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I was wondering the same thing. Is S.I. Long-Gone?
To:John Barendrecht who wrote (538)
From: mikesloan Tuesday, Jul 15, 1997 2:49 PM
Respond to of 82910
Check the gold chart. POG is $317.90 down $2.00
To:Alex who wrote (536)
From: Bobby Yellin Tuesday, Jul 15, 1997 3:01 PM
Respond to of 82910
wow...is Japan trapped into doing what the USA wants to do? with the dollar? yen? gold? because of its position...never even thought of this
To:Bobby Yellin who wrote (543)
From: mikesloan Tuesday, Jul 15, 1997 5:30 PM
Respond to of 82910
Study Shows Mining Generates $5.1 Billion for Oregon's Economy
SPOKANE, Wash.--(BUSINESS WIRE)--July 15, 1997--The mining industry had a combined
direct and indirect impact on the economy of Oregon of $5.1 billion in 1995, according to a new
study released today by the Western Economic Analysis Center, Marana, Arizona.
``The study, Everything Begins With Mining - Mining and the American Economy, shows that
mining has an importance in the economy disproportionate to its size,'' Laura Skaer, Executive
Director of the Spokane based Northwest Mining Association said.
``Mining literally takes a part of nature that has little or no economic value and creates something of
value from it. Much of Oregon's prosperity is due to an abundant supply of mineral resources,''
Skaer said. ``Mining clearly is one of the foundations of Oregon's economic growth. Without
mining there would be no Intel, no Precision Castparts, and no Tektronix.''
A major finding of the study is that people do not have to live in an obvious mining state or work
directly in the mining industry to benefit from mining. In fact, many residents, businesses and
governments in states with only small amounts of mining activity receive large economic gains from
mining in other states.
The study, conducted on behalf of the National Mining Association, for the first time, captures the
direct and indirect results in the economies of localities, states, regions and the Nation as mineral
resources and wealth circulates and recirculates.
According to the study's author, Dr. George F. Leaming, the Oregon mining industry had a direct
economic impact on the state of $387 million, including $105 million in income for other Oregon
businesses and $119 million in wages and salaries for the 2,900 men and women employed directly
by the industry.
The Oregon mining industry also paid $18.9 million in state and local taxes and another $21.1
million in federal taxes. The value of minerals mined in Oregon in 1995 totaled $391 million, the
study showed.
When the indirect economic impacts of mining in Oregon are considered, the industry accounted
for personal income of $1.4 billion for 53,500 mining-related jobs; business income of $2.7 billion;
state and local taxes of $276 million and $633 million in federal taxes.
Nationally, the domestic mining industry generated $48.4 billion directly to the U.S. economy in
1995. This total includes direct payments of $27 billion to American businesses; $14.5 billion in
personal income for Americans, including wages and salaries for the industry's 320,400 employees;
$3.5 billion in taxes and other revenues to the federal government; and $3.3 billion in taxes to state
and local governments.
As the industry's direct economic contributions circulate through the economy, the financial impacts
of mining are magnified. According to the study, mining's direct and indirect impact on the U.S.
economy in 1995 totaled $523.6 billion. This amount includes $295.7 billion in income for
businesses that support mining; $143.7 billion in personal income for the 5 million jobs supported
indirectly by mining; $56.9 billion in taxes and other revenue for the federal government; and $27.1
billion in state and local government taxes and revenues.
``To maintain the standard of living of its people and its place in the global economy, the nation will
continue to need minerals,'' Leaming said. ``Without mining, the ability of the U.S. economy to
meet the needs of its people and maintain its global position would be reduced severely. And so
would the abilities of 5 million Americans to meet their needs and those of their families.''
The Northwest Mining Association (NWMA) is a 103 year old, 2,900 member non-profit,
non-partisan trade association based in Spokane, Washington. NWMA's purpose is to support
and advance the mineral resource and related industries, to represent and inform members on
technical, legislative and regulatory issues, to provide for the dissemination of educational materials
related to mining, and to foster and promote economic opportunity and environmentally responsible
mining.
-0-
Northwest Mining Association
10 N. Post St., Suite 414
Spokane, WA 99201-0772
(509) 624-1158
Fax: (509) 623-1241
Contact:
Laura Skaer, 509/624-1158
Bob Webster, 202/463-2664
http://www.siliconinvestor.com/stocktalk/msg.gsp?msgid=1767477
To:John Barendrecht who wrote (399)
From: mikesloan Tuesday, Jul 15, 1997 2:44 PM
Respond to of 82910
Wool sets a shining example for gold
Australian Financial Review April 28/97
By Stephen Wyatt
The wool market surged last week to hit its highest level
since September 1995. At last, the Australian wool
industry is crawling out from under its mushroom of
gloom.
Wool prices are now 60 per cent above their 1993 lows
and the massive wool stockpile, the result of a disastrous
price support scheme over the 1980s, has been reduced
by nearly two thirds.
Now, Dr Bob Richardson, the man charged with
liquidating the stockpile, could be headhunted by one of
the world's central banks. After all, just as Australia's
wool industry has been burdened by an oppressive wool
stockpile, so too has the world gold market. Massive
stocks of gold held by central banks have been weighing
down the gold price.
Central banks and international bodies, such as the IMF,
hold about a third of all the gold ever mined. More than
34,000 tonnes of it. This is equal to 14 years production
at today's levels and is 10 times annual consumption. The
wool stockpile, relative to the gold stockpile, is a little
heap of dust.
Back in 1991, when the Wool Reserve Price Scheme
collapsed, the Australian Wool Corporation, the then
administrator of the scheme, held more than 820,000
tonnes of wool, about 75 per cent of Australia's
production at the time and just a quarter of total world
wool production.
But the big difference between the two industries is that
wool has gone a long way towards liquidating its
stockpile. It is now around 300,000 tonnes, almost two
thirds less than its peak level in 1991.
The gold industry has hardly begun. Not that anyone
really expects central banks to liquidate their entire gold
holdings. But it is the fear that they are now on the
threshold of liquidating some of the stockpile that has
constantly pressured the gold price lower. In the past 15
months, gold has fallen $US77/oz, or nearly 19 per cent.
If Austria, Belgium, the Netherlands, Portugal, Spain and
the UK were to reduce gold to 10 per cent of their
reserves -- now between 11 and 38 percent -- 2,137
tonnes would have to be sold. If France, Germany, Italy
Switzerland and the US did the same, a further 17,688
tonnes would be sold and this would be the equivalent of
nine years of mining output.
Gold miners themselves suggest that the gold price is
affected more by central bank activity these days, than by
the more traditional fundamentals like political and
economic instability and inflation.
"I think that the correlation between gold and inflation has
been broken a long time ago," said Mr Jack Thompson,
CEO of US gold producer Homestake Mining last week.
"It's more a question of supply and demand and what the
central banks do."
So, there may be a place in central banks for
experienced stockpile managers. And perhaps gold
producers should take heed of the plight of wool
growers. There may be a lesson or two in how wool
growers had to readjust to a sudden rise in supply and
how the price signals they had been receiving were
distorted by demand from the stockpile manager.
In 1991, the Australian wool industry was forced to
recognise that world economic realities were far too
powerful to fight, especially with the collapse of
Australia's biggest customer for wool -- the USSR. The
wool Reserve Price Scheme foundered. With massive
wool stocks and a debt of $2.7 billion, the game was
over for wool growers and their price support scheme.
And worse, wool growers had not received the right
messages from the market that there was, in fact, plenty
of wool in the world. Instead of reducing production in
the late 1980s and early 1990s, Australia's wool
production soared to hit a record 1.1 million tonnes in
1989-90, the year before the price support scheme
collapsed.
For a while, the Australian Government used sandbags to
hold back the inevitable rising tide of market forces. The
floor price for wool was reduced. But still the levy broke
under the forces of slumping demand and over-supply.
The last line of defence was abandoned -- no more price
support, no more wool central bank.
The stockpile had to go. The wool market had to take its
medicine. Inevitably, wool prices collapsed and today
more than 15 per cent of Australia's wool growers are
terminally bankrupt, according to Dr Bob Richardson of
Wool International, the body responsible for liquidating
the stockpile.
