Gold Discussion for Investors and Market Analysts

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

(Mon Jul 14 1997 02:07)


bb fisher
(Mon Jul 14 1997 02:30)
have@ a look
this chart is of the dow jones from 1987-1997 and the second chart is the dow jones from 1919-1932 ( expressed in 1997 dollars ) . otherwise they are self explanatory.

"Blowoff" in the autumn???

it sure looks like the "blowoff" is happening before our eyes NOW!

(Mon Jul 14 1997 02:41)

bb fisher @ 02:30--Just when I had given up on Kitco for the night...That chart woke me up! That should evoke a few comments. Thanks.

(Mon Jul 14 1997 02:55)
Not again.......???
D. A. - You seem like a gentleman and, as such, I should treat you so. It seems that youve got an oz-o-gold burning a hole in your pocket, or do you want to lock in a wager before the stuff is worthless? Seems like an awful lot of folks feel as you and would like to dump their gold as soon as possible. Well, I didnt just fall of the mine cart, you know. Gotta get up pretty early in the morning to pull a fast one on this poor old gold peddler ( about 8:30 am New York time ) . Its not that I shouldnt take you gold, its that I wont. If I may paraphrase; Your golds no good here mister. Not much good anywhere else either. I had a 1oz Austrian Vienna Philharmonic gold coin in my hand and I was walking it across the backs of my fingers as I read your challenge. First you would bet against 325, now 300. Whats next, 299? Then maybe 298? No, I cant take gold from a man who loves it so. A man who would overlook its plethora of shortcomings and still hold it close to heart. No, I will not take your gold. For, alas, I do admire the spirit behind the challenge. Go good into to the morrow, comrade, for the day will hold wonders.

(Mon Jul 14 1997 03:04)
Pardon the sacrilege

Donald @ 18:04 - Did I misread? Did you speak of the Golden Rue?

He that owns the gold, rues.............

Perhaps not.............. My mistake.

(Mon Jul 14 1997 05:25)

Dear Sir,
You may or may not be aware that we sold our only production asset ( ie 50%
of the Gold Mines of Coolgardie- GMC ) and we were paid in March. We now
have approximately $12 million in cash and no debt. We are currently
seeking new projects and the fall in gold price is to our advantage as many
projects struggle.
Our timing in moving out of GMC now seems perfect and your company has a
new management team since last July and we are optimistic about the future.
Unfortunately our share price has fallen with the rest of the market but
for example, Herald Resources who were our JV partner and who we sold our
50% to were at approximately $1.80 12 months ago and are now $0.55.
I trust that answers your query.

Mal Smartt
Chief Financial Officer

The Last Goldbug
(Mon Jul 14 1997 05:26)

The London Financial Times reported that Merrill Lynch went from 24th to 3rd in FOREX trade. Now I am begining to understand why some believe they are using Ted Arnold to push down gold in support of currencies.

(Mon Jul 14 1997 06:48)
Is that true that the US governement holds only about 1 Troy ounce per US inhabitant?
And Japan 1/10 of an ounce? while the Swiss hodl about 10 T.O per person?
Thank you.

Crystal Ball
(Mon Jul 14 1997 07:27)
DBC's free trial period is over for tech analysis charts. For another site try...

George Cole
(Mon Jul 14 1997 07:43)
August gold now up 80 cents believe it or not.

Widespread expectations of a final stock market blowoff this fall could be the hook that keep most from selling during the very real blowoff going on right now. Stocks more likely to be plunging this fall than blowing off further.

(Mon Jul 14 1997 07:48)
bb fisher -- I loved your early 1900's chart vs. the current '90s Dow. At the rate the Euro bourses are going, one to two percent a day on the DAX alone, the lava and ash should be coming forth from this volcano soon. After all, one percent a day for 250 days would return something on the order of twelve times your money in one year! Credit bubble, nahhh! It's called investing!

(Mon Jul 14 1997 07:57)
@Pac Rim
Well, I guess we'll have to wait and see who calls up whom. Do the Japanese bail out Thailand? Malaysia? Phillippines? Themselves? I wonder how much better gold looks it terms of stabile exchange rates than T-Bonds? Meanwhile, the S.A. gold mine stories continue to be downbeat. I wonder how much of this has to do with the current NUM negotiations? Ah, never mind. Gold is worthless. Give me some DELL or CPQ! :- ) )

Bob A
(Mon Jul 14 1997 07:58)
I'm now negative on the outlook for gold and will sell. Plat and pall. look good so I will stay with them. Looking back over the last few years I should have bought common stocks, live and learn.

(Mon Jul 14 1997 08:04)
Panda: Fidelity Select Electronics up 5% since last Monday! I am irrationally exuberant. I also have my eyes firmly fixed on the exit.

Bob: Keep some powder dry. Gold is up $5 from its low last week. North American mining stocks up 3-5%. I feel your pain, but the bottom may well be in.

bb fisher
(Mon Jul 14 1997 08:08)
bob a:

i presume you are jesting with us. otherwise i hope you are limber, cause you're sense of timing is going to get you bent over log.

Mike Sheller
(Mon Jul 14 1997 08:08)
dizzy@such heights
BB FISHER: The last time I got so dizzy was hanging out the door of a Huey strapped to an M60! The old Chinese saying, often misquoted, goes "A picture is worth 10,000 words." Your juxtaposed Dow charts are worth at least 100,000 words. Indeed, there is nothing more to be said.

(Mon Jul 14 1997 08:14)
To Cap n Kev
CapnKev: ( :- )

Last night you said :

"next thing the'll tell us is
sex causes cancer,not cigarettes"

I want you to know that you're mistaken. Sex does not cause


(Mon Jul 14 1997 08:14)
I have been browsing this conference for some time now. It seems that the participants only want gold to rise in value. It is dangerous to trade the markets if you WANT a particular outcome. Make money no matter what the market is doing.
Also I see that there seems to be a desire for the DOW to tumble. Check your long-term charts. There is no correlation with a falling DOW and a rising gold. When equities tumble, people liquidate all assets ( including gold ) to meet margins.

