,
to be born in moments of revelation. No one knows the shape of that
future or where it will take us. We know only that it is always born
in pain."

(Mon Jul 07 1997 18:32)
Can anyone give me a reason for the euphoric reaction to the results of the Mexican election? I would have predicted a down day rather than a new top in the Bolsa.

(Mon Jul 07 1997 18:40)

Elli: You have great faith in the modern economy. Are you a believer of "The New Era", the Wall Street Bull. Remember; they can't print gold and alchemy is not yet perfected. If you feel the way I think, buy paper stocks and hope you make a bundle.

(Mon Jul 07 1997 18:51)
@New England
The argument does not have to do with "New Era" the fact that is coming up means we are close to a new era but not the New Era of the New Eraists, they are really in the existing/old era. The issue is not paper v. gold but simple Capitalism 101 Gold is under owned and over shorted on leverage/ Financials are over owned and over bought on leverage. Simple/ the New Era will indeed begin someday!!

(Mon Jul 07 1997 18:55)
SILVER Making two different calculations using two different sets of data, the silver charts have given a downside target of 395 for the silver futures. I fear that the precious metals have further to go on the downside. Back testing projected targets have yielded very satisfactory results. Real time testing is now proceeding. This is one time that I hope that the projection is wrong. My data base only goes back to early 1993, so lower projections from earlier dates are possible.

(Mon Jul 07 1997 18:58)
to Donald: I will try to answer your question regarding hard to get
gold - easy to get paper:
Why would anyone want to have gold in the first place? It pays no
annual interest, it costs money to insure, store, if you want to
buy something with it,you would have to exchange it first into
paper money.
Gold hard to get?? You can buy all the gold you want to have,- with
It is not hard to get, if you truly want to have some for
some unthinkable reason. .

(Mon Jul 07 1997 19:01)
@CB's: I thought Austarlia sold 164 tons, no its' 184, oh well what's 20 tons between Martians ...
Gold, at new 12-year low, rapidly loses its luster with investors
6.31 p.m. EDT ( 2231 GMT ) July 7, 1997

NEW YORK ( AP )  All that's gold does not glitter.

The precious metal's price fell to its lowest level in 12 years Monday, driven down by surprise Australian central bank selling that piled upon years of investor disappointment.

Gold fell $6.10 to close at $318.10 an ounce in New York, down a stunning 64 percent from its high of $875 in January 1980, when hoarding bars or coins was considered a shrewd hedge against runaway inflation and global unrest. It last was at this level in 1985.

Even with its stunning decline from levels above $400 an ounce as recently as early 1996, shoppers won't see bargains when searching for necklaces and rings, said Steve Spivack, a jewelry dealer in Manhattan's diamond district.

"The price is not going to be 20 percent less if gold falls 20 percent, because you're not paying for the gold alone. There's also labor and profit margin,'' Spivack said.

He said the biggest discrepancies are found with intricate designs or jewelry made in the United States, both of which have higher labor costs.

Meantime, there have been deserters in the army of investors who had bet on gold.

"I think people are throwing in the towel on gold,'' said Robert Brusca, chief economist at Nikko Securities International Inc. "Just think if had invested in gold over the last 10 years instead of the stock market. It would've been a disaster.''

Indeed, that same $875 invested in stocks that make up the Standard & Poor's 500 Index would be worth about $7,100 now, not including the dividends those stocks paid.

The latest bad news for gold came Thursday, when Australia's central bank said it had sold two-thirds of its gold reserves, more than 184 tons, earlier this year for an estimated $1.8 billion.

The announcement meant more gold was on the open market, reducing the value of existing holdings, and sparked fears that other countries would follow suit. Gold plunged $7.10 an ounce Thursday, and did not trade Friday in New York because of the holiday weekend.

On Monday, the fallout expanded to other markets. Stocks of big gold producers fell heavily in active trading, with Newmont Mining Co. down $2.43 3/4 to $35.43 3/4, Placer Dome Inc. down $2.25 to $14, and Barrick Gold Corp. down $1.68 3/4 to $20.25.

Prices of other precious metals such as silver, platinum and palladium were led lower by gold's retreat.

Central banks hold an estimated 25 percent of the world's gold, and often use the metal to pay their bills to other countries. But many have been looking for investments with better returns.