But the wool market is in recovery mode. The stockpile
has been significantly reduced, wool production has fallen
dramatically as the price signals finally hit home (albeit,
none too subtly), adjustment has been made for the loss
of the USSR and wool prices are back up at reasonable
levels.
The parallels between the wool story and the gold market
are many.
Already this decade central banks have begun to reduce
their gold holdings. They have sold more than 2,500
tonnes. But the key to further liquidation depends on the
role of gold in the world monetary system. For 200
years, gold was central to international trade and was
unquestioned as a medium of exchange and store of
value.
Now, just as the world economy has dramatically
changed over the past 200 years, so too has the role of
gold as a monetary asset. Some analysts, such as Andy
Smith at Union Bank of Switzerland and Ted Arnold at
Merrill Lynch, argue that gold is losing its monetary
status; that it is less a reserve currency now with the
absolute termination of the gold standard in 1968; that it
is losing its usefulness as a hedge against inflation and as
the ultimate insurance against catastrophe.
Such views have triggered a general fear in the gold
market that central banks will reduce their holdings of
gold. Central bank gold is increasingly seen as a
commodity, as a stockpile hanging over the heads of gold
producers and central banks, just as the wool stockpile
hung over wool growers.
And if gold is viewed more as a commodity and less as a
monetary instrument, then on traditional measures of
valuing commodities, such as stocks-to-use ratios, the
price of gold would be way below where it is today. The
World Gold Council, a body representing gold
producers, disagrees with such views.
It suggests that due to gold's monetary role, then
traditional measures of commodity fundamentals --
measures such as stocks-to-use ratios -- are
inappropriate. It argues that the gold stockpile is a
necessary component of a central bank's asset portfolio.
It is therefore isolated from the market place and these
stocks should be ignored.
In fact, this has been, until recently, the conventional
wisdom in the gold market. Analysts, especially those
that work for stock brokers whose job it is to sell gold
shares, would forecast future gold mine production and
future gold consumption to make their gold price
forecasts. No mention was made of 34,000 tonnes of
gold locked up in the vaults of central banks, nor the
mass of bullion privately hoarded.
But things have changed quite a bit. Union Bank of
Switzerland's precious metals analyst, Andy Smith,
published a report last week entitled, Central Bank
Gold -- The Picture of Less Reserve.
"The official (central bank) attachment to gold has little to
do with gold's advantages as a medium of exchange -- its
"transactions role", Smith wrote. "Gold has long lost its
transactions day-job to hard currency."
In the past 20 years, central bank gold reserves have
hardly changed, while foreign exchange reserves have
risen by 400 per cent.
More central bank gold sales "are certain" Smith argues.
In his view, this is clear from the radically changed
attitude to gold by the Swiss National Bank, the doyen of
central bank conservatism. To Smith, the issue now is
how much, and by what means, will central bank gold be
liquidated.
http://www.siliconinvestor.com/stocktalk/msg.gsp?msgid=1765823
To:John Barendrecht who wrote (537)
From: Pat O'Brien Tuesday, Jul 15, 1997 12:45 PM
Respond to of 82910
John, thanks for posting the article on the "Study of US Mining". Well done.
Respectfully, Pat O'Brien
To:John Barendrecht who wrote (538)
From: Alex Tuesday, Jul 15, 1997 1:22 PM
Respond to of 82910
Gold stocks during the great crash....
http://www.gold-eagle.com/editorials/great_crash.html
To:Alex who wrote (535)
From: John Barendrecht Tuesday, Jul 15, 1997 12:14 PM
Respond to of 82910
NY precious metals mixed early, heavy gold lending
NEW YORK, July 15 (Reuter) - COMEX and NYMEX precious metals futures were mixed in quiet trade early Tuesday, with gold lending to hedge funds and producers continuing to fuel the downtrend, but the platinum group metals (PGM) physical market remained highly backwardated, despite reports the Russians were resuming sales into the spot market.
``There's not much going on on the COMEX floor, but it looks like there's been some producer and fabricator offtake which has provided some cushion, though its not giving gold a bounce yet,'' North American Equity Services floor trade, John Geraghty said.
COMEX August gold was down $1.10 at $319.70 an ounce after the first hour of trade, with the August/September spread narrowing to $3.20 an ounce from $3.40 Monday.
In the bullion market, spot gold was quoted $318.80/30, compared to the London Tuesday morning fix at $319.00 and the New York close Monday around $319.70/10.
But the implied gold lease rate curve became inverted Tuesday, with one month rates, at 2.35 percent, now higher than 12 month rates at 2.16 percent.
``The lease rates just reflect the extent of borrowing by hedge funds and producers to fund short positions and forward sales,'' one senior New York bullion banker said.
``The problem is the higher rates are attracting even more lending by central banks,'' he said.
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.
COMEX gold open interest, at 214,421 contracts Monday, is at its highest levels in 18 months, and net short positions held by funds are at record levels, according to the CFTC Commitments of Traders data.
But OTC market positions are often two to three times greater than exchange-traded positions, and as a result speculative short positions by hedge funds may have increased by about 500 tonnes in recent weeks, an amount equivalent to one year's production by South African gold mines, analysts said.
COMEX September silver was up 0.5 cent at $4.280 an ounce, as the contract continues to consolidate above contract lows seen last week at $417.50. The September/December spread was steady around 6.0 cents an ounce.
But the PGM market remained highly backwardated, despite reports of a resumption of Russiane exports, after a six month suspension.
NYMEX October platinum was up $1.50 at $390.00 an ounce, but spot platinum in the physical market remained above $400 an ounce, quoted $403.00/407.00, while one month platinum lease rates remained offered around 50 percent.
NYMEX September palladium was up $1.55 at $154.00, with spot palladium around $172.00/176.00, with one month palladium lease rates around 80 pct.
Russia's metal export agency, Almaz, confirmed overnight it had resumed exports of PGMs to Japan last week, while Ralf Drieselmann, the head trader at European catalytic converter maker, Degussa, said the Russians had begun offering PGMs in the spot market also.
But U.S. refining sources said they had not seen any offers from Almaz in the U.S. market and in fact believed Almaz had been on the bid on NYMEX September palladium early Tuesday, perhaps to cover short postions.
``The market for palladium especially remains tight, with sponge still at a premium to ingot,'' one refining source said.
Russia supplies about 60 percent of the world's palladium and about 20 percent of its platinum.
To:Alex who wrote (536)
From: John Barendrecht Tuesday, Jul 15, 1997 12:13 PM
Respond to of 82910
Study Shows Mining Generates $524 Billion for U.S. Economy
WASHINGTON, July 15 /PRNewswire/ -- The domestic mining industry had a combined direct and indirect impact on the economy of the United States of nearly $524 billion in 1995, according to a new study released today by the Western Economic Analysis Center on behalf of the National Mining Association.
The study, Everything Begins With Mining -- Mining and the American Economy, shows that mining has an importance in the economy disproportionate to its size, NMA President and CEO Richard L. Lawson said.
``Mining literally takes a part of nature that has little or no economic value and creates something of value from it. Much of America's prosperity is due to an abundant supply of mineral resources,'' Lawson said.
``This study, for the first time, captures the direct and indirect results in the economies of localities, states, regions and the nation as mineral resources and wealth circulate and recirculate,'' Lawson said.
``When you look beneath the surface, everything begins with mining and we're just scratching the surface today,'' Lawson said. ``We want to track the resources in all dimensions and at every step. This study looks at the initial step, from the mine to the first customer. Subsequent studies will follow the added value of mined products through the manufacturing process to finished consumer goods, which will show the comprehensive economic impact of mining.''
A major finding of the study is that people do not have to live in an obvious mining state or work directly in the mining industry to benefit from mining. In fact, many residents, businesses and governments in states with only small amounts of mining activity receive large economic gains from mining in other states.
According to the study's author, Dr. George F. Leaming, the domestic mining industry generated $48.4 billion directly to the U.S. economy in 1995. This total includes direct payments of $27 billion to American businesses; $14.5 billion in personal income for Americans, including wages and salaries for the industry's 320,400 employees; $3.5 billion in taxes and other revenues to the federal government; and $3.3 billion in taxes to state and local governments.