(Mon Jul 14 1997 08:21)
Rich -- NEVER meet a margin call!

(Mon Jul 14 1997 08:24)
Front: Related to your comment, someone asked Grocho Marx if he smoked after sex. His reply was "I don't know. I never checked."

(Mon Jul 14 1997 08:30)

Alas I am but a poor speculator with narry a single ounce of the yellow stuff. It is my earnest desire to become a gold bug so that I may share a kindred spirit with those bask in the warm yellow glow of elemental passion. Try as I might I could find no one here willing to ease me into this fraternity. It now appears that I will have to do it on my own. Perhaps it is better this way. I will venture out into the world and buy some on my own. Today will be the day for I can wait no longer. Before the day is out, I shall begin my very own hoard. My wife has taken it upon herself to begin investing in common stocks for the future education of my 14 month old son. I will choose a different vehicle.

(Mon Jul 14 1997 08:41)
@Bob A
When Will Rogers said "Well, all I know is just what I read in the papers" intelligent people did not take him literally. Neither should PM investors take what we now read in the papers trashing gold literally. Got to look between the lines for the figure of speech ( and shady figures ) .

(Mon Jul 14 1997 09:10)
bb fisher: Charts=Wonderful!
Rich: Agree with your 08:14, emotion+investment=oil+water. Still a tall order especially as we must remember our perceptions are biased. Pontius Pilate said "What is truth" while Truth stood in front of him ( my bias, perhaps, but a succinct example ) . We must be true to our Giants, when we stand on their shoulders and report what we see. Too much emotion and ego will cause us to fumble at the truth, like the blind men the elephant, and tell the sensation and not the true sense. Few things have taught me this as well as this forum and my foray into the still precious metals.

Lan Man
(Mon Jul 14 1997 09:11)
The truth is revealed! In trying to determine why the usg monthly economic numbers
never seem to jive, I remembered about that Pentium fiasco not so long ago. You know,
that mathematical firmware bug that Intel admitted to a couple of years ago? So after
all it turns out that "they" really are trying to tell the truth, its just that their
computers keep messing up the numbers. Think I will e-mail AGrove and remind him that
his largest customer, due to red tape, never got around to swapping out those defective
pentium chips. Also, maybe he should contact JPL and get them some replacement chips,
then they can get that rover roving again.

Poor KHayes of CNBC, no wonder she always gets confused when trying to interpret all those statistics...

Ever wonder why ASmith of UBS keeps talking down gold? I KNOW it has nothing to do
with the fact of UBS getting busted shredding all those WW2 paper records, all those
Nazi gold dealings etc., right? After all, that gold is no longer worth anything,
it has been demonitzed blah blah blah.

(Mon Jul 14 1997 09:15)
Forward Selling

Vieserre and Ted Butler :

Thanks for your explanations on the intricacies of forward selling. I haven't had a chance to digest your posts as yet, but I'll come back to you later if I have further questions. BTW Ted - the notes are the key to understanding any company financial report. I always read the notes first - if I don't like or understand what I read in the notes, I don't bother reading any further.

Cheers, Milhouse

(Mon Jul 14 1997 09:50)
To all,
Learn some lesson from recent incident...NEVER TOO GREEDY!
Short from us 339 per oz until now.Should have covered at 315 per oz, and take my profit,but i did'nt!NOW,the metal rebound to 321 and more the disadvantage at currency at exchage rate,i make a bit !STILL i learn a lots in my future investment...great i feel!by the way some news from south east asia..check this...
happy trading to all

(Mon Jul 14 1997 09:53)
D.A. Belated congratulations, it used to be common, almost traditional, for a new parent to buy a gold or silver coin in the date of birth for the newborn. If each of the approximately 145 million newborns had such a gift stowed away for them that would be what, two years mine production? Perhaps even the approx. 115 million third world births could afford a silver coin at these prices. This is a custom that needs promoted!

(Mon Jul 14 1997 09:56)
Crystal Ball,
Thank you muchly for your post re "Bigcharts". It's always nice to discover a new web site of interest. This is the type of information sharing that makes this a great forum.

(Mon Jul 14 1997 09:57)
THE DINES LETTER (July 14, 1997)
Of Japan's $220 billion in foreign-currency reserves, 76% is now in US dollars. Nippon legislator says Japans gold reserves far too low. Dines ALL-GOLD REPORT has interesting insights:

(Mon Jul 14 1997 10:00)
King Kong was brought back to the Big Apple, chained in disgrace. Captured, tamed. An explosive force, extinguished. "Gold is dead." Ahh but if it snaps its fetters, who can contain it?

(Mon Jul 14 1997 10:00)
@...need money crisis in short-term or decay of CB gold story
The chart that juxtaposed the '22- '29 stk mkt against the '87- '97 run illustrates a pattern that suggests the current mkt is doomed by history to lose about one-third of its value.

Although we are overdue for a 'healthy' correction ( 10% minimum ) I don't think we will see a similar '87 re-run. The missing ingredient from the '87 mkt was the IT sector. Sure, INTL, MSFT, CPQ, DELL were all there in '87 but they - and their cousins - did not "own" as much market share as they now command.

Certainly, the IT industry is not immune from a serious fallout. Indeed, the IT industry has a more volatile price history than the broader market.

The story behind the BULL story is this:

The U.S. lead IT revolution has spear-headed a proposperity wave that coincides with the Internet and great expectations of hardware and software demand. ( The area of e-business is just beginning to bear fruit. )

This wave has affected the major DOW stocks that are not IT. The story suggests that the non-IT S&P companies have benefited from the productivity enhancements of IT solutions and this translates in lower labor ( expenses ) and higher earnings.

The I.T. revolution is the greatest non-combative victory of the United States in history. Nobody quite understands the significance of the U.S. global IT industry and its reach into every sector of economic. The U.S. entertainment industry is one benefactor of IT and it ( entertainment industry ) is the world standard. You can now watch Santa Barbara and Dallas on Russian T.V. The Red Empire was defeated not by nuclear threat but the invasion of U.S. Information technology and entertainment enterprises - we could also add the Marlborough Man and Cocal Cola but get the message.

