9p EDT Tuesday, December 5, 2000 Dear Friend of GATA and Gold: We've broken into the mainstream press in Australia in a big way with an article published in the December 6 issue of the Australian Financial Review. It appears below and is stunning for its reporting exactly what GATA Chairman Bill Murphy has been saying for a long time now. Meanwhile, a friend of GATA, Mike Waters, sends news of some interesting comment on CNBC about manipulation of the gold market. That appears below as well. The word is getting out. Also of interest and included here is an article from today's Financial Times in Canada. As for our challenge to the Bank for International Settlements, GATA hopes to have an announcement in the next week or so. CHRIS POWELL, Secretary/Treasurer Gold Anti-Trust Action Committee Inc. * * * Australian Financial Review Wednesday, December 6, 2000 Gold Conspiracy The spike in gold stocks yesterday reflected in part the strong inverse correlation between the gold price and the U.S. dollar as investors look toward a peaking (at long last) in the greenback. Thanks to its acute $US hedging position, Newcrest Mining rallied strongest, up 40 cents to $4.55. It was also buoyed by ongoing talk it many be a corporate target for the likes of South African groups AngloGold and Gold Fields. The more interesting aspects are the conspiracy theories circulating in global commodity markets. Between October 26 and Novemeber 24 gold traded within a $1 range of US$266 an ounce, a trivial trading band compared with the uncertainty swarming in equity markets. The theory is that the Federal Reserve -- with the aid of Goldman Sachs and Chase Group -- is intervening in what should be a free market and beating down the metal within an inch of its life. Why? Net short positions held by financial institutions are astronomical. One analyst reckons it would take 10 years of supply to satisfy demand if all contracts were closed out and physical demand had to be delivered. The big orchestrated attempt to cripple the gold price is also an attempt to make sure money isn't ripped out of U.S. equity markets, thereby exacerbating falls. * * * Dear Bill: Have you actually heard anyone on CNBC actually admit that the gold market is being rigged? Well, it happened on Friday morning about 9.30 European Time. Last spring Phillip Manduca, a respected fund manager from Tilney Investment Management, expressed a positive attitude about gold's prospects but thought it might not happen until the autumn, when the Fed's interest rate hikes had run their full course. So when he reappeared yesterday I took the opportunity to drop an e-mail to CNBC asking what he thought now. Manduca is a no-nonsense type of person who tends to call things as he sees them. In typically unequivocable fashion, he said the supply of gold is being controlled by the central banks with a view to confusing the message on inflation. This is definitely a new tack for him. He said that for this reason he would not touch gold for the next six months or year unless it breached the $320 mark. It is a shame that he did not seek to comment on the ethics of the central banks' actions, but at least the message seems to be getting through. Kind regards, Mike Waters * * * Gold lures tech-weary investors Bullion not a factor; pressure on U.S. dollar is good news for gold stocks By Peter Brieger Financial Post (Canada) December 5, 2000 As mighty tech stocks continue their free fall and the U.S. dollar shows signs of weakness, gold has been holding a big party for prescient investors. The Toronto Stock Exchange 300's gold and precious metals subgroup has outperformed the broader index by about 25 percent since the start of November, putting a shine back in the embattled sector. In the last month, high-profile gold equities, including Barrick Gold Corp., Placer Dome Inc., and Franco-Nevada Mining Corp. have all seen their share prices surge more than 15 percent, but it's downtrodden Kinross Gold Corp. that is shining the brightest, rocketing almost 60 percent. Many analysts thought Kinross was doomed to join a host of gold stock casualties, said John Embry, vice- president of Canadian equities for Royal Bank Investment Management Inc. "So any time there is some relief in gold prices, Kinross shoots right up," he said. Bullion prices, the usual suspect in gold stock rallies, are not the key factor this time: Gold is up only about US$6 in the past five weeks. It closed in New York yesterday at US$270.70 an ounce, up US$2. Instead, some analysts are pointing to a weaker U.S. dollar and softening economy south of the border. "When people are worrying about the usual things in the economy, gold acts as something of refuge," Mr. Embry said. With the U.S. trade deficit ballooning to a record level and threatening to send the U.S. dollar for a tumble, the news is good for gold equities, according to UBS Warburg economists Catherine Gignac and Ludo Van Hijfte. "Expectations that the U.S. dollar may weaken on the back of this negative economic news are positive for gold ... due to the strong historical inverse correlation between the U.S. dollar and the U.S. dollar-based gold price," they advised clients in a Nov. 22 report. As the greenback falls in value against world currencies, including the euro, gold becomes a cheaper buy. Add a tumultuous tech sector to the mix and you've got fertile ground for gold growth. "I think the market is telling you that there are very few places where you can hide your money," said Martin Roberge, a quantitative analyst with National Bank Financial. That point may also apply to portfolio managers who want to lock in tech sector profits, but can't keep more than 10 percent of a fund's holdings in cash. "They can't put it all in cash any more," Mr. Roberge said. "That's the reality of the equity cycle in the '90s. When they held too much cash in the past, some portfolio managers got fired -- they're not paid to hold cash." However, Mr. Roberge is disturbed that while gold equities are up sharply, gold prices have barely moved -- and the gap seems to be widening. Historically, gold price hikes follow an upward move in gold equities. "Otherwise you'll face negative earnings revisions going forward," Mr. Roberge said. "To get these stocks rising more you'll have to see more weakness in the overall global equity markets, weakness in the U.S. dollar coupled with strength in gold prices." Yesterday's ongoing surge in gold stocks -- a 3.6 percent gain for the index -- coincided with broader gains in Old Economy sectors, with similar gains for oils, metals and forestry stocks. -END- -------------------------- eGroups Sponsor -------------------------~-~> <FONT COLOR="#000099">eLerts It's Easy. It's Fun. Best of All, it's Free! </FONT><A HREF="http://click.egroups.com/1/9699/0/_/126/_/976069070/"><B>Click Here!</B></A> ---------------------------------------------------------------------_->