Belgium, Canada and the Netherlands were selling gold reserves well before Australia, according to John Nutley if the Gold Institute, a Washington-based trade group.

"A number of these central banks started swapping out of gold so they could earn some interest,'' he said. "The concern is, who's going to be next?''

Another concern for gold investors is low inflation. When gold hit its peak in early 1980, U.S. inflation had just come off a year of rising 13.3 percent and was on its way to adding an additional 12.5 percent. With world oil prices still on the way up, no one was betting on inflation cooling off.

So far this year, consumer prices have risen at just a 1.4 percent annual rate.

Without the threat of cash investments being eroded by time, individuals lost the motivation to buy gold coins and bars.

Gold isn't easy to hang onto, either. It pays holders no interest and often is expensive to store safely.

According to Cole Fields Mineral Services, a London-based research firm, 187 tons worth of gold coins were in circulation in 1980, compared to just 69 tons today.

But some analysts believe gold could provide a good return to investors if inflation returns.

"The prospects for gold are probably better over the next 10 years,'' Nikko Securities' Brusca said. "The best of our inflation days are behind us, and that should be better for gold.''

Jewelers have been among the winners in gold's retreat.

The World Gold Council reported last month that world gold production surged 17 percent led by jewelry, which accounts for 45 percent of all output.

(Mon Jul 07 1997 19:02)
Could someone please direct me to the best site with longest most detailed chart for gold - much appreciated. And I have a question for all - not trying to be sarcastic - but for 10 years now I have been attending investment conferences, and the likes of Jim Dines etc., have been saying any day now that gold would jump in price because of the debt of central banks, that the currencies would crumble, you've heard it all when's it going to happen? When are these guys going to admit they are wrong?? Any thoughts?

(Mon Jul 07 1997 19:05)
ELLI: Here is a short list of things civilization has used for 6000 years for the same purpose they are used for today. All of them remain essential for their same, original, uses. Iron, copper, stone, brick, mortar, rope, gold, silver, fire, clay, sand, water, leather, wood, paper. A computer can replace any of them.

(Mon Jul 07 1997 19:13)
The Boom is Predicated on Everyone Doing Well

The "New Era" is a lovely concept, but is it achievable in a world made up of Bosnia's, Northern Irelands, Sud Tyrol, Rwanda's and etc, etc.
Here in the USofA hardly no one trusts its government, who lets its firm's ( its owners ) roll around the world at the expense of the financial security of its own people.
No, I am not an Isolationist, but there have to be limits.
The Wall Street Bull will last as long as our government's "true owners" say it will, then keep an eye peeled in all directions. ( FOR YOUR OWN HEALTH ) .

(Mon Jul 07 1997 19:18)
@Day on Dow - mood changing and spin doctors
Its interesting to watch opinions about the "solid" market trend
changing by hours. Is this an indication of coming end?!
At least there is more stability in gold market - it goes down, down,
and down ;- )

10:38 AM EDT: The Dow was up 51 points, or 0.6 percent, at 7946
Monday is seeing ``a little bit of a follow-through, and the market
as been a rolling freight train,'' said Scott Bleier, chief investment
strategist at Prime Charter Ltd.

12:49 PM EDT: The Dow was up 25 points, or 0.3 percent, at 7920
After pushing the Dow up 223 points in the previous three sessions,
buyers picked up Monday where they left off before Friday's U.S.
Independence Day holiday. ``Everybody likes to jump on a winning
bandwagon,'' said Peter Coolidge, senior equity trader at Brean
Murray & Co.

2:40 PM EDT: The Dow industrials dipped 27 points to 7869.
We're seeing some profit-taking here, but for now it appears to be
contained to individual issues rather than the market as a whole,''
said Greg Nie, technical analyst at EVEREN Securities Inc.

5:08 PM EDT: The Dow industrials fell 37 points to close unofficially
at 7858
``The market's entitled to a little rest,'' said Al Goldman, market
analyst at A.G. Edwards and Sons. ``We've had a one-way trip up.''

(Mon Jul 07 1997 19:20)
ELLI: Typo in my last ( should be can't, damn computer problem! )
You have answered your own questions. It pays no interest because there is no risk that it will be inflated. You require interest on paper because there is risk that it will be inflated. We insure it precicely because it is valuable.