To keep this story alive the U.S. financial system has tio remain liquid. The Japanese are key linch-pins to the continuing BULL since they finance a great deal of the US govt debt that results in cheap capital or low interest rates. ( The Japs had long-ago dumped their gold to invest in the U.S. financial system to provide a trump card during endless bilateral trade and balance of payments sessions. The Japs hold up the U.S. system and Washington kills smoke-stack jobs while satisfied by the fast-growth U.S. IT jugernaut and the high-skilled job creation and wealth accumulation these global empires generate for U.S. treasury.

So the productivity gains from the IT revolution and the low interest rates are the stuff that make this BULL continue. The only other condition is the demonitization of gold.

The Gold Cartel ( CBs ) have told Mr. Mkt. that they no longer wish to hold the yellow metal and instead prefer the paper mined by the ( principally ) U.S. govt. This is in line with Japanese bilateral fiscal policy with the US govt. The world financial order has been transfornmed from the Bretton Woods gold-backed system to a multilateral currency and govt paper system with the U.S. economic empire nominated as the presiding judge and arbitrar of global economic prosperity.

The backdrop for this is a renewed neo-conservative fiscal thrust ( post-Regan/Thatcher ) in major G7 nations that translates into increased pressure to reduce operating deficits and public debt. The CBs ( x-USA ) are encouraged to rally around the new U.S. dominated financial order 'and' operate more business-like. We may argue on the specifics and the statistics but "nobody" really cares. The story marches on.

Since the CBs have increased gold supply they permitted the speculative demand for gold to increase by a multiple of this supply. The shorts command the market. There is a paper overburden in the gold derivatives market in the short-term ( under one year ) .

The best thing to happen to gold would be an event that shakes the confidence in U.S. currency. I do not think that the demise of the BULL mkt will do this. I recall that the FED pumped liquidity into the 1987 market crash ( or, at least, did not need to interceed 'much'. )

The medium - term solution for better ( higher ) gold prices would be the eventual decay of the CB gold dump story.

Although I expect, as do many here, a Mr. Mkt. correction I do not think we will see a material bump-up in gold prices unless coincident events in the U.S. cash markets and the arrest of the CB gold dump story are concurrent.


(Mon Jul 14 1997 10:21)
B.B. Fisher: Great charts. They bear an eery resemblance in both time and value. ..... Another eye opener is the Dow plotted in constant dollars, from the advent of the Federal Reserve system to the present time. It gives lie to the concept of long term buy and hold.

(Mon Jul 14 1997 10:26)
Mike Sheller RE Sunspots The 22.11 year cycle is averaged so you might have 4 to 8 year difference in any one period not very reliable.Next cycle to start 1988 peak in 2002 .I guess the proof will be the Gold pudding. Happy Trails.

(Mon Jul 14 1997 10:35)
Mooney- Yes I remember you at the Colonial you came to the bar and asked for something tall, skinny and full of liquor and I said here take my wife but leave the Gold jewellery.I think one thing we both agree on stick to the charts .The Trend is your best friend.Happy Trails.

Steve - Perth
(Mon Jul 14 1997 10:44)
AMNESTY: Aussie Dollar keeps on dropping
If it keeps up, the likelihood of inflation kicking in becomes higher. House prices are just starting to get ready to move in Perth in some suburbs. Well behind Sydney.

Steve - Perth
(Mon Jul 14 1997 10:50)
What Australians believe. Latest Survey. They don't believe PM John Howard on jobs.
This government has gone from positive anticipation after 13 years of Labor, to unbelievable levels of disillusionment.

Steve - Perth
(Mon Jul 14 1997 11:00)
Australian blue-chips start the descent...
If "Foodland" did 98% in 12 months, what do you expect????
A lot of smart money got out or reduced exposure months ago.

Steve - Perth
(Mon Jul 14 1997 11:06)
Currency Fever a Painful Affliction....

(Mon Jul 14 1997 11:30)
Poorboys, could you stand in for him at the humor position? You seem to have "the gift".

(Mon Jul 14 1997 11:33)
But a very overdue meaningful correction is on the agenda. After all, stock market here is ONLY priced at something like 2.5 times gross world product ( of all nations ) . SEE:

(Mon Jul 14 1997 11:35) surprise here
Gates world's richest businessman.

(Mon Jul 14 1997 11:51)
@... on US global business dominance
"The Forbes Foreign 500 earned $208 billion on $7.9 trillion in revenues in the most recent fiscal year, compared with $295 billion on $4.8 trillion in revenues for their U.S counterparts in the Forbes Sales 500, the magazine said. So, U.S. firms earned $87 billion more than the 500 non-U.S. companies did on a little more than 60 percent of the total sales. "

---- end quote ---

What amount of the differential could be attributed to advance deployment by U.S. global enterprises of ( principally ) U.S. Information Technologies ?

( To be fair, the German software house, SAP, is a $4Billion sales datbase vendor that has a nice chunk on the large enterprise database market due to advanced complex software technology. This is an exception to the rule-- U.S. soucred IT industry dominates the world. Even the Japs got caught with their pants down and are having big trouble getting their Internet act together. )


(Mon Jul 14 1997 11:59)
@...self-fullfilling prophecies
The Internet story stocks continue to fuel the fire of desire ( or is that greed ? ) ;- )

(Mon Jul 14 1997 12:10)
A couple of weeks ago someone came on line here, ( didn't give their name but said that they were some heavy hitter we would all know ) , and said that July 12th would be the day that gold would rise. Has he or she been back?

(Mon Jul 14 1997 12:18)
Is it Syph?
Excerpt from last week's Drudge Report ( ) :


President Clinton's lawyers in the Paula Corbin Jones case are finally asking the question: What "distinguishing characteristic" does she claim to have seen on Bill Clinton's body?

The WASHINGTON POST's Peter Baker in Wednesday editions:

"In a set of interrogatories sent to Jones last week, the Clinton legal team requested a copy of an affidavit she signed describing the physical traits she said she noticed when she was allegedly propositioned by the then-Arkansas governor in a Little Rock hotel room... Jones has never said in public and her attorneys have resisted revealing that detail, deeming it one of their trump cards."