As the industry's direct economic contributions circulate through the economy, the financial impacts of mining are magnified. According to the study, mining's direct and indirect impact on the U.S. economy in 1995 totaled $523.6 billion. This amount includes $295.7 billion in income for businesses that support mining; $143.7 billion in personal income for the 5 million jobs supported indirectly by mining; $56.9 billion in taxes and other revenue for the federal government; and $27.1 billion in state and local government taxes and revenues.
Among the 50 states, California received the greatest economic benefit from the mining industry, according to the study. California ranked first in combined direct and indirect economic benefit from the mining of solid minerals, even though it ranked only fifth in the value of mineral production.
The California economy gained more than $52 billion and 469,000 jobs in 1995 as a result of the combined direct and indirect impacts of mining throughout the United States, the study showed.
``California's gain came not only as a result of the state's role as a minerals producer, but also because of its role as a manufacturing, trade, service and financial center for much of the western United States,'' Leaming said.
New York received the second greatest gain with a total boost to its economy of more than $31 billion and more than 227,000 jobs. Texas was not far behind with a gain of almost $29 billion and more than 308,000 jobs as a direct and indirect result of mining in the United States.
Among the top 20 states that gained the most personal, business and government income directly and indirectly from mining, 12 (California, New York, Pennsylvania, Michigan, Ohio, Illinois, Indiana, New Jersey, Massachusetts, North Carolina, Virginia, and Georgia) received more business income from mining in other states, although they had significant mining industries of their own.
Among the top 20 states, only two (California and Arizona) are in the public lands areas of the West, traditionally thought of as being the center of American mining. Six states (Ohio, Illinois, Indiana, Michigan, Minnesota and Missouri) are in the Midwest, while eight (Kentucky, West Virginia, Texas, Florida, North Carolina, Georgia, Virginia and Alabama) are in the South. Another four (New York, Pennsylvania, New Jersey and Massachusetts) are in the Northeast.
The study also showed that the total benefit to the nation's economy was nearly nine times the $60 billion value of solid minerals mined in the United States in 1995.
Moreover, the total number of American jobs created both directly and indirectly by the domestic mining industry was more than 15 times the number of workers directly involved in mining. The total personal income generated from mining was enough to pay the wages of nearly 5 million American workers, only 6 percent of whom were actually employed in mining.
``If mining were to cease within the United States, those nearly 5 million people and their families would lose that income, but the nation would still require minerals for making automobiles and other consumer products, for housing and highways, for farming, for electricity generation and countless other uses,'' Leaming said.
``To maintain the standard of living of its people and its place in the global economy, the nation will continue to need minerals,'' Leaming said. ``Without mining, the ability of the U.S. economy to meet the needs of its people and maintain its global position would be reduced severely. And so would the abilities of 5 million Americans to meet their needs and those of their families.''
To:mikesloan who wrote (534)
From: Alex Tuesday, Jul 15, 1997 9:22 AM
Respond to of 82910
http://www.abn-online.com/abn/headlines/index.html
To:Alex who wrote (535)
From: Alex Tuesday, Jul 15, 1997 9:31 AM
Respond to of 82910
Defense report calls for controversial emergency laws
By TOSHIO JO
Asahi Evening News
The government should take legislative action to enact a set of emergency laws to prepare the nation for any international situation that might have a grave impact on Japan's security, an annual government report said today.
Not only research, but actual enactment of such laws is called for, although such a move would require a highly political decision on the part of the government, the white paper on defense said.
The report was approved by the Cabinet today.
The report drew attention to the need to pass emergency laws--a touchy subject because they could involve measures to restrict constitutionally guaranteed rights for individuals to protect the lives and assets of the people.
The annual report said it is necessary to enact such laws at a time when the issue has become one of the key elements in the ongoing drafting of new guidelines on Japan-U.S. defense cooperation.
The issue remains a politically delicate matter, however. The Social Democratic Party, one of the three ruling coalition parties, remains extremely sensitive to such a move on the grounds that it could be constitutionally questionable.
The defense report emphasizes the importance of the Japan-U.S. Security Treaty in the post-Cold War Asia-Pacific region.
"In the Asia-Pacific region where a stable security environment has yet to be achieved, bilateral alliances led by the United States and the U.S. military presence play a crucial role in peace and stability in this region," the report said.
In this context, the report said that the Japan-U.S. Security Treaty is indispensable for the ensuring of peace and stability in Japan and its surrounding region. The report fails to define the scope of the "surrounding area," however.
In reference to the ongoing drafting of new guidelines on Japan-U.S. defense cooperation, the report says that it is increasingly important to step up joint defense efforts based on the guidelines in order for Japan to cope with instability and uncertainty in the region.
The report did not name any particular country, but it is generally believed that a crisis on the Korean Peninsula and a possible conflict between China and Taiwan are on the minds of defense planners.
On the Democratic People's Republic of Korea (North Korea), the report reiterated that the country remains a "major element of instability" for East Asia, including Japan.
"North Korea is believed to be engaged in research and development to make the range of its ballistic missiles longer, which is raising military tensions on the Korean Peninsula," the report noted.
On China, the report said that it is necessary to closely monitor the modernization of its nuclear, naval and air force capabilities, the anticipated expansion of the scope of its military activities at sea, and the situation of the Taiwan Strait.
In reference to Russia, the report reiterated that the Russian military force in the Far East needs to be monitored closely because its future remains uncertain just as Russia's domestic political situation is uncertain and fluid.
http://www.siliconinvestor.com/stocktalk/msg.gsp?msgid=1763421
To:mikesloan who wrote (533)
From: mikesloan Tuesday, Jul 15, 1997 9:11 AM
Respond to of 82910
Asia currencies not in crisis--MOF's Sakakibara
TOKYO, July 15 (Reuter) - Asian currencies are not in a crisis situation and Japan will cooperate
where it can while watching Asian currency moves, Eisuke Sakakibara, the Ministry of Finance's
newly appointed vice minister for international affairs, told a news conference on Tuesday.
Sakakibara also reiterated the ministry's stance that Japan's surplus in the trade of goods and
services will not increase significantly, looking at the current fiscal year as a whole.
He added that a slight rise in the surplus was possible, but said even such increases would not lead
to trade friction.
``We have been saying that there won't be a significant increase in the surplus. We do not believe
the surplus will become an issue and lead to trade friction,'' Sakakibara said.
Sakakibara said that he will not comment on currency levels but that it was part of the
government's job to relay its outlook on the economy and current account balances.
``When the market is in a frenzy for no legitimate reason, one of our important tasks is to
communicate correct information to the market,'' he said.
Sakakibara said that Japan will make efforts to reach an agreement on the World Trade
Organisation's financial services talks by the end of this year.
He added that Japan will continue pursuing liberalisation of the financial services sector.
Asked about the Thai baht crisis and the economic outlook in Asia, Sakakibara said, ``I don't think
it's a crisis. Thailand is taking appropriate steps.''
He explained that Thailand addressed issues concerning the financial sector, raised interest rates
and tightened state finances before floating the baht, which was ``an extremely appropriate''
measure.
``Thailand, as well as the Philippines, is not in a critical situation,'' he said.
He added that the Philippines is nearing an agreement with the International Monetary Fund (IMF)
on loans and that it has made its currency rate flexible, which is a positive step.
``We will keep watch over Asia's situation and cooperate where we can,'' he said.
Asked whether Tokyo had any plans to formulate a rescue package for Thailand, Sakakibara said:
``It all depends on what kind of request the Thai side makes. Without that (request), I cannot
comment on what the Japanese side can do.''
Thailand's finance and foreign ministers are scheduled to visit Japan later this week for talks
regarding the Southeast Asian nation's recent currency woes.
Sakakibara said that the situation in Thailand today was different from that faced by Mexico during
a currency crisis more than two years ago.
``It is not appropriate to think of Asia now as analogous to Mexico,'' he said.