During the past 6000 years is has only been the last 64 that it had to be exchanged into paper money for purchasing the things you want. That is a political problem, not a problem with gold. All of us would dearly love to pay our bills with gold. All of the tradespeople would love to receive it in payment.

Crushed Chicken
(Mon Jul 07 1997 19:21)
The sky was falling

The sky has fell......THE SKY HAS FELL and I'm one poor chicken.

(Mon Jul 07 1997 19:22)
Elli - I concur, except to point out that there are STILL people on the Bre-X thread who believe there is gold.

The bottom is not in, and people who are buying right now are going against
the very tenet they claim to believe in: Don't buck the trend.

As far as there being a ready supply of baseball cards compared to gold,
this is just hogwash. They are both available in excess, and the number
of cards doesn't determine their value, it is people's perceptions of the
value of a particular card. For example, the '89 Ken Griffey, Jr. rookie card
from Upper Deck is $75 high Beckett and has been for about 6 years.
Generally a dealer would pay you about $20-$35 for one in near mint
condition, which is a reasonable price compared to what he would offer
you for any other Ken Griffey, Jr. rookie card ( nothing ) . This buy price is
also quite stable. This despite the fact that the dealer knows and the person buying it has got to know or will know when he goes to resell it that Upper Deck ran about 300,000,000 of these cards off the presses in 1989 and continued printing them in 1990 and 1991. Why do people pay $50 to $75 for a Ken Griffey, Jr.
card when they know it is readily available? Why would a dealer pay $20-$35
for a card which he knows there are millions of?

(Mon Jul 07 1997 19:26)
Lou: The investment guru's will change their tune once we stop going to their seminars and meetings. Imagine the feelings of the unfortunates who went to New Orleans a couple of months ago.
Anyone seen a claim from any of the guru's that they saw this collapse coming or were the few malcontents who predicted 250 here the only forward viewers of record?

(Mon Jul 07 1997 19:28)
MIRO: In a Bull Market they don't like to publicize the bears. Did you see Barton Biggs on CNBC today? He has seen the real world and a bunch of bear markets. He is now down to 53% stocks, 32% Bonds, and went to 15% cash today. He says the Bull is over. When he talks at least I listen. He is a good market player.

(Mon Jul 07 1997 19:31)
Well as I stated on Fiday morning today became "Black Monday" for the precious metals. Gold, Silver & the XAU all got crushed. At this point I believe that the worst for Gold is over. Silver could still go lower as it really has not been going down with gold until recently and it did close very near it's lows, but even then the low is near. The XAU may not go down much more but I do not believe it will go up either, even if gold and silver do rally in the weeks ahead. The XAU is so over-vauled compared to Gold. Like ALOT! The XAU should be under 80 at a minimum. Now as far as gold I would never consider bottom picking it's too dangerious. I thought of buying Oct calls but the volitility premiums are so high I just could not justify it. So there is really nothing to do but wait until Gold has proven the low is in. For thous die-hard traders you could buy gold around on any weakness from here with a stop just under today's lows. I myself am not doing this.
What a day. COMEX started the trading day in a new building. I was wondering if they had the trading floor on CNBC today? Did anyone see a badge AUAG?? Well for what it's worth I came into today's session short silver. I was more than happy to close the trade out and take profits. It was the most profitable trading day of my life. I hope that no-one reading this was long coming into today's trading. I feel for you and know how it must be. I've had my share, afer all I went long stocks near the close on the friday before Black monday and was forced to sell on the open that monday as the dow opened up down 100. We all endure pain before we succeed, just try and learn from your mistakes and take advantage of the situation next time. Take Care.

(Mon Jul 07 1997 19:32)
Jaack: I missed your point the Bosnia's, Northern Irelands, Sud Tyrol, Rwanda's go back 100's of years. They play no part in today's world. If the Ireland situation was settled or carrys on for another 1000 years it would no effect on anything other than the immediate participants.

One result of the new era of communication is the understanding that such regional issues are of no consequence as long as they are contained.

(Mon Jul 07 1997 19:37)
Donald: I hear something on the news this morning about the top Mexican drug lord dying and that there was now a vacuum left and a power struggle might ensue. Not sure if that is in any way connected. Since drug trafficing and politics are interconnected there it may be related to the Bolsa today. In any event, the guy died reportedly while in surgery having plastic surgery to change his identity. And we thought we were having a bad day.

(Mon Jul 07 1997 19:45)
IDT: The news reported that the political left had won the election. I thought it might have some future implications on silver mining labor problems.

(Mon Jul 07 1997 19:47)
@off topic
Check out the black and white Martian panorama ...................................

Mike Sheller
(Mon Jul 07 1997 19:53)
Silver Support (???)
The long-term silver chart shows a rising support line coming in at roughly 4.09-4.15. This line connects the 1972 bottom and liftoff point, and the double bottoms of '90-92. This is the last-ditch major trendline under silver. No guarantees with these trendlines, but if silver goes below 4.09, it will likely test 3.50 once more. If it holds, we may have seen the worst.

(Mon Jul 07 1997 19:57)
@MoreGols is not off topic
MoreGold: "Check out the black and white Martian panorama .."
I did and I did not see any sign of gold in that picture. That
should be a good sign - no more gold coming to market may help ;- )

(Mon Jul 07 1997 20:05)
Elli @17:35: "Gold is not required to maintain efficient trade in a modern economy." ............. Who on this site ever said it was?

(Mon Jul 07 1997 20:06)
I have a feeling that silver will be under 4.00 per oz by the end of this week. So why was I buying another 1000 oz today? Small investors were folding today, had to wait in line behind sellers to buy at the local bullion dealer.

itsy bitsy trader
(Mon Jul 07 1997 20:17)
@water spout
Tomorrow morning may be the last time to join the KRY shuttle. We'll see, I guess. : )

Steve - Perth
(Mon Jul 07 1997 20:25)
Australian Gold Stocks take a Bath

(Mon Jul 07 1997 20:26)
Most of my silver is worth more than I paid for it. Covered my gold Thursday. Only one thing to do, buy more silver here + sell gold here and anywhere above. I believe in $275 gold now.

Steve - Perth
(Mon Jul 07 1997 20:29)
Australian ( one "i" ) Reserve Bank shifting assets from one area to another
Peter Costello, in his fairly typical arrogant manner, when interviewed the other day, said, "we haven't sold ALL of the gold, anyway, there are plenty of people in the jewellery industry that want gold"!!!!!

Chris Sun
(Mon Jul 07 1997 20:30)
Sun 988@aol
I understand above ground gold is about 120,000
metric tons. Does anybody have the knowledge about how much gold underground has been discovered and yet to be digged out? This probably will give us a better long term supply and demand picture.

Steve - Perth
(Mon Jul 07 1997 20:31)
Why Australia has got problems. We have no policies...
We all know it here, it is just that it is only coming out now in the press...

Lan Man
(Mon Jul 07 1997 20:34)
@The numbers are in
From Steven Jon Kaplans "Gold Mining Outlook":

As of July 1, 1997, released at 4 p.m. on July 7, 1997, the commitments show commercial insiders long 139,801 ( our favorite Martians ) , short 69,136; speculators long 5,230, short 72,241. The average historic ratio for commercials is 2:3 long to short; for speculators, 2:1 long to short. Therefore, commercials are much more long than usual, and speculators are much more short. These values have become amazingly more bullish over the past two weeks, and are now EXTREMELY BULLISH--and remember, this does not even include the enormous increase in open interest since July 1 when the commitments were tabulated.

Almost forgot, COMEX gold warehouse stocks declined by 2,932 ounces to 847,308 ounces.

(Mon Jul 07 1997 20:34)
@forget about short term but where will it end?
Most of people are talking about gold from a short term point of view,
spikes, short trading, catch the upswing to bull market, etc. I am
trying to look at longer trend not so much making money in a short term
but preserving the money I have.
I do believe that history repeats, cycles in market are not dead, and
that gold still can play the role as long solid currency ( though some of
you say that cybercash and paper can do all of that ) . Now, with the
latest developments in stock market, dumping of gold by CBs, record
number of short positions, drop in US$, deflationary trends, reverse in
foreign money inflow into US treasury market, etc. one have to wonder:
Is it possible that some of the actions by the key players and policy
makers may have more destabilizing effect on financial markets than they
originally anticipated? What would be the point when things get really
out of hand and the only way out is significant meltdown and rebuilding
from the scratch?

Can anybody think in those terms? Am I totally out of my mind? Is it
totally unthinkable? Sorry but I don't take "we are in the new era" for

(Mon Jul 07 1997 20:36)
To all - This Martian ( see Steve Kaplan's page ) reopened a brokerage account this morning and bought CALLS on ABX. I intended to buy calls on the XAU, but these were too good to pass up. I just wanted you all to know that I do backup my words with my money, even though I am up to my eyeballs in a favorite gold stocks. For the record, at times like this, I have always been right and I have always been early!

(Mon Jul 07 1997 20:39)
THE $85 BILLION DOLLAR QUESTION (Feds 262 million oz. Gold at $325)
Why has the U.S. - fountainhead of antigold sentiment - NOT SOLD any of its gold while encouraging its allies to sell?? - Coles Market Insights poignant question:

Chris Sun
(Mon Jul 07 1997 20:55)
Sun 988@aol
I understand above ground gold is about 120,000
metric tons. Does anybody have the knowledge about how much gold underground has been discovered and yet to be digged out? This probably will give us a better long term supply and demand picture.

(Mon Jul 07 1997 20:59)
John 19:22 : I hate to respond to your comments since I know nothing
about baseball or card collecting. Please correct me if I misunderstood
your post. You're telling me ( all of Kitco included ) that I could take
1000 or 10,000 baseball cards with Ken Griffey, Jr. picture on it to a
dealer and exchange them for $20,000 or $200,000? Then this guy could
turn around and sell them for $75K or $750K. Also that there are 300
million of these cards available and with more being printed everyday.

Your point is that this market of Ken Griffey, Jr. rookie cards is just
like the gold market. Their value is decided by the perceptions of the
buyer and that these perceptions have no relation to the supply of

Well, if I understand your point correctly - I have no answer.

By the way - Could you point me to the person that will let me short
sell these baseball cards? I see money laying on the ground I would
like to go pick it up.

(Mon Jul 07 1997 21:03)
@DOWN UNDER in more ways than one
Steve - Perth: Thanks for the articles.
I don't understand one thing though, why is the Australian Gov't out to kill off your Gold industry.
First they sell off 2/3 of the CB Gold that has been saved by your forfathers for $1.8 billion, which in large part causes Australian Gold shares to crash, handing Australian investers a $1.2 billion loss today alone.
Then they talk about imposing a 2.5% royalty on Gold mining.
Somehow I think theres going to be a lot of P-O'ed Australian miners paying visits to their local politicians ....

(Mon Jul 07 1997 21:21)
Oracle AT JAPANESE SURVIVAL Part - III (7 July 1997)
JAPAN BETWEEN A ROCK & HARD SPOT: Nippons To Dump U.S. Treasuries & Buy GOLD! This report displays the Bank of Japan's ( BOJ ) June 27, 1997 Balance Sheet and a chart of Foreign Central Bank Holdings of U.S. Treasury Bonds versus the S&P 500 Index.

International financial analyst, ORACLE, has expanded on initial findings of Barrons Randall W. Forsyth ( Barrons magazine ) and Internets Economist George S. Cole. The Land of the Rising Sun is plagued with financial difficulties, choking on U.S. T-Bond indigestion, exacerbated by a pittance gold position, and a must need to reduce excessive dollar exposure to stabilize Yen/Dollar parity. Due to the BOJs Balance Sheet and the chart of Foreign Central Bank Holdings of U.S. Treasuries, the website is a little slow to fully load - HOWEVER, I GUARANTEE YOUR PATIENCE WILL BE AMPLY REWARDED -- there is a starling revelation of the relationship of foreign T-Bond purchases and the speculative and relentless rise in the prices of Wall Street stocks.

(Mon Jul 07 1997 21:22)
A sight for sore eyes.

(Mon Jul 07 1997 21:25)
From Charles Crane of Key Asset Management advising their clients ( July newsletter ) about stock market strategy.
"... a disciplined value investor must sell into strength when opportunities arise, even if there is no immediate and obvious alternative in which to invest the proceeds. In short, even though the sun is shining today, I know that nasy weather can kick up at the moment's notice, and I am keeping my raincoat on and my umbrella up."
Wouldn't you hate to see weather person talk about stock market when describing tommorow's weather!

(Mon Jul 07 1997 21:27)
Mike Sheller Today the 22.11 .My god look at this we can make the 21 century.

(Mon Jul 07 1997 21:29)
Somewhere, a group is watching, waiting to pull the trigger. All the
small shorts are in the sheep pen, and what you will soon see is a
history repeat to the max.
I quit paying attention to any chart years ago, but the thing that has
never failed in predicting the future is human greed, second only to
human fear, and you will soon have a grandstand seat to both.
At this time, it will take less money than most realize to run gold
up rather quickly, and there are those watching right now that have
the capabilities to do so. Some of you know who did in 1993.
These shorts are ripe for the plucking. BELIEVE IT !!!!

Now anonymous
(Mon Jul 07 1997 21:31)

I think you may be a genius. Thanks for your 21:21

(Mon Jul 07 1997 21:34)
Peter Munk on CNBC Squawk Box tomorrow.

(Mon Jul 07 1997 21:36)
Kuston - Sometimes I don't know the point I'm trying to make either.
You are exactly correct in your recasting of my analysis of the Ken Griffey, Jr.,
UD card ( except for the fact that I don't think Upper Deck is still making
the card today, but I guess I wouldn't put it past them ) . I don't think if you
had 10,000 of Junior's UD rookie cards you could take them to a local dealer and expect him to pay $25 for each of them, but there was a large distributor out of
New York or California that was actively ( probably artificially ) supporting
this price up until they got in trouble for tax fraud or something last year. Still,
subsequent to their legal difficulties, the card has not suffered any decline
in price, if anything, there is a more active market of late because of Junior's performance up until he was injured ( yeah, he's fantastic, but come on, the Mariners still aren't going to win the Series this year, and he's no lock for AL MVP ) . Now
everyone can badmouth cards, in fact everybody does badmouth cards, but
the public perception is that Beckett is the bible and Beckett's party line is that
the public sets the prices. All I know is that when a new card product comes
out, dealers hesitate to buy or sell a high-dollar insert card until it comes out in Beckett ( or take a stab at what Beckett will price it at based on stated odds and
other factors ) and when Beckett comes out, it says that it based its price on
what it saw dealers selling the card for. As far as Junior's UD card, I wouldn't
get too excited about shorting the market. Beckett is not going to change the
price anytime soon, and Junior's rookie card will only get more valuable over time,
because of the public's perception that a player's first appearance on a card
is somehow more valuable than a second-year card or a well-produced card
or a lower production number card.
Anyway, this is far afield of gold and I'm sure other people more knowledgeable
than me about cards will be able to provide 40 counter-examples or tell me that
there are actually only 200,000,000 of Junior's UD rookie cards and they were
on the lower right corner of the sheet and so centering was a problem, etc.
The only reason I brought it up because coin dealers talk about the intrinsic
value of bullion and there really is no intrinsic value - the value is extrinsic,
it is what people will pay for it. The same is similar for cards. Yet people
have no trouble accepting that cards are worthless, after all, they are just
cardboard, you can't eat them, you can't wear them, etc. I was just asking
why the situation is different with gold, and more importantly, if the reason
gold is dropping is exactly because people are asking themselves why
the situation is different with gold ( compared to stocks, thoroughbreds,
classic cars, etc. ) .

(Mon Jul 07 1997 21:40)
Murray: Judging by the latest COT, you may well be correct. The specs are roughly, 14 to 1 net short. ...... You are also correct on another score as well; we do have a front row seat. Although, so far, it has been a sad movie.

(Mon Jul 07 1997 21:43)
Mooney Over the years you are the best.Truth always wins.Please don't be another Cole. I think you are great .Happy Trails.Forgive my spelling I lived at the Colonial Tavern when the Blues was the best..

(Mon Jul 07 1997 21:48)
Milhouse: Thank you for the additional information on silver, I think!
Front: I was going to mention those videos as already discounted, again for the short term. I used to be a photographer, BTW. Usually only drink on Fourth of July, now extended into Black Mondays! Above highly recommended, no shakers of salt, no olives and some of Americas' smoothest. Works great on Bear bites.

(Mon Jul 07 1997 21:55)
Fidelity Select American Gold & Precious metals Chart.
Ten market days ( seven hours / prices per day )

Anonymous Now
(Mon Jul 07 1997 21:55)
RJ = You have been absolutely one of the best commentors on this site and I therefore appreciate your comments. Now a question in relation to your post of 2026, July 7, 1997, to which I hope I get your answer: When did buy silver?

(Mon Jul 07 1997 22:18)
Reality Check
I just read that the stock market capitalization of Coca Cola + General Electric = the Paris stock exchange. Off the top of my head I believe that France is the world's 5th largest economy.

Talk about knowing the price of everything and the value of nothing.

When this finally comes crashing down gold is going to be the place to be.

(Mon Jul 07 1997 22:30)
International market pundit Milhouse questions common-sense of Australias CB selling 2/3s of gold reserves at historically low prices. He foresees higher inflation & money supply - see Guest Guru Milhouse:

(Mon Jul 07 1997 22:30)
Been a long day
Read my prior: worth LESS than I paid for it. 4.60, 4.53, 4.40, 4.25

(Mon Jul 07 1997 22:43)
As an Australian it gives me great pleasure to tell you that I will vote that ass..ole dickhe.d government out of power at the next election! AAAAAAAAAAAAAAAAAAHHHHHHHHHHHHHHHHHHHH what a idiot!

Mike Sheller
(Mon Jul 07 1997 22:49)
That Sun is hotter than Florida!
POORBOYS: Thanx! Like RJ feels about silver, I myself can't get enuf of those M Factors! inexpensive and efficient way to plot solar proton activity from the GOES sattelites. Just when I got Kabalah figured out, you throw this at me. Bookmarked!

RJ: LESS??? Damn, RJ, I was hopin' SOMEONE made money on the long side today. Was bettin' twould be you.

(Mon Jul 07 1997 22:50)
You seem to be taking it very hard! How do you really feel about your glorious leader?

Mike Sheller
(Mon Jul 07 1997 22:53)
Moon, spoon, swoon, loon
RJ: I know, I know, chartz is mumbo jumbo. But I likes MY mumbo JUMBO. Please refer to my 19:53 re silver. I promise no planets, moons, or sofa-shaped rocks are involved.

(Mon Jul 07 1997 22:53)
Anyone besides me notice all the press time and air time the metals got in the media today ????

(Mon Jul 07 1997 22:58)
on RSI
With Gold RSI at 10% we must be scraping bottom here. Short term it will be very difficult to go much lower.

(Mon Jul 07 1997 23:08)
I'm sorry, but when your government sells you out ( and their vote ) , it really gets to you. His stupidity has cost me thousands and I find it hard to accept the way he anounced the gold dump. I sick of getting up in the morning to find "Gold in another freefall". AAAAAAHHHHHHH! I'm going fishing and will try to forget!

(Mon Jul 07 1997 23:18)
@The piss Up
Australian all ordinaries index : 2,679.60 ...... down 33.4 or -1.2%
Australian gold index: 1,173.70 ........ down -101.7 or - 7.9%

(Mon Jul 07 1997 23:24)
LOU@1902: About as long as it took the Roman Empire to
collapse. Could be sooner or later. But it will happen.
In 1980 a couple of sisters out in Burmuda ( ? ) were calling
3000/oz AU. Crazy. No body knows. Its a game. Why do
some people wear hair shirts?

(Mon Jul 07 1997 23:24)
Scott 22:43 : Nice post.

John 21:43 : While at dinner tonight we were talking about baseball cards.
I can see the correlation between most cars, motorcycles, and baseball cards.
But none of them really are a substitute for anything that has an open
market to trade them ( long&short ) .
Intrinsic vs extrinsic? ( Is that really how they are spelled? ) Without
thinking on it - I would agree with you. I would like to say that gold
does have a long long history of extrinsic factors supporting it though.

Another point we thought of - the market cap for KGJr baseball cards
is $21 billion at the retail level. $21 Billion!! Are you sure you
wouldn't want to short it?

(Mon Jul 07 1997 23:34)
Scott @theBank: Why wait for the next elections, do you have in AUland a process called "Impeachment"?