Jones has 30 days to respond.

This space was first to reveal the theory that the "characteristic" is a bald eagle tatoo. An Arkansas state trooper on the talk radio circuit says he's seen a mole, the size of a quarter, near Clinton's crotch.

But now there is new talk in and around the Jones camp. Word is that the "characteristic" is likely neither. The president has a medical condition that causes skin irritation -- clearly visible to the eye. This, the story goes, is her claim. Jones will ask for an independent physical examination, likely from an urologist. Baker has Bennett flaring up, vowing to fight any such proposal all the way to the Supreme Court, again.

The case will reach the trial stage in early '98 if the President and Jones fail to settle out of court.


EBN spot down 1.50

(Mon Jul 14 1997 12:21)
I saw this in today's electronic Baron's ( ) . Thought it might provide some fat to chew on.....

Wayne Angell, the former Fed governor and now chief economist at Bear
Stearns, forecast this year's drop in gold prices in a December 1996 Wall
Street Journal article. He now sees the price slipping toward a once
unimaginable level near the $230-$250 it costs the more efficient North
American producers to mine an ounce of the metal.

``The main message of the price of gold,'' Angell contends, ``is that the world's central bankers are increasingly prone to increase their holdings of U.S. Treasury notes, relative to their holdings of gold.'' And that is because under the Volcker-Greenspan regime at the Federal Reserve, ``people have come to see the dollar as a very stable currency relative to world wholesale prices.'' So, gold is moving toward an equilibrium point with the low end of world production costs, ``a process that I presume is already three-quarters done.'' That suggests the price would fall below $300, as average production costs rise somewhat to meet it, owing to the need to spend more to tap into increasingly scarce deposits, Angell predicts.

Any comments?

(Mon Jul 14 1997 12:50)
@limit-up!!!!!!!!!!!!!!!!!!!!!or close to it
who made the accurate calls on the grains last week?

Paula Jones
(Mon Jul 14 1997 13:00)

Give me 500 pounds of gold and I'll forget I saw your ginital herpes ( complex - 4 ) ....

Love, Paula

(Mon Jul 14 1997 13:05)

Monday July 14 12:03 PM EDT
NY precious metals mostly weaker midday

NEW YORK, July 14 ( Reuter ) - COMEX and NYMEX precious metals futures were mostly weaker midday Monday,
but volumes were very light.

``There was some trade and bullion bank selling silver, but volumes were light and there's no real feature to the activity
today,'' one COMEX floor trader said.

COMEX August gold was down 90 cents at $321.30 an ounce, though intraday and daily momentum indicators have
been recovering in the past few sessions, while 20-day historical volatility has steadied around 14 percent, up from six
percent back in mid-June.

For now, August gold is seen in a $320.00-323.00 range, traders said, as funds continue to take profits on record net
short positions.

COMEX gold open interest fell 1,969 lots Friday to 214,421 contracts, but open interest is at its highest levels in 18

When gold was trading at $343 an ounce on June 10, the net speculative short position on COMEX was 33,272 lots, but
four weeks later, when gold prices were down to $335, the net speculative short position, including funds and small
traders, was 70,665 lots, according to the CFTC Commitments of Traders data, and since then COMEX open interest
has risen further.

``The net speculative short position on COMEX is probably now 90,000-100,000 lots, more than 50 percent above the
prior record,'' one analyst said.

Including OTC short sales, ``over the last five weeks, fund short sales have probably been on the order of 500 tonnes ore
more,'' he said.

``That is what has broken the gold price, not 167 tonnes of Australian reserve gold sold over six months.''

Gold fixed at a 12 year low last week at $315.75 in London, after news of a sale of 167 tonnes of gold by the Reserve
Bank of Australia, which encouraged more short selling by hedge funds.

In the bullion market midday Monday, spot gold was quoted $320.50/00, compared to the London Monday afternoon fix
at $321.70 and the New York close Friday around $321.60/10.

COMEX September silver was down 8.0 cents at $4.315 an ounce. Last week September silver saw a contract low at

COMEX silver open interest fell 1,705 lots Friday to 96,667 contracts.

NYMEX October platinum was down $4.20 at $391.50 an ounce, but spot platinum in the physical market remained
above $400 an ounce, quoted $405.50/409.50 midday.

NYMEX September palladium was up 50 cents at $153.50, with spot palladium around $165.50/169.50.

One month lease rates in platinum eased a little Monday to around 40-50 pct, but palladium lease rates remained firm
around 80-90 pct, dealers said.

Japanese trade houses reported last week that some Russian palladium had arrived in Japan, but platinum was not due to
arrive until this week.

Russian PGM exports had been suspended for six months. Russia supplies about 60 percent of the world's palladium and
20 percent of its platinum.

(Mon Jul 14 1997 13:09)

Its been said to never short a dull market. With gold and silver selling off a bit and then justing sitting listless in the water it seemed like a good time to buy. I am now officially a gold and silver bug. It is interesting to note that gold is holding pretty well despite the massive strength in dollar / mark. We shall see.

(Mon Jul 14 1997 13:10)
Yardeni Sounding Alarm on Deflation
See 'Deflation Message from Gold?' under Resource Center Lots of cool gold charts, including some of CB reserve levels.

(Mon Jul 14 1997 13:20)
English Pound causing Irish Punt troubles. Just don't use the, "devaluation", word! ERM, EMU, what do all these Es mean anyhow?

(Mon Jul 14 1997 13:22)
For Your Info...

GREECE: Buy the video - DO NOT go in person.

The stories are endless, the bottom line is simple economics. Greece is no longer a place - it is a marketing event. Missed it by 10 or 15 years is my guess.

Tourism represents fully 80% of the ANNUAL greek income stream, they work the event like a cheap carnival, with no intent for repeat business.

Virtually all the ( original ) antiquities have vanished over the years at the hands of the dominating nations ( for which there was no shortage over the last 4000+ years ... Even the stuff in their national museum say "casting of original statue located in the British National Museum, etc." )

It goes on and on and on and on ...