To:Bear who wrote (530)
From: Alex Tuesday, Jul 15, 1997 3:34 AM
Respond to of 82910
http://www.asiatimes.com/97/07/15/15079704.html
To:Alex who wrote (531)
From: Alex Tuesday, Jul 15, 1997 3:43 AM
Respond to of 82910
http://www.asia-inc.com/archive/1997/9706fplw.html
To:Alex who wrote (532)
From: mikesloan Tuesday, Jul 15, 1997 9:04 AM
Respond to of 82910
Japan has no interest in acquiring gold.
Tuesday July 15 7:08 AM EDT
Sakakibara says has no interest in gold holdings
TOKYO, July 15 (Reuter) - Eisuke Sakakibara, the Japanese Finance Ministry's newly appointed
vice minister for international affairs, said on Tuesday he has no interest in gold after its position in
the international monetary system changed drastically over the past 10 to 20 years.
Asked if Japan has any plan to increase or decrese its gold holdings, which are currently much
lower than those of many other industrialised nations, Sakakibara said: ``Gold's lustre has declined
and I have no interest in gold now.''
http://www.siliconinvestor.com/stocktalk/msg.gsp?msgid=1763235
To:mikesloan who wrote (529)
From: Bear Tuesday, Jul 15, 1997 2:19 AM
Respond to of 82910
The Northern Miner Vol. 83 No. 20 July 14, 1997
Gold reaches 12-year low -- Central bank sales depress price to US$314
BY JAMES WHYTE
Maybe it's a good thing Busang wasn't real.
Recent days have seen the gold price fall to levels not seen since 1985, as sellers crowd the market
and buyers bide their time.
The usual suspects in the assault on gold are the Western central banks, which have been consistent
sellers over the past decade. The current price collapse has been traced to a July 3 announcement
by the Reserve Bank of Australia that it had sold 167 tonnes (about 5.4 million oz.) into the spot
market over the past six months.
The immediate response was panic. Fearing that the sale could forshadow further sales from the
central banks, producers locked in sales on the futures markets, forcing sellers of physical metal to
cut prices on the spot market. The July 4 morning fix on the London bullion market was US$325.20
per oz., a decline of US$7.35 from the previous afternoon fix. Traders passed a nervous weekend,
then grabbed the phones once more at the opening on July 7, sending the yellow metal down to
US$318.75. The spot price touched US$313.95 in New York trading on July 8, its lowest price
since July 11, 1985.
The London fix on the morning of July 9 was US$315.75, its lowest figure since July 12, 1985; by
the afternoon fix, there had been a slight rally to US$317.30. The closing bid price on New York
was US$317.70, and, at presstime, pre-Market bids in the Far East were US$318.70.
A trader at one of the Big Five London bullion merchants told The Northern Miner that potential
buyers were probably still on the sidelines, waiting for the price to touch bottom. "Asia is the main
market for physical offtake, but these guys are not going to buy at just any old level. If they think it's
going to come down further, they're going to wait and then step back in."
Neither did he think it likely that the commodity funds might change from bears to bulls: "From the
funds' point of view, they're making money on a daily basis in the contango market, so if they're
short the metal, it pays them to be short still."
A Hong Kong-based bullion trader with another Big Five merchant said there had been little
increase in physical demand for gold, and that most of the sales in recent days had been absorbed
by short sellers taking profits and covering existing short positions. A third trader, now retired,
pointed out that the jewelry industry (which, along with electronics, is the principal end-user of gold)
normally is not a heavy buyer until August, and that it had long been understood that slow industrial
offtake made July the best time of year to short gold.
Their views seem to be borne out by the pattern of trading over recent days, with rallies in the
London spot market as short sellers took profits, followed by declines during the New York trading
period as futures traders depressed the price.
There remains a strong sentiment that 1997 could see large-scale unloading of gold by European
central banks. Low book valuations of central bank gold reserves give governments an incentive to
sell at market prices and so show a profit for the treasury; with European monetary union targets for
deficit reduction looming, the German, Belgian and Dutch central banks have all sold bullion over the
past year, and the Swiss, though unaffected by the monetary union, are also rumored to be selling.
Worldwide public-sector sales last year were 239 tonnes (7.7 million oz.) -- about a tenth of total
mine production.
Royal Oak affected
The effect the low price might have on high-Cost gold producers is plain enough; 21 of the Western
World's major producers have cash costs higher than the present spot price. Of these, 18 are South
African, including such names as East Rand, Vaal Reefs, and Free State; rounding out the list are
two Australian miners, Newcrest Mining and Kidston Gold, and Royal Oak Mines (RYO-T).
Graham Eacott of Royal Oak acknowledged that the price will likely put the Colomac mine in the
Northwest Territories out of business. Royal Oak, which had already announced it would take a
US$30-Million writedown of the asset on its next quarterly report, is expecting cash costs of
US$376 per oz. at Colomac this year, and, with declining reserves and grades, Royal Oak thinks
the mine is near the end of its life.
Colomac faces another problem in that it has road access only three months of the year. "To take in
supplies for 1998, from January through March of this year, there has to be incentive . . . reserves
that are economic, plus cash costs that are low enough to make it worthwhile, and neither of those
two criteria would be met."
Uncertainty at Colomac
Exploration drilling below the pit floor still offers some potential for building a new reserve.
Expanding the pit to include new reserves might allow for continued operation, but exploration has
not advanced far enough to justify development.
Royal Oak had already announced that its Hope Brook mine in southwestern Newfoundland would
close at the end of September, but, said Eacott, "we're now looking at the end of July, because the
reserves are running out." He said Royal Oak's other operations notably the Giant mine in
Yellowknife, N.W.T. and the Pamour division in Timmins, Ont. -- are protected by forward sales at
US$395 per oz. "We are protected this year, but exposed thereafter."
Several Quebec operations might be threatened, including the Silidor mine near Rouyn, Que., owned
jointly by Battle Mountain Canada (BMC-T) and Cambior (CBJ-T). Silidor posted a cash cost of
US$333 per oz. in 1996, and, in any event, dwindling reserves are expected to result in closure at
the end of 1997. TVX Gold (TVX-T) has already announced that the Casa Berardi mine, west of
Joutel, Que., will shut down unless it can find a buyer.
It is not yet clear how the gold market might affect McWatters Mining (MCW.A-M) in its
agreement to buy from Placer Dome (PDG-T) the Kiena and Sigma mines, both of which are in Val
d'Or, Que. Costs at Sigma have risen steadily, touching US$436 per oz. in 1996, while Kiena's cash
cost was much lower, at US$247 per oz.; both operations have shown lower costs this year.
McWatters must arrange a US$70-Million financing to take over the two projects and the gold price
slump is not helping with that effort.
In Ontario, the Macassa mine, near Kirkland Lake, has traditionally been a low-Cost producer, but
a rock burst in April may have rendered some reserves unrecoverable. Owner Kinross Gold (K-T)
suspended operations in early June to address safety concerns raised by the Ontario Ministry of
Labour, and the comapny has not yet disclosed its plans for the mine. If safe mining will increase
cash costs significantly and if reserves in lost stopes cannot be recovered, Macassa may close.
Another Ontario producer which has seen better days is Goldcorp (G-T), whose Red Lake mine is
still shut down by a strike. The cash cost in 1996 was US$309 per oz., but Goldcorp expected to
decrease that substantially by developing new higher-grade reserves on the down-plunge extension
of Placer Dome's adjoining Campbell orebody.
Bear
To:mikesloan who wrote (528)
From: mikesloan Tuesday, Jul 15, 1997 1:37 AM
Respond to of 82910
Additional signs of the new world order?
Don't mention the euro as Germany
prepares for E-Day to dawn in City
The Times July 15/97
For bankers, an affirmative answer to the question Sprechen
Sie Deutsch could become vital to their careers. Speaking
German may soon be essential for working in the City.
For years, the growing number of Germans in the City have
been subjected to the time-honoured taunt of "don't mention
ze war". Their employers had either bought old British houses
such as Kleinwort Benson or established new head offices in
London. During induction weeks, the German bankers were
told to humour the Brits and their hang-ups. The jibes were
met with well-practised smiles and the peace was kept in City
wine bars.
But the balance of power seems to be dipping the other way.
The war that currently dominates wine bar talk is the war
between Frankfurt and London as financial centres. And this
time, the Germans could be on the winning side.
Frankfurt has ambitions to match London's position as the
best place in Europe to take large amounts of money. Of
course, this is not the first time they have said this. So far, the
usual response from the British has been a belly laugh. No
more. Now, it is British bankers who smile politely with a hint
of embarrassment and try to recall a few German O-level
phrases. What has happened?
Frankfurt has assembled an impressive set of levers to propel
itself towards pole position. And it has recruited the Paris
exchanges as partners. For the first time in its history, the City
is facing a serious threat.
Germany began its assault on London's market position with
a total reform of the way the equity and futures markets
operate. In 1994, insider dealing was made illegal to counter
accusations that the German markets could not be trusted
because of the lack of effective supervisory control.
Reserve requirements imposed on all banks by the
Bundesbank were also gradually lifted to improve Frankfurt's
attractiveness. And German companies were encouraged to
break with tradition and seek listings rather than be owned
privately by large institutions.
The Frankfurt stock index, the Dax, has doubled in little more
than two years, closing at an all-time high yesterday. Last
year's flotation of Deutsche Telekom was Europe's biggest.
But getting the local trading environment right was never
going to be enough to challenge London's position.
Frankfurt's trump card is the single European currency, which
is only about 350 working days away.
It is on the euro that Germany is pinning its hopes. What
impact the single currency - and Britain's absence from it -
could have on the flows of money is particularly obvious to
businessmen operating and banking on both sides of the
Channel. Bernd Pischetsrieder, the chief executive of BMW,
which owns Rover, recently said: "If Britain should stay out
for a long time at the beginning [of Emu] the financial capital
of Europe will be Frankfurt, not London."
European companies such as BMW or Unilever would be
likely to see Frankfurt as the best place to see their shares
listed after a re-denomination of the shares into euros. Not
only would the need for currency conversions be greatly
reduced but Frankfurt would also be the home of the
European Central Bank, which will set euro interest rates.
Furthermore, if Britain stayed out of Emu, British-based
banks run the risk of not being admitted fully to Target, the
new pan-European payments system. The Bundesbank and
the Bank of England have for months been locked in talks
over the system.
Under the thin disguise of academic debate between central
bankers, the two institutions have been battling for their
respective interests. Frankfurt is trying to keep non-Emu
members out of Target by arguing that it needs to retain the
fullest possible control. London has taken up the familiar
theme of a multiple-speed Europe in which an independent
British financial centre would have priority links with the
Continent.
The ferosity with which the Target debate is being pursued in
Frankfurt has surprised the Bank. The Bundesbank is a
recent convert to Frankfurt's cause. Only now that it is about
to lose power to the European Central Bank, has it shed its
studied indifference.
London's strong point over the last decades had always been
the unrivalled liquidity of its markets. Pension fund money,
Arab money, small savers' money - a vast amount of it was
available in London while continental exchanges suffered at
times from a lack of buyers and sellers.
Frankfurt has had to acknowledge that it is unlikely to match
London's liquidity overnight. At least on its own. The heads
of the bourse and the futures market came up with a plan to
combine their operations with the next biggest financial centre
in Europe - Paris.
The French connection has now reached an advanced stage.
The two stock exchanges say they will start trading on single
joint computer screen from the middle of next year.
The futures exchanges are aiming to do the same but at the
momemt Paris still operates an open-outcry system.
However, J”rg Franke, a board member of the Terminb”rse
in Frankfurt, said that a link-up was likely after an expected
move to screen-trading in Paris.
Only last week, Liffe, the London futures exchange,
reaffirmed its commitment to open-outcry trading as the most
efficient system, guaranteeing the highest degree of liquidity.
Herr Franke retorted that screen-trading reduced market
participants' cost by half.
The argument over trading systems is really a metaphor for
the different cultures of banking on respective sides of the
Channel. London is staking its future on the traditional
techniques that generated fortunes over decades, while
Frankfurt is copying the more technically advanced methods
of the highly successful American banks, which are now just
as dominant in Frankfurt as they are in London.
In Frankfurt, the British low-tech option is considered as
redundant as the House of Lords. German bankers see
themselves winning in the race with London because they pay
more attention to new methods that can boost profits.
Ulrich Schr”der, a policy analyst at Deutsche Bank, said:
"Due to a new consciousness, Continental centres such as
Paris and Frankfurt will improve their performance and close
the gap to London."
The official City's reaction to Frankfurt's ambition has been
marked by complacency. When The Times first contacted
the London Stock Exchange regarding the alliance between
Frankfurt and London, the exchange knew nothing about it.
Gavin Casey, the LSE chief executive, remarked that the
Continental exchanges have tried to co-operate before and
failed. He delighted in recalling that 35 per cent of top
European companies are listed in London. But even Mr
Casey had to admit that Emu is a threat.
The City's favourite statistic with regards to Frankfurt is a
survey of the number of banks situated by the River Main.
Some 7 per cent of Frankfurt's banks left the city last year.
But the Frankfurt Chamber of Commerce said the closures
were mainly by less prominent banks that had not been doing
business in the city.
The large investment banks are all increasing staff levels in
Germany at the moment. For British bankers, this is no time
to discard old German textbooks and O-level notes. The
arrival in massed ranks is expected in Frankfurt on E-Day,
the day the euro becomes legal tender, most likely to be
January 1, 1999.
Until such times, their German colleagues will tell each other
in the wine bars of the City: "Don't mention the euro."
http://www.siliconinvestor.com/stocktalk/msg.gsp?msgid=1762455
To:mikesloan who wrote (528)
From: mikesloan Tuesday, Jul 15, 1997 1:37 AM
Respond to of 80092
Additional signs of the new world order?
Don't mention the euro as Germany
prepares for E-Day to dawn in City
The Times July 15/97
For bankers, an affirmative answer to the question Sprechen
Sie Deutsch could become vital to their careers. Speaking
German may soon be essential for working in the City.
For years, the growing number of Germans in the City have
been subjected to the time-honoured taunt of "don't mention
ze war". Their employers had either bought old British houses
such as Kleinwort Benson or established new head offices in
London. During induction weeks, the German bankers were
told to humour the Brits and their hang-ups. The jibes were
met with well-practised smiles and the peace was kept in City
wine bars.
But the balance of power seems to be dipping the other way.
The war that currently dominates wine bar talk is the war
between Frankfurt and London as financial centres. And this
time, the Germans could be on the winning side.
Frankfurt has ambitions to match London's position as the
best place in Europe to take large amounts of money. Of
course, this is not the first time they have said this. So far, the
usual response from the British has been a belly laugh. No
more. Now, it is British bankers who smile politely with a hint
of embarrassment and try to recall a few German O-level
phrases. What has happened?
Frankfurt has assembled an impressive set of levers to propel
itself towards pole position. And it has recruited the Paris
exchanges as partners. For the first time in its history, the City
is facing a serious threat.
Germany began its assault on London's market position with
a total reform of the way the equity and futures markets
operate. In 1994, insider dealing was made illegal to counter
accusations that the German markets could not be trusted
because of the lack of effective supervisory control.
Reserve requirements imposed on all banks by the
Bundesbank were also gradually lifted to improve Frankfurt's
attractiveness. And German companies were encouraged to
break with tradition and seek listings rather than be owned
privately by large institutions.
The Frankfurt stock index, the Dax, has doubled in little more
than two years, closing at an all-time high yesterday. Last
year's flotation of Deutsche Telekom was Europe's biggest.
But getting the local trading environment right was never
going to be enough to challenge London's position.
Frankfurt's trump card is the single European currency, which
is only about 350 working days away.
It is on the euro that Germany is pinning its hopes. What
impact the single currency - and Britain's absence from it -
could have on the flows of money is particularly obvious to
businessmen operating and banking on both sides of the
Channel. Bernd Pischetsrieder, the chief executive of BMW,
which owns Rover, recently said: "If Britain should stay out
for a long time at the beginning [of Emu] the financial capital
of Europe will be Frankfurt, not London."
European companies such as BMW or Unilever would be
likely to see Frankfurt as the best place to see their shares
listed after a re-denomination of the shares into euros. Not
only would the need for currency conversions be greatly
reduced but Frankfurt would also be the home of the
European Central Bank, which will set euro interest rates.
Furthermore, if Britain stayed out of Emu, British-based
banks run the risk of not being admitted fully to Target, the
new pan-European payments system. The Bundesbank and
the Bank of England have for months been locked in talks
over the system.
Under the thin disguise of academic debate between central
bankers, the two institutions have been battling for their
respective interests. Frankfurt is trying to keep non-Emu
members out of Target by arguing that it needs to retain the
fullest possible control. London has taken up the familiar
theme of a multiple-speed Europe in which an independent
British financial centre would have priority links with the
Continent.
The ferosity with which the Target debate is being pursued in
Frankfurt has surprised the Bank. The Bundesbank is a
recent convert to Frankfurt's cause. Only now that it is about
to lose power to the European Central Bank, has it shed its
studied indifference.
London's strong point over the last decades had always been
the unrivalled liquidity of its markets. Pension fund money,
Arab money, small savers' money - a vast amount of it was
available in London while continental exchanges suffered at
times from a lack of buyers and sellers.
Frankfurt has had to acknowledge that it is unlikely to match
London's liquidity overnight. At least on its own. The heads
of the bourse and the futures market came up with a plan to
combine their operations with the next biggest financial centre
in Europe - Paris.
The French connection has now reached an advanced stage.
The two stock exchanges say they will start trading on single
joint computer screen from the middle of next year.
The futures exchanges are aiming to do the same but at the
momemt Paris still operates an open-outcry system.
However, J”rg Franke, a board member of the Terminb”rse
in Frankfurt, said that a link-up was likely after an expected
move to screen-trading in Paris.
Only last week, Liffe, the London futures exchange,
reaffirmed its commitment to open-outcry trading as the most
efficient system, guaranteeing the highest degree of liquidity.
Herr Franke retorted that screen-trading reduced market
participants' cost by half.
The argument over trading systems is really a metaphor for
the different cultures of banking on respective sides of the
Channel. London is staking its future on the traditional
techniques that generated fortunes over decades, while
Frankfurt is copying the more technically advanced methods
of the highly successful American banks, which are now just
as dominant in Frankfurt as they are in London.
In Frankfurt, the British low-tech option is considered as
redundant as the House of Lords. German bankers see
themselves winning in the race with London because they pay
more attention to new methods that can boost profits.
Ulrich Schr”der, a policy analyst at Deutsche Bank, said:
"Due to a new consciousness, Continental centres such as
Paris and Frankfurt will improve their performance and close
the gap to London."
The official City's reaction to Frankfurt's ambition has been
marked by complacency. When The Times first contacted
the London Stock Exchange regarding the alliance between
Frankfurt and London, the exchange knew nothing about it.
Gavin Casey, the LSE chief executive, remarked that the
Continental exchanges have tried to co-operate before and
failed. He delighted in recalling that 35 per cent of top
European companies are listed in London. But even Mr
Casey had to admit that Emu is a threat.
The City's favourite statistic with regards to Frankfurt is a
survey of the number of banks situated by the River Main.
Some 7 per cent of Frankfurt's banks left the city last year.
But the Frankfurt Chamber of Commerce said the closures
were mainly by less prominent banks that had not been doing
business in the city.
The large investment banks are all increasing staff levels in
Germany at the moment. For British bankers, this is no time
to discard old German textbooks and O-level notes. The
arrival in massed ranks is expected in Frankfurt on E-Day,
the day the euro becomes legal tender, most likely to be
January 1, 1999.
Until such times, their German colleagues will tell each other
in the wine bars of the City: "Don't mention the euro."
To:Abner Hosmer who wrote (522)
From: Bear Tuesday, Jul 15, 1997 12:30 AM
Respond to of 80092
I may be missing something--how can South Africa solve the problem of low gold prices by increasing the supply of gold on the market?
Bear
To:Bear who wrote (527)
From: mikesloan Tuesday, Jul 15, 1997 1:13 AM
Respond to of 80092
Eight straight for Nasdaq
Stock Markets
July 15/97
Expectations of strong second-quarter earnings boosted the Nasdaq
composite index to its eighth consecutive record close. The TSE 300
outperformed the Dow in uneventful summer trading
By THE FINANCIAL POST
Computer-related shares rallied as investors bet that falling personal computer prices will cause
sales to surge later this year.
The rally sent the Nasdaq composite index surging 21.26 points, or 1.4%, to a record 1523.88.
The index has risen 24% this year.
The advance came one day before Intel Corp. - the world's largest semiconductor maker -
reports earnings for the three months ended June 30.
Santa Clara, Calif.-based Intel is expected to earn US$1.79 a share, according to the average
estimate of 30 analysts surveyed by IBES International Inc. It reported earnings of US$1.04
billion, (US$1.17 a share) on revenue of US$4.62 billion in the year-earlier quarter.
Intel shares (INTC/NASDAQ) rallied US$1 7/8 to US$78 3/4.
Analysts said recently announced plans by Compaq Computer Corp. and Hewlett-Packard Co.
to cut prices on some commercial personal computers by as much as 25% should drive consumers
and businesses to add new computers or replace existing machines that have less power, analysts
said.
"There's big expectation that sales will take off in the second half," said Brian Kramp, a computer
industry analyst at Meridian Investment Co.
Among the biggest gainers, Compaq (CPQ/NYSE) surged US$4 1/4 to US$128 1/4, Dell
Computer Corp. (DELL/NASDAQ) jumped US$4 7/8 to US$142 7/8 and Microsoft Corp.
(MSFT/NASDAQ) surged US$63 1/816 to US$13515 1/816.
Oracle Corp. (ORCL/Nasdaq) surged US$17 1/816 to US$53 3/4 and Netscape
Communications Corp. (NSCP/NASDAQ) jumped US$5 7/8 to US$44 3/4.
The Dow Jones industrial average lagged the Nasdaq's impressive advance. It rose just 1.16
points to 7922.98. Only two of the Dow's 30 stocks - International Business Machines Corp. and
Hewlett-Packard - are in the computer industry. IBM shares (IBM/NYSE) fell 7 1/816 to US$95
1/4 and Hewlett-Packard (HWP/NYSE) climbed US$3 7/8 to US$651 1/816.
Volume on the New York Stock Exchange was 489.7 million shares, down from 503.9 million
shares traded Friday.
The Standard & Poor's 500 composite index climbed 1.7 points, or 0.2%, to 918.38.
Toronto stocks rose to a third successive record close as industrial-product issues advanced on
anticipation of strong earnings growth in a climate of low interest rates.
The Toronto Stock Exchange 300 composite index rose 13.2 points, or 0.2%, to 6639.6. Volume
fell to 85.1 million shares, from 95 million shares traded Friday.
Interest rates are at their lowest in three decades and are expected to help lift corporate profits.
Northern Telecom Ltd. (NTL/TSE) rose $2 to $139 and Geac Computer Corp. (GAC/TSE)
climbed $7.50 to a new high of $55.
Last week, Geac reported its fiscal fourth-quarter profit more than doubled to 70› a share, up
from 31› in the year-earlier period.
Low interest rates also help banks, which perform best against a background of low rates and
stable prices. Royal Bank of Canada (RY/TSE), rose 40› to $66.40 and Canadian Imperial Bank
of Commerce (CM/TSE) gained 45› to $36.70.
Gold issues surrendered early gains as the price of bullion on the New York Mercantile Exchange
fell US$1.50 to US$320.10 an ounce.
Barrick Gold Corp. (ABX/TSE) tumbled 90› to $29.65 and Placer Dome Inc. (PDG/TSE)
slipped 90› to $20.30.
The TSE gold and precious minerals subindex, which accounts for 6.59% of the benchmark TSE
300, has fallen 31.8% so far this year.
The other major Canadian markets closed mixed. The Montreal Exchange market portfolio gained
7.76 points, or 0.2%, to 3359.2. The Vancouver Stock Exchange composite index lost 3.84
points, or 0.5%, to 808.34.
All but one of the major overseas markets closed higher.
London: British stocks jumped to a record as investors overlooked the strength of the pound,
which can hurt profits of British companies. The FT-SE 100 rose 57.9 points, or 1.2%, to 4857.4.
Frankfurt: German stocks rose, with the Dax index adding 83.22 points, or 2.1%, to 4124.19.
Tokyo: Japanese stocks surged as investors actively sought high-technology issues backed by firm
earnings. The 225-share Nikkei average closed at 20,228.72, up 353.23 points or 1.8%.
Hong Kong: Bank stocks led a broad rally, propelling the Hang Seng index to a record
15,370.94, up 145.65 points or 1%.
Sydney: Australian stocks fell. The all ordinaries index lost 26.1 points, or 1%, to 2673.
To:mikesloan who wrote (524)
From: mikesloan Tuesday, Jul 15, 1997 12:06 AM
Respond to of 80092
POG at New York closed $319.90 down $1.30 presently $319.25 down $0.65
To:mikesloan who wrote (525)
From: John Barendrecht Tuesday, Jul 15, 1997 12:24 AM
Respond to of 80092
Soft Australian stocks head down again at open
SYDNEY, July 15 (Reuter) - The Australian share market headed for the downside again on Tuesday as Monday's weaker sentiment spilled over with little in offshore finishes to counteract the downbeat tone.
By 10.10 a.m. (0010 GMT) the All Ordinaries index was down 21.2 points at 2,651.8, while September share price index futures contracts were down 12 points at 2,661, a 9.2 point premium to the underlying index.
``There is no (buying) interest. Those that are there are looking to lock in profits,'' said a Sydney broker, pointing to continued thinness on the market's buy side.
POSSIBLE LOST DATA Solid trade in the September SPI contract, with 4,506 contracts through by 10.40 a.m. (0040 GMT), again appeared to give the initial impetus, with traders resigned to another soft showing with few reasons to take a bullish stance.
``Gold was a touch softer and the rest were noting to write home about,'' the broker said.
Indeed, gold majors were again on the slide with sector heavyweight Normandy Mining (NDY.AX) two percent lower at A$1.49 while Acacia Resources (AAA.AX) lost five percent to A$1.29 and Newcrest (NCM.AX) shed 2.4 percent to A$2.45.
While golds had slightly the worst of it, the weakness was widespread, with nearly all sectors losing ground as investors lightened positions.
Falls outnumbered rises by a ratio of about seven to three, while about 42 percent of stocks traded remained steady.
In other local markets, Australian bond yields rose following an easier tone in U.S. Treasuries, but with few other events to inspire interest, turnover is again expected to be light. By 10.55 a.m. (0055 GMT), 10 year T-bonds were yielding 6.72 percent, compared to Monday's 6.67 percent.
The Australian dollar's downtrend proceeded by the book as all attempts to bounce faltered well short of US$0.7410 resistance leaving U.S. investment bank sellers to break support and reach fresh cycle lows. By 11.00 a.m. (0100 GMT), the local currency was hovering at US$0.7354/59 having slipped from US$0.7375/80 here Monday and US$0.7445/50 late last week. -------------------------(TECHNICALS)---------------------------
Short-term range Support Restnce RSI-14 MA-10 MA-20
AORD 2620/2670 2630 2660 42.67 2702 2703
SPI 2620/2670 2640 2690 40.43 2724 2727
http://www.siliconinvestor.com/stocktalk/msg.gsp?msgid=1762130
To:Abner Hosmer who wrote (522)
From: Abner Hosmer Monday, Jul 14, 1997 9:51 PM
Respond to of 80092
What's behind the "perfect" economy:
http://talk.techstocks.com/~wsapi/investor/s-14043/reply-2524
To:Abner Hosmer who wrote (523)
From: mikesloan Tuesday, Jul 15, 1997 12:01 AM
Respond to of 80092
Excellent post thomas tks.
Japan: Corporate bankruptcies reach an 11-year record
Financial Times
TUESDAY JULY 15 1997
By Gwen Robinson in Tokyo
Japanese corporate insolvencies rose in the first half of this year to their
highest level in 11 years. The bankruptcies increased 10.4 per cent to
7,857, with liabilities surging more than 106 per cent to a record 6,330bn
($55.6bn), according to Teikoku Databank, a private research agency.
The previous record for any six-month period was 3,950bn, in the first
half of 1995.
The increase in liabilities reflects the extent of financial problems still
haunting companies with outstanding debts from the "bubble economy" era
of the late 1980s.
The surge in liabilities was due primarily to the simultaneous failures of
three private financial institutions affiliated with Nippon Credit Bank, which
is now undergoing restructuring. The three NCB affiliates, Crown Leasing,
Nippon Assurance Finance Service and Nippon Total Finance, filed for
bankruptcy in April with debts exceeding 2,180bn.
Without these three failures, the continuing high number of corporate
bankruptcies illustrates how Japan's economic downturn in the past four
years has compounded the bad-debt problems among companies across
many sectors.
Nearly 65 per cent of all bankruptcies in the six-month period were
blamed on poor economic conditions, according to Teikoku Databank.
Failures in the building sector surged; those among wholesalers showed
marked increases.
Among specific reasons, "poor sales" were cited in 4,119 cases, up from
3,708 last year; "lax management" was blamed for 1,337 failures, up from
1,318.
Bad debts caused 300 corporate failures, up from 173 the year before, the
agency said.
In June alone, corporate bankruptcies rose nearly 20 per cent
year-on-year to 1,349, though total liabilities for the month fell nearly 40
per cent to 403.88bn.
The drop in liabilities led some analysts to predict the scale of bankruptcies
might be declining, as more large companies resolve their bad-debt
problems and complete restructuring programmes.
The unexpected collapse on July 4 of Tokai Kogyo, a medium-sized
general contractor, with 510bn in debt has reawakened fears that further
big bankruptcies are yet to surface.
On the Tokyo stock market, construction-related issues and those of
debt-laden companies have fallen sharply in response to the news. Tokai
Kogyo ranked as the eighth biggest collapse since the end of the second
world war. Its failure will boost total liabilities from bankruptcies in the
second half of this year.
http://www.siliconinvestor.com/stocktalk/msg.gsp?msgid=1762020
To:John Barendrecht who wrote (521)
From: Abner Hosmer Monday, Jul 14, 1997 9:12 PM
Respond to of 80092
By Melanie Cheary JOHANNESBURG, July 14 (Reuter) - South Africa's gold mining industry and the National Union of Mineworkers on Monday unveiled a productivity-linked wage deal which could save thousands of jobs threatened by a meltdown in the gold price.
The framework deal is the first of its kind, offering miners substantial wage increases in exchange for a quantum leap in productivity designed to lift national gold output by nearly 20 percent.
The deal offers a two-year package of annual wage increases of between nine and 25 percent, providing agreement is reached at individual mine and company level to increase 1997 gold production by 90 tonnes from the 495 tonnes produced last year.
"An accord of this nature is likely to protect employment rather than jeopardise it. But we can't give employment guarantees," said Adrian Du Plessis, industrial relations adviser to the Chamber of Mines employer body.
The South African gold industry has long called for improvements in productivity to offset rising costs at its deep, labour-intensive mines which have hampered its ability to compete with cheaper open-cast operations elsewhere in the world.
"(The weak gold price) has added a great urgency and imperative to reaching a robust wage and productivity agreement.
This is an accord which links wages, production and productivity," said Chamber president Nick Segal.
Segal said employers believed there was great scope to increase productivity in the industry.
Thousands of miners, in an already pressed industry with declining production, are threatened with job cuts after the recent slide in the bullion price to 12-year lows.
Gold mine jobs have already been cut back from around 530,000 in 1987 to around 350,000 in 1996.
"This accord allows us to save jobs and lay a foundation for substantial growth in the industry. (This accord) lays down the first lesson for us in how to deal with major setbacks in the industry without panicking, without alarm at possible job losses," said the NUM's general secretary Kgalema Motlanthe.
The deal is subject to negotiation and approval at mine and company level between management and union representatives. The aim is to commence these mine level talks immediately and the Chamber said agreement could be reached within weeks.
A two-year agreement will hopefully eliminate the annual wage struggle that has long been a feature of the industry and has often led to disputes and strikes, the Chamber added.
"The settlement seeks to take the wage conflict out of the mining industry and lays a platform for a better partnership (between workers and management)," Du Plessis said.
The proposed 90-tonne output increase was calculated by accumulating individual producers' target output increases.
"Agreement on this production will trigger the implementation of the wage increases. These are significant wage increases tied to substantial productivity improvement and reflects the joint commitment of both parties," Du Plessis said.
The Chamber said it was negotiating the same deal with other smaller unions and these talks were at an advanced stage.
The wage increases will be backdated to July 1.
10:18 07-14-97
http://www.siliconinvestor.com/stocktalk/msg.gsp?msgid=1760938
To:mikesloan who wrote (514)
From: John Barendrecht Monday, Jul 14, 1997 8:44 PM
Respond to of 80092
London daily gold turnover just down in June-LBMA
LONDON, July 14 (Reuter) - The average daily turnover of gold cleared through London fell slightly in June to 32.2 million ounces per day from 32.4 million in May, according to figures issued by the London Bullion Market Association on Monday.
In value terms the daily average was also lower at $11.0 billion, from $11.1 billion in May. It was the lowest average daily value since December last year.
The average daily silver volume cleared in June rose sharply to 270.5 million ounces from 236.6 million in May, while the average daily value cleared rose to $1.3 billion from $1.1 billion in May.
The average number of transfers in June for gold was 1,105 compared with 1,154 in May. There were 513 silver transfers on average up from 455 in May.
The average afternoon gold fixing price in June was $340.76 per ounce, down from May's $343.84, and silver's average fixing was $4.755 versus $4.759 in May.
To:Alex who wrote (516)
From: John Barendrecht Monday, Jul 14, 1997 8:42 PM
Respond to of 80092
Demand for gold picks up in India, dull in Pakistan
BOMBAY, July 14 (Reuter) - Demand for gold is expected to pick up in India but may remain subdued in Pakistan in the next few days despite dropping to 12-year low prices, dealers said on Monday.
``Urban demand has started picking up in India because of low prices,'' said V.M Kapoor, president of Gold Jewellery Exporters' Association, based in Bombay, India's main bullion market.
Kapoor said gold imports had risen in the last few days following the fall in world prices.
The premium on special import licences (SILs) needed for importing gold rose to 12.0 percent from 9.0 percent in the last few days, he said.
``The amount of gold imported is not much and the gap between supply and demand has narrowed down,'' Kapoor said.
Standard gold (24 carats) rose 105 rupees to 4,455 rupees per 10 grammes on the local bullion market. Last week gold lost 200 rupees to 4,350 rupees per 10 grammes.
A plunge in world gold prices to below $325 per ounce on Friday, their lowest in 12 years, had earlier triggered selling among traders both in India and Pakistan, dealers said.
In Dubai, the re-export market that pumps gold into the Indian sub-continent, retail trade in bullion was upbeat following the drop in world prices, dealers said.
But they said re-export sales to the key market of India did not show any signs of revival because of the monsoon season and agriculture operations in the country.
Dealers in Bombay said a recovery in world prices also helped domestic rates firm after they touched their lowest in four years.
``Fresh physical buying at lower levels and rising premia on import licences helped local prices bounce back,'' said Bhayabhai Sanghavi, a leading bullion dealer.
``Renewed investment buying further helped the rally,'' Sanghavi added.
Sanghavi said some stock market players booked profits in booming shares and diverted their excess funds into gold.
Dealers in Pakistan's main commercial city of Karachi said they would expect prices to dip further on low demand for gold from jewellers.
``Demand for gold jewellery has gone down in the domestic market,'' one dealer said.
Dealers in Dubai said they would expect demand for gold in India to remain subdued in July and revive in August with the start of a Hindu festival season.
``Demand from India is limited because of the monsoon season,'' said one Indian trader based in Dubai. Gold demand in India usually rises at the end of the monsoon as farmers sell their harvest.
``I do not see much room for the market to go lower...It has bottomed out and a modest reversal is on the cards,'' said one trader.
GOLD PRICES 24 CARATS PER 10 GRAMMES in U.S. DOLLARS
July 14/13/12* July 7/6/5*
BOMBAY 124.68 121.57
KARACHI 107.10 108.43
DUBAI 103.86 104.98
(Conversion $1=35.73 Indian rupees, 40.62 Pakistani rupees
and 3.67 UAE Dirhams) *Bombay prices July 14/7, Karachi July
12/5 and Dubai July 13/6.
http://www.siliconinvestor.com/stocktalk/msg.gsp?msgid=1760703
To:mikesloan who wrote (514)
From: Alex Monday, Jul 14, 1997 8:08 PM
Respond to of 80092
http://www.korealink.co.kr/koreabiz/kb_1/kbe43.htm
To:Alex who wrote (515)
From: Alex Monday, Jul 14, 1997 8:16 PM
Respond to of 80092
http://www.portalinc.com/manilatimes/news2.html
To:Alex who wrote (516)
From: John Barendrecht Monday, Jul 14, 1997 8:31 PM
Respond to of 80092
Chirac warns on EMU failure, France must be ready
http://biz.yahoo.com/finance/97/07/14/z0009_47.html
To:Alex who wrote (515)
From: John Barendrecht Monday, Jul 14, 1997 8:33 PM
Respond to of 80092
Istanbul gold trade sinks as prices firm
http://biz.yahoo.com/finance/97/07/14/z0009_32.html
To:Alex who wrote (516)
From: John Barendrecht Monday, Jul 14, 1997 8:38 PM
Respond to of 80092
ERM tension builds as pound drags punt to the roof
http://biz.yahoo.com/finance/97/07/14/z0009_4.html
http://www.siliconinvestor.com/stocktalk/msg.gsp?msgid=1760679
To:John Barendrecht who wrote (513)
From: mikesloan Monday, Jul 14, 1997 5:19 PM
Respond to of 80092
HK a safe haven amid Asia currency woes
Australian Financial Review July 15/97
By Rowan Callick, Hong Kong
The ill wind of speculation blowing through South-East
Asian currencies is doing some good to Hong Kong.
The Hang Seng sharemarket index, which had been
floundering since the July 1 handover to China, burst
back into life last Friday, substantially as a safe haven for
money committed to the Asian region but anxious about
its security in South-East Asian States triggered by the
Thai baht taking a hit last week.
Yesterday, the Hang Seng soared again, reaching a new
record, as the Philippines' peso also came under extreme
pressure.
Hong Kong's dollar is pegged to the $US, at about
$HK7.8 to $US1. The spurt on Wall Street on Friday,
and the release of June figures showing US wholesale
prices coming down to reinforce America's low-inflation,
low-interest regime, further reinforced positive sentiments
in Hong Kong.
Mr Joseph Yam, chief executive of the Hong Kong
Monetary Authority -- the world's best-paid central
banker, at about $1.2 million a year -- said yesterday he
was not concerned about the prospect of speculation
against the $HK.
He said: "Basic economic fundamentals support a stable
currency, and that's what you're seeing in Hong Kong."
This special administrative region of China holds about
$100 billion official reserves, and its interest rates remain
at the same level as those in the United States.
Mr Yam told the Asian Debt Conference in Hong Kong:
"Stability of the Thai economy and its currency has been
adversely affected by an over-reliance on short-term
foreign borrowing for investment activities, and the
over-extension of property-related lending. Had there
been a mature debt market, the reliance on short-term
foreign capital, which is inherently volatile, would have
been reduced."
In Hong Kong, savings will be further institutionalised by
the implementation of the Mandatory Provident Fund, on
similar government-legislated, privately-managed lines to
the Australian pension scheme introduced by Mr Paul
Keating.
Liquidity was a problem in the Asian region, Mr Yam
said, because its markets were fragmented. He proposed
"more effective financial intermediation on an international
basis", facilitated by a platform to help cross-border
trades in debt securities within Asia.
The region's central banks were already discussing such a
scheme, starting with bilateral links as "the pragmatic way
forward", he said.
The monetary authority had agreed in principle to
establish a bilateral repurchase pact between its Central
Money-market Units and the Reserve Bank of Australia's
Information and Transfer System.
http://www.siliconinvestor.com/stocktalk/msg.gsp?msgid=1759436
To:Bobby