(Mon Jul 07 1997 23:40)

Nailz - I noticed. This is the one bright spot I can see for gold,
if Mr. Common Man and Mr. Bargain Hunter get the word that
gold is cheap. However, I was disappointed to see that most
articles included a quote that gold was only going lower. Whether
or not this is the case, it kind of puts the kibosh on an immediate
jump. You also need to be checking your city newspaper tomorrow, to see
if it is getting maximum coverage. As I remember from 1993, the main
thrust of the articles at the low were that there was just no interest in gold, not
that everyone was running away screaming. So that too needs to be
toned down for the public to get interested.

(Mon Jul 07 1997 23:41)
Mike Sheller: Your 13:02 has restored my faith and I discard my intemperate path, at least till Kitco bash ( or the 4th, or another Black Monday etc. : ) ) . Sometime we gotta talk.

(Mon Jul 07 1997 23:41)
Puetz: I believe your bulletins ( reasons to sell stocks now, deflation, and economic/financial contrast ) are brilliant.

Complacency exists among most investors as they are waiting for the traditional spike in rates to bring down the equity markets. Adjusted for inflation, real interest rates are rising right now. The CPI adjusted fed funds rate has increased 135 basis points since the end of Dec/96 and PPI adjusted fed funds rate has increased 275 basis points. Real rates are increasing due to falling inflation.

Top & bottom line earnings disappointments may be what pops the bubble.

Gold will be the asset choice by default.

(Mon Jul 07 1997 23:46)

MILHOUSE: Thanks for another well-written article in the GE. The following may be of interest to you in regard to your view that an increase in money supply will cause inflation. Gene Epstein of Barrons has several articles on the subject. The second article is under this URL: -
and an earlier related article is referenced therein. It is his contention that the common belief that inflation is induced by a FED induced increase in money supply is dead wrong, rather an increase of money supply is a sympton of inflation and not the cause. And, inflation is produced by an increase in the price of things such as oil, health care, food etc. Further he states the FED is reactive rather than proactive in increasing the money supply base, and that banks have the principal role in this regard, much of which is outside the FED's control. Because of its limited usefulness, he also reports the FED does not target M1, M2 money supply as it once did in determining economic policy. Moreover, a number of recent economic reports that I have read concerning M3, both domestically and elsewhere, also give it little weight with regard to it being an inflation indicator. I mention this not necessarily for the truth of the matter stated, but to present a counterview for your consideration.

(Mon Jul 07 1997 23:50)
RJ Thanks,I really appreciate and learn from your posts. One question, can you give any fundamentals, TA, intuition, whatever as to why silver will do well short term as opposed to bearish ( short-term ) views such as
Martin Armstrongs? I know you are busy...

(Mon Jul 07 1997 23:50)
Ok then, I'll sell my long position into the next gold rally
and wait for the defined bottom formation. I'll hold cash
during the wait. Don't worry Mom, I'll wear my mittens.

(Mon Jul 07 1997 23:51)
Poorboys - Then we must have rubbed shoulders - or at least have been oogling each others 'ol ladies. ;- ) Did you happen to catch that crazy band from Africa - Osibisa?

(Mon Jul 07 1997 23:54)
Once upon a time, there was a great king. He was held
in great esteem by all. One day the king had a great
party. He invited all of his great friends. Upon arriving
at the party, the king's guests noticed that the king
did not appear quite right, in fact he appeared quite
naked. The guests mumbled about such circumstance, but
they were quickly informed that the king was wearing
special invisible royal robes. It was suggested that such
garments should become the fashion throughout the land.

Many people came from far and near to pay handsome sums
for this new fashion. They paid with their gold, but they
received nothing in return, not a stitch. Some dared complain,
but they were quickly given extra invisible royal robes. It was
explained that this was to be a payment of interest. This was
acceptable and the people went away jubilant.

Alas, anyone who dared to speak the truth about such doings
were mocked and scorned. "You fool! Can't you see the beautiful
garments that we are wearing" exclaimed the beautiful people.
And so, quite soon, there were many stark naked people and
a few rich tailors.
The rest is history.

(Mon Jul 07 1997 23:55)
Let's change the subject to PL for a moment. Here is PL plotted with the Japanese Yen. They would seem to follow one another closely.

(Mon Jul 07 1997 23:57)
Anyone know when, at current rates of U.S. government
spending, tax revenues will equal the interest on the
public debt?