Fishing around on Golden Pond -- What's Up Doc? Hey, Andy...still around? : LUSENET : TimeBomb 2000 (Y2000) : One Thread

Well, we all know there are gold bugs hangin out here on the forum, though I don't think Andy's been around much lately but if you read this Andy, check in and say howdy.

The Gold market has been trading sideways since November/December. That sideways pattern changed the first of February when the market spiked upwards. The recent spike created a WEDGE pattern in the daily bar charts that usually comes in the middle of a move or leg in a longer term move. Measuring the Wedge formation for some idea of how much further prices will go before a downward move may develop indicates the market could or should go to between $330 to $340 (basis the February contract).

Oscillators though are suggesting the market is looking a little overbought here on the temporary side. I suspect this will signal perhaps another $5 - $10 downward movement is possible as it tests $300 for support before working its way back towards $320 and beyond. Such a move to $330-340 will probably not get off the ground for several more days yet. Failure to hold about $295 during the test of $300 will negate the signals (IMHO).

The DMI is looking very strong here. The Commodity Channel Index just recently issued a "buy" signal and that also is very bullish. The market has made a new 45 bar high as well as a 9 bar high, so that too points to higher prices by the end of February or early March.

Fundamentals: The news about derivatives and also recent actions relating to the hedging by miners and central-bankers and gold brokers on the short-selling side has been very bullish for the metal. The chart formation though indicates some really strange price action which to me would suggest abnormal downward action that would suggest manipulation by short-sellers on Tuesday after the big run-ups.

I also suspect that Gold is now tuned and running in sympathy with oil's bullish market run. It certainly seems to be deriving some support with Oil.

[Note: My comments are not intended as trading advice nor as recommendations. These are simply my own observations and opinions which can certainly be wrong at times]

-- Dick Moody (, February 13, 2000


Dick I would say turbulance in the gold market. Much like a YoYo lately.

 AltaVista Live : Dummy category : Gold runs into selling, falls below $310< font face="ARIAL,HELVETICA,SANS-SERIF">

Gold runs into selling, falls below $310


By Marius Bosch

LONDON, Feb 11 (Reuters) - Gold ran into heavy selling around $317.00, forcing the price almost seven dollars lower in late European business on Friday, dealers said.

Spot gold weakened to below the $310.00 level from near 3-1/2-month highs after trading began in the U.S. as longs sold in a thin dealers said.

"There has been this aggressive-style buying that has been coming out of a couple of trade houses that took it up there ($317.00), but it seems to run into a wall of selling," one dealer said.

He said some of the U.S. trade institutions may have found themselves on the long side which saw some liquidation.

Dealers said the market remained nervous in the wake of a series of reports from gold miners this week indicating reduced hedging activity.

Friday's morning fix of $316.50 was just 10 cents off Monday's $316.60 which was the highest fix since October 18, 1999. Gold fixed down at $311.50 in the afternoon.

Spot gold was last at $308.70/$$310.70 from the $315.55/$316.55 New York close.


Dealers said market sentiment has improved after major producers, including the world's largest gold miner AngloGold Ltd , indicated they were reducing or trimming their hedge positions this week.

But the market is still concerned about the future of troubled African miner Ashanti Goldfields Co Ltd , which faces a deadline to pay up for derivatives contracts from its hedge counterparties on February 17.

Ashanti suffered massive losses on its hedge book after gold spiked to two-year highs last October. A Ghana court this week blocked a key refinancing plan. Ashanti had been due to sign a $100 million loan, needed to pay for work on its promising Geita gold project in Tanzania.

Now, under the court ruling in action brought by dissident shareholders, the company will have to wait until after an extraordinary general meeting, called to consider the composition of the board, which must be held within 21 days.

Dealers said market players were establishing long positions ahead of any Ashanti outcome.

"I can't see gold coming of too far without buying coming in because the Ashanti thing is still overhanging the market," a dealer said.


Hedging was profitable when gold headed toward 20-year lows around $251.70 an ounce last August. But it caused huge losses and shareholder revolts against some mining companies when prices soared after an agreement last September by European central banks to limit gold sales and lending for five years.

Palladium's recent strength continued. It was last quoted at $587.00/$597.00 from the New York close at $575.00/$585.00 and platinum at $542.50/ $549.50 from $541.00/$551.00.

Dealers said palladium moved higher on good demand in a thin market with Japanese traders absent due to a Tokyo holiday but failed to hold onto higher levels just shy of the $600 level after a surge in U.S. palladium futures on Friday.

The platinum group metals have rallied sharply since the start of the year with demand soaring, mostly from car companies needing the metals to fabricate autocatalysts to clean dirty exhaust gases, and little or no metal arriving from Russia.

Silver was quiet, following gold lower and was last quoted at $5.28/ $5.31 from the New York close at $5.35/$5.38.

-- Brian (, February 13, 2000.

Response to Fishing around on Golden Pond -- What's Up Doc? Hey, Andy...still around?

Hong Kong view.