I am thinking of writing it down and posting it on the internet. If I really do a good job I honestly believe one person CAN make a difference and start a wave that can take down a corrupt economy - but, then again, I have always been a careless romantic.

Mike Sheller
(Mon Jul 14 1997 13:26)
ROEBEAR: Blessed are you, Roebear, for you got Pilate dead to rights. It WAS the truth he was lookin' at. DA: Stop your wife NOW. Tackle her. Don't let her buy any blue chip stocks or mutual funds. As for you, to become a goldbug just repeat after me "I renounce paper money and all its devices, I will use it only as a receipt for specie, I will purchase a pre determined amount of Maple Leafs every month, for the next year, no matter what the price, I will not buy any stocks, unless they are mining shares, or unless tipped by THE ASTROLOGICAL INVESTOR, for the next two years, and I swear this on the eternal value of my immortal soul. Congratulations. Now go and buy some gold, and sin no more
POORBOYS: Re Sunspot cycle, I must confess I've neglected it. Will look into sunspots as soon as I find my prescription shades!.

(Mon Jul 14 1997 13:46)
Wayne Angell
MACHf15: Wayne Angell represents one of the oldest and most important Wall Steet brokerage houses. His tune is dictated by the the need to sell paper - which means saying, tainting and distorting market realities. He is obliged to promote market mania of paper assets, and contrarily bad-mouth real assets ( gold ) . He knows quite well both are at opposite ends of the teeter-totter ( as one rises the other falls ) . Should he NOT promote the "party-line," he would be summarily fired! What would you do in his shoes?

(Mon Jul 14 1997 14:06)
You sound a lot more cynical than me. I read his report thinking he could be right as long as the dollar stays almighty. Don't get me wrong, I recently made a big move into gold mining stocks ( they seem to go up faster and further and sooner than the metal ) because I don't think the almighty dollar will stay almight 4ever.

(Mon Jul 14 1997 14:15)
HEY TED !!!!! Isn't today the day you are supposed to get back ??? Just look at what happens to the gold market when you go away !!!!

(Mon Jul 14 1997 14:32)
It seems that a majority of the significant drops in gold have occurred during New York trading hours ( over last 2 weeks ) . Is it mostly north americans that are shorting gold?

(Mon Jul 14 1997 14:37)

Some LBMA data

(Mon Jul 14 1997 15:13)

Robear: Please send your ( 09:53 ) by e-mail to the World Gold Council
They will surely like the idea.

(Mon Jul 14 1997 15:29)
Best way to hide a stupid move

Lower interest rates to make your currency drop; then sell your hoard of gold, to make it look like_____ HEY THEY SOLD GOLD AND THE CURRENCY DROPPED. Right RBA????
By the way whose your adviser? Got a pile of horse manure I want to sell at a big profit.

(Mon Jul 14 1997 15:39)
Can't figure what I was thinking?

RETRACK MY ( 15:29 ) , Can't figure out how I came up with that one??????? Happens sometime

(Mon Jul 14 1997 16:10)
@rich Bill Gates gets richer
Well, it looks like that Billy G. grew his pile by another $1.5 billions
today. MSFT stock went up by 3.9%. Now, if he just moved his today's
earning in gold .. ;- )

(Mon Jul 14 1997 16:27)
Here is the monthly GC7U chart. Say what you will about all things connected to gold; the chart has the final word. Until the last bar begins to change from dark to light, the course remains bearish. A long shadow on the downside with a small solid body at the top would change the picture. Two weeks remain in the month.

(Mon Jul 14 1997 16:34)
A couple of waiteress were heard to say, "Yeah, sex is like
snow, ya never know how many inches yer going to get or
how long it will last. FISHER@02:30 this am. Let me add
my thanks for the great chart.

Worlds Worst Investor
(Mon Jul 14 1997 17:08)
How much longer do we have to keep waking up and realizing, oops there
goes another $1,000+ everyday.
I woke up the other night, chanting "the trend is your friend the trend
is your friend" But just like a gambling fool I keep thinking na
I"ll get it back tomorrow.
Nobody told me PE ratios over 50 were reasonable. He HE HE HA HA HA
Oh well it's only money.

george cole
(Mon Jul 14 1997 17:20)
Projections of $250 gold by people like Andy Smith, Ted Arnold, and Wayne Angell should be seen as targets that they and the financial establishment that employs them would like to achieve. The powers that be are going to throw in all their reserves ( pun intended ) to drive the yellow down to these levels. Their objective is to destroy gold once and for all as an alternative to the greenback in the international currency arena. The kind of blowoff rally to Dow 10,000 now being widely discussed simply cannot happen unless gold is driven below $300.

Whether the Wall Street and banking establishments will succeed in their drive to push gold to $250 is another question entirely. But let there be no mistake about what they are trying to do.

(Mon Jul 14 1997 18:16)
Jack, the deed is done, will let you know what WGC says.

(Mon Jul 14 1997 18:22)
Silver is down again! It's getting harder and harder not to just call it quits and take my loses and trust in the dollar.

(Mon Jul 14 1997 18:28)
George S. Cole; Don't forget you heard $250 from me first. About October 1996. Amazing how these Johhnie comelatelys get the credit for mimicking my views.

Paul Smith
(Mon Jul 14 1997 18:41)
Worlds Worst Investor ( @LOOOOSEEEER ) :

Re: How much longer do we have to keep waking up and realizing, oops there goes another $1,000+ everyday.

Welcome to the club ! By the way, I'm very upset that you're stealing what I thought was my title !


The Wizard
(Mon Jul 14 1997 18:50)
@ Oz
The Central Banks do not have a monopoly on truth, or the markets.

(Mon Jul 14 1997 18:52)
We must ask ourselves the Questions 1 ) Can the powers that be drive gold to 250 2 ) If we believe they can why are we in gold. If we believe they cant and this mkt is like a spring that will rocket when the time comes then stay the course.

(Mon Jul 14 1997 18:55)
Selby, would you hazard another prediction? Such as how long gold will stay at 250, where will the XAU be, will Santa bring Goldbugs a present this year?

(Mon Jul 14 1997 18:59)
A Oz
Current speculation about $250/oz. gold, reminds me of 'shouting assurances' that it would reach $1,000/oz., in Jan. 1980. Has anything

(Mon Jul 14 1997 19:08)
French Frank and Irish Punt going head to head, err, I mean Punt to Frank, or is it Frank to punt?

Damn those trading bands!

Mike Sheller
(Mon Jul 14 1997 19:10)
faith troops
WW: Well Put. GEORGE S. COLE: The dow can easily rise to 10,000 without a gold smash. Indeed, history demonstrates that gold rises during the last segment ( and a very small segment ) of a stock bull market. So rising gold from here would more than anything indicate an approaching stock top. Until and UNLESS gold starts to rise, stocks will continue to reign supreme. WHEN gold STARTS to rise, it means stox days are numbered.

(Mon Jul 14 1997 19:16)
Roebear: Sorry, I think I've done all I can.

(Mon Jul 14 1997 19:20)
THE DINES LETTER (July 14, 1997)
Of Japan's $220 billion in foreign-currency reserves, 76% is now in US dollars. Nippon legislator says Japans gold reserves far too low. Dines ALL-GOLD REPORT has interesting insights:

(Mon Jul 14 1997 19:21)
Depending on your position, you could elect to buy puts on stocks that you hold or short against the box. Shorting against the box means that you short the exact number of shares that you are long. This effectively means that you make no money going up or down. You do this to lock in your present gain or loss, usually for tax purposes. You can also sell calls on stocks that you own, but you run the risk of losing the underlying stocks for what might be a small premium now. Another alternative for those holding a basket of stocks would be to buy HUI puts or XAU puts depending on the make up of your portfolio. A varation of portfolio insurance. Now, if I just took my own advice! :- )

One last comment. The moment any of you do this, I guarentee that your stocks will rise. :- ) )

(Mon Jul 14 1997 19:22)
It looks like my technical rally has petered out.

George Cole
(Mon Jul 14 1997 19:22)

I doubt the Anglo-Saxon financial establishment will be able to drive gold to $250, but the possibility cannot be ruled out entirely. The savagery and tenacity of the shorts' attack only makes sense if they believe they are operating in accord with the establishments' wishes.

On the other side of the equation there is great support for gold in Asia and other parts of the world. And the U.S. establishment does not always achieve its objectives which can change vastly from one generation to the next. I SUSPECT THE CURRENT OBJECTIVE OF DRIVING GOLD DOWN TO $250 TO SUPPORT A HUGELY OVERVALUED STOCK MARKET WOULD NEVER HAVE BEEN CONSIDERED BY THE FINANCIAL ESTABLISHMENT 20 YEARS AGO. But we live in very unusual times.

If we are to win this battle, we must understand the forces opposing us -- their resources, objectives, and tactics.

(Mon Jul 14 1997 19:29)
one month lease rate up again today.

(Mon Jul 14 1997 19:32)
Think about this

If gold goes to $250, it's still about seven times higher than when the tricky guy closed the gold window; while our living costs have probably increased about 3.5 times.
This has occured with massive currency support schemes ( remember Volker ) and simularly major attempts to drive the gold price down.
The result of Europe's large unemployment figures could be the result of those efforts; and perhaps not making the muster for EMU.
Now the USofA is so desperate, that they have promoted the low cost third world to solve their real inflation problems.
It's still the same mean world, they are just using different tactics.
Could be why the less developed countries are buying gold. More power to them.
The fair bottom price for gold is $600 bucks, from there I don't know the limit. It ain't up to us

(Mon Jul 14 1997 19:43)
also__whew, not my day

We must also consider the amount of government debt and currency in circulation, plus inflation about two years before the tricky guy closed the gold window.

(Mon Jul 14 1997 20:08)
@calling George Soros
Panda, Can you shed some light on all the action going on in currency. I do not know much about currency markets, is there a hope for gold in all this and why? Hope I'm not picking on you, thanks for the posts!

(Mon Jul 14 1997 20:12)
But a very overdue meaningful correction is on the agenda. After all, stock market here is ONLY priced at something like 2.5 times gross world product ( of all nations ) . SEE:

(Mon Jul 14 1997 20:34)
If this were a normal mkt I would be bullish as hell and probably, given the commitment of traders, it would not have reached this level. The issue is the power,intent and ability of those apparently savaging and propagandizing against this mkt. It has almost reached hysterical proportions but the pattern of trading continues day after day when such things as the COT and sentiment indicators tell you it shouldnt. Ditto for stks ONLY IN REVERSE. Anybody who follows these mkts can clearly see the patterns. DO THEY HAVE THE ABILITY TO DO CONTINUE WHAT THEY ARE ATTEMPTING TO ACHIEVE?? Comments!!

Lan Man
(Mon Jul 14 1997 20:36)
$ilver Indicator Gone Haywire?
With Silver down to around $4.28/oz, wonder what the silver stocks are trying to say: PAASF @ $6.375 and SSRIF @ $3.375 and CDE @ 13.125 - all three up today. Either silver is heading back up soooooon, or one of my indicators has broken down - big time. Maybe just a little exuberance on the part of stock purchasers thinking that they are getting in at the bottom...

Could be wrong, but I just can't see that the bottom in gold has been put in, too many think that they are getting in for the long ride back up. Gold will at least retest the low teens and if that holds, will commit my trading funds back in. Still holding the jr's though.

The 60-year cycle says that this christmas should be a belly full of laughs for the goldbugs...

(Mon Jul 14 1997 20:50)
Not being Anglo or Saxon ( as far as I know ) but mostly Celtic I think the recent concern about $250 ( and with recently found conspirators ) is a bit late. The handwriting on the wall was there for all to see many months ago. While it was popular to state gold was going to 500-600 --"up" for sure--no one could answer the question "Why not $250" Some did try here to find a resonable retort to the unpopular question but the conclusion was available for all to see last fall. Empty hopes for a major rise were popular but there was no reason at all to prevent a decline. The difference was just hope. Well hope wasn't enough. The current "cost of production" may well be above $250 now-if so the bottom is higher than 8 months ago. There is no immediate reason for gold to rise. There is no immediate reason to have its decline reversed. The problem is not the unidentifiable "forces" that control gold's price. The problem for us is that gold is and has been out of favour for months--actually almost 2 decades. It is reaching a bottom I believe as it gets close to the cost of making the stuff. Too bad nobody knows what the cost actually is.

(Mon Jul 14 1997 20:59)
The CATO Institute examines the varios types of gold standards possible

(Mon Jul 14 1997 21:03)

So this is what its like to be a gold bug! A few seconds of fleeting glory when your position is ahead 30 cents then squish. Down like a stone in a heartbeat, then a little itty bitty rally at the close to keep you wishing for tomorrow. Wait, I know these feelings, its just like being short S&P's. You never win.

Truth be known, I'm more a silver bug than a gold bug. Someone posted that Mr. Gates's already staggering pile of paper wealth increased by something on the order of 2 billion today. It is a sobering thought to consider that a single solitary person made enough money on one random day to buy nearly all the silver bullion in the world. It on this extraordinary arbitrage that I pin my hopes. Sooner or later a man with metalic tastes is going to decide to have the silver market for lunch. In the mean time, I hope I am not someone elses appetizer.

Once again the gold lease rate has headed higher. Why do you suppose that the most hated investment vehicle is getting harder to come by?

I know that I'm wishing and hoping and grasping for straws, but I noticed that the TRIN was over 1, with the stock market being up today. I don't recall seeing this kind of action in quite awhile but truth is I don't watch it very closely. The feel of the stock market seems to be changing as does the sentiment. The one thing that stands out is that no one can come up with a good reason why stocks might go down other than that they are at high valuations. The flip side is obviously gold. No one can come up with a good reason why it should go up. I can't either. But then that's good.

My partner ( boss ) has been over in Europe the past week talking with some of our clients and trying to scare up some new ones. The sentiment over yonder with regards to EMU is interesting. Although few people seem to feel that it is viable to take disparate economies and political systems and shoehorn them into the same monetary policy, there is overwhelming feeling that the politicians will at least get it to occur. What startles me is that at every opportunity the electorates of Europe have effectively voted against EMU. Since the German people will also get a chance in a years time to have their say, and they perhaps have the most to lose through EMU, I can't quite understand how they are not going blow the whole thing right out of the water, if the currency markets don't do it before they get a chance. How was that for a run on sentence.


I owe you an email and will endeavor to write ASAP. Hope all is well with your wife and the fiddle to be.

(Mon Jul 14 1997 21:07)
Roebear -- Picking on me? :- ) )

The reason I watch the currencies is because I believe that gold is a currency. The ultimate currency, IMO. Consider if you will, that we all work for this fiat money as a store of our work. That 'store of value' will be exchanged in some future transaction to obtain a good or service. If the authority that issues the fiat money can revalue that money at any time, how good a store of 'value', or more precisely, 'store of past effort' can it be?

So we have before us, governments adjusting the relative 'worth' of their fiat money with respect to one another in order to prevent trade imbalances, or worse. Who are these 'speculators' whom the governments and central banks despise? Remember, this is your 'work' that they are re-pricing after the fact ( after you've been paid! ) . The speculators see an obvious imbalance and attempt to profit by it. Market forces then correct the imbalance or expose the charletan for what he is. Somewhere along the way, the 'full faith and credit' clause of the respective governments gets damaged and gold tends to look pretty in the eye of the beholders. In general, stock holders are blind to this fifty pound market sledge hammer, known as currency volatility. :- )

Bond holders, on the other hand, sense the danger quickly. Then again....

(Mon Jul 14 1997 21:08)
WW: The anti-gold bugs have the momentum now, but it can't last. It takes much more money to buy the dow today, than it did last year or 5 years ago. The ferocity of the gold shorts and the ebullience of the paper longs must of necessity be limited by the law of diminishing returns. This is why we saw wave after wave of rolling corrections in various sectors last year. ( Anyone remember the tech disaster? ) This is why the mid and small caps are not growing as fast as the blue-chips held by the index funds. The pros and the big bucks are using momentum and favorable press to keep the game going. Bill Buckler is collecting stats that will show, I think, that the individual investor is now moving into the coin and bar market avidly. If true, the winds of change have begun to blow. Meanwhile, I will attempt to make money on stocks but buy insurance in metals.

(Mon Jul 14 1997 21:12)
@ the golden moment
To all.... Thank-you America for making our gold purchases a bargain.
We will insure a higher price by the end of our day. It's a very good trade... U.S dollars for Gold

(Mon Jul 14 1997 21:22)
@ Dow correction
Just received my latest copy of Individual Investor. Arch Crawford,
who espouses "market timing by planetary cycles and technical analysis," thinks "stocks are vulnerable." Crawford, who called both
the August, 1987 top and October, 1987 crash, predicts "a 35% to 50%
drop within the next 30 months."

(Mon Jul 14 1997 21:23)
This is kind of like an Red delicious apple compared to a Brisbane apple but, here it goes. The XAU index compared to the Amex gas and oil index, with the ratio shown. Cute divergence. So if the Dow is to go up, so must the oil stocks. What about oil? What does this mean for the almighty Dollar? And gold? Punts, Franks, Marks, Pesos',.... Does anyone remeber the little currency turmoil we had about a year ago? I believe that Bloomberg radio was reporting at that time, that a run on the Dollar was a strong possibility. It never materialized, but the public announcement of the THOUGHT that it might happen, was quite interesting. Of course the Dow is a few thousand points higher now.... So don't worry, be happy! :- ) ) :- ) )

(Mon Jul 14 1997 21:28)
Oracle AT JAPANESE SURVIVAL Part - IV (14 July 1997)
Financial Fairy-tale or Expedient Global Monetary Necessity: Global Gold Standard?! STARTLING IMF data demonstrate its feasibility. BOJs T-Bond holdings is the keystone for success. EMU member participation essential.

(Mon Jul 14 1997 21:29)
This is one depressing day here. I agree that the powers can and may drive Gold well under the price of production to 250, but it will cost them
dearly to put thousands of miners out of work.
If things are as bad as some say, why are futures still carrying a premium. Contango? As with other commodities, this is what should be happening. Something is going on and I don't think anyone can clearly point to it yet. Probably a combination of many factors.
Meanwhile someone is still buying up the massive amounts of shorted Gold at these prices? Why hasn't the price already fallen further,
with the daily bombardment of negative news?
I will personally continue to hold my Dec calls until Nov, and let then expire if that's what happens.
The shorters may bag the little premium in the end, or they may be paying out big time. I know what side im on.

(Mon Jul 14 1997 21:29)
@bottoms up?
A trendline case for THE gold bottom and a possible HUGE rally to come:

(Mon Jul 14 1997 21:31)
SPEED: The ratio is 24.69 today. The highest reading of this cycle remains 25.06 on July 8th at 10:30 AM. The Dow has been dropping faster than gold since the 8th. It is much too soon to identify that date as the top though.

(Mon Jul 14 1997 21:31)
D.A.: Did your model switch to a buy for gold?

(Mon Jul 14 1997 21:41)

No, it was only the foolish romantic in me that made me do it. Rest assured that none of our investors funds will be subject to such folly. For them the systems rule.

(Mon Jul 14 1997 21:44)
Moregold: I don't see a lot of negative news about gold. Except for the expected and usual comments about mines closing and jobs lost most of the comments I see are the reasonable and expected results of gold's price declining. Sure they have some effect but I think the big issue is that
gold continues to decline for almost 20 years and it is declining very quickly now. If you accept that the "economy" -not just the US economy-- is growing at the moment then that is what to expect. Gold will not get too far below its cost to mine and after that it will rise. The problem you run into is that the valid reasons for gold to rise are logical but not current and are premature. If you think of it--all predictions and premonitions based on graphs, or the stars for the past 18 years have been premature. This doesn't mean they are wrong just not current. There are no immediate, current reasons for gold to rise as far as I can see. The bald undeniable fact is that the people who will make gold rise in price and with it gold mine shares --don't want to buy any now. That's it. Price drops. Only stop is a change in attitude or a decline to the cost of making the stuff, Pure capitalism.

(Mon Jul 14 1997 22:26)
panda, you are right, I would never pick on you, your posts have done me too many favors including moral ( e ) support. Extending the explanation, are there enough little hammers ( Thailand, Phillipines, Punt/Franc etc. ) to grow into a 50 lb sledge? Or am I grasping at sledge hammers ( see my portfolio for that answer !: ) )

(Mon Jul 14 1997 22:39)
panda, I missed your 21:23, yup, that's the 50 pounder I'd like to see ring the bell.

(Mon Jul 14 1997 22:54)
Hey blokes,Oz government is about to do away with inflation? Sound familiar? Go to

(Mon Jul 14 1997 22:55)
Baht and Yen problems?
One thing I didn't thing about when I first saw the Baht ( and other SE Asian currencies ) start to head south: the Yen has a big role in that part of the world. Here's an interesting article showing a possible "crisis" for the yen if the baht remains unstable.....

(Mon Jul 14 1997 22:59)
now for something completely different....
While the rest of SE Asian currencies are in the dumper, the Indian Rupee seems to be going up too fast.....hmmmmm......

(Mon Jul 14 1997 22:59)
@ Keep Your Heads Down:
RT: Wow! Someone mentioned earlier about a "battlefield". Could you do a translation on the Weekly Gold Chart?

(Mon Jul 14 1997 23:05)
OK I'll play a silly game,I did it wrong.Help

(Mon Jul 14 1997 23:13)
Terry: You left out the colon, this should do it.

(Mon Jul 14 1997 23:14)
Celtic-Selby 20:50
I'm trying to understand what Anglo-Saxon & Celtic have to do with $250 gold. Please explain...and are talking as though gold is @ $250. That is $70 away. So what you're saying is that ( and I'm assuming that with your prediction that you backed it up with $$ ) you have already made $7000 per contract ( $10=$1,000 ) and it's in the bank?? Right? Wait...we should be using Oct '96 when gold was at $395/oz. That is $145 or 14,500 per contract. So being Celtic-you made a shipload of $$$?? Righty?? Oh I don't know, I am just a stupid California-surfer-johnny-come-lately-Dude.

Away..until I get pounded by everyone...


predictions are like bums...everbody has one

(Mon Jul 14 1997 23:17)
I see said the blind fella. Thanks

(Mon Jul 14 1997 23:26)
Fidelity Select American Gold & Precious metals Chart.
Ten market days ( seven hours / prices per day )
Technical bounce or time to scale UP???

(Mon Jul 14 1997 23:30)
EB: I don't know what Anglo Saxon has to do with the price of gold--ask George Cole @ 19:22. I did not make a lot of money shorting the market I'm too conservative--I just sold most of my precious metals stocks and avoided the 50-60 $ loss. Its all in the Kitco archives. You can search manually now for the discussion or wait for the search feature to work again.

(Mon Jul 14 1997 23:30)
George S. Cole @19:22: Your comments sound almost like a call to arms. I like that idea. I only wish my purse were equal to the contest.

(Mon Jul 14 1997 23:52)
D.A., you goldbug, you!
The maxim about shorting a dull market is an excellent rule of thumb. I wonder which market you are talking about? Remember, gold hit a 12 year low one week ago. I think it might be wise to wait a bit before declaring this market dull. In fact, this is one of the more exciting three months I have seen for a long time. I read the static trading of gold to be further evidence of weakness. We all agree that 320 gold is a pretty good price, but no one seems to want it. I dont think we will see serious buying come back in until we break 300. Once there, the trade will be to catch the rallies up to this level. You think gold is low? Before long, everyone will by whooping it up and praising the gods that gold has soared to 320. Hallelujah!

Good luck on your new venture. Very soon you will have the pride or dimay that only gold ownership can bring.

Stonewall Jackson
(Mon Jul 14 1997 23:57)
GS Cole: In what remote corner of the galaxy is the financial establishment "Anglo-Saxon"? Certainly not Great Britain or the USA.