Asia Gold-Market tone turns positive on producers


By Kenneth Barry

HONG KONG, Feb 11 (Reuters) - Major gold producers' aboutface on hedging their gold has lent a positive tone to the market, which could bring higher prices, traders said on Friday.

Gold was up nearly $30 from a week ago on talk of producer buybacks and after news of dramatic changes in the hedging strategies of some of the biggest gold producers.

The price fluctuated widely in reaction to each variation on strategies on forward gold sales as a hedge against price risk.

"The mentality within the mining industry is going through a review," a trader said.

AngloGold Ltd , the world's biggest gold miner, said on Thursday it had significantly reduced its hedge cover and would continue to do so. Days earlier Placer Dome , North America's third largest gold miner, said it was suspending its hedging.

The reassessment comes after a period of years in which producers' hedge books have grown tremendously and added selling pressure to the price of gold.

Now, a significant percentage of the world supply of gold for the next five years has already been sold because of hedging, traders said.

"Among the serious producers there was a sense that the accelerated supply was damaging the underlying basis of their business," a trader said.

Gold reached a three-month high of US$319 on Monday in response to Placer Dome's news, but traders were cautious about asserting the start of a bull run.

"Whether the price will continue going up is anybody's guess, but it is clear the pressure now is on the upside," a senior gold trader said.

He said physical demand for gold was sound because of jewellery sales in Europe and in the United States, which has been supported by the buoyant U.S. economy.

Spot gold was quoted at US$314.00/315.00 an ounce at 0430 GMT. Trading was quiet with Tokyo closed for a holiday.

Recent fluctuations in gold's price were a reflection that not all large producers were abandoning hedging.

Barrick Gold Corp said it would continue to use forward sales but would not increase its hedging.

Another producer which the market was watching closely was Ghanaian miner Ashanti Goldfields Co Ltd .

The company said on Thursday it was talking to its banks and other backers after a court blocked a key refinancing plan.

Ashanti was struggling with large losses on its gold hedging book and there was speculation it was buying back gold to unwind hedges.

If Ashanti were to fail, its bullion banks might be hurt and gold supply would temporarily be taken from the market, which would boost prices, a trader said.

But Ashanti's problems were mainly limited to its earlier unwise hedging, the trader said. "I don't think anyone questions whether Ashanti can be a profitable mining company again."

While the market's tone has become positive, "it is hard to get wildly excited," the senior trader said.

"We are only going back to where gold was trading in 1997," he said.


-- Brian (, February 13, 2000.


Somehow, as a proverbial gold trader for many years, I've never seen gold fail to be driven by screaming oil factors. Oil doesn't have much impact on Gold unless Oil is in "crisis" mode. When oil goes into crisis mode Gold reacts either positively or negatively dependant upon what kind of crisis it is for oil. Same is true for the dollar/forex trading at times and it used to be true for stocks and bonds on the inverse. But Gold has detached itself from reality gradually for several years now from almost all fundamentals.

While the gold-shorting scandal helped spike the market, those same forces are still business as usual knocking the price of gold back down, even now. Until this illegal action is permanently stopped, the gold market will be at the mercy of cheaters and frauds who will keep gold in a perpetual trading range.

Check out the latest article from Sherman Skolnick's investigations on the role of George Herbert Walker Bush (ex-Pres)and his pal Alan Greenspan. Skolnick claims to have documentation that links Greenspan and the Fed Reserve involved in all sorts of illegal funding of Fed money to Bush and Bush's corporate interests including the Gold shorting fiasco now underway. It will be interesting to see of Skolnick's 300 copies of Fed Reserve Bank Wire reports will get the ball rolling to convict anyone or if the documents were leaked to simply stop Bush's son George Jr. from gaining the GOP nomination. Skolnick has even posted some photocopies of the Fed wire reports to prove that he does indeed have the documentation.

Take a peak at Skolnicks' article Part 1:

Here is Skolnick's website:

-- Dick Moody (, February 13, 2000.

While I like gold and silver, and expect that unhedged/lightly hedged precious metal stocks are into a full scale bull market, buying gold is basically a bet against the current status quo as managed by TPTB's PPT (see post on Plunge Protection Team posted yesterday to this forum).

It appears that "they" have put everything they have into stalling or derailing a gold price move upward. A bull market in gold will have dire historical (maybe Biblical) consequences if the multi-trillion derivative markets impact negatively. I believe this is what drove the Bank of England to sell some of their gold reserves last fall and what has driven a wedge between world leadership. Currently it appears there is no consensus between the G 7 or even between the US FED and US Treasury.

The failure of a managed market will have dire consequences for all.'s day's of glory appear numbered as more and more new buying with more money is needed to sustain a continued rise in price. As the stocks go up it takes more money to buy the more expensive shares. This cannot go on forever as there is not an infinite amount of money.

Increased inflation seems sure and hyper inflation a posiibility; while the prospects of deflation ("cash is king" scenarios postulated pre-Y2K) now seems to be much less than slim.

-- Bill P (, February 13, 2000.

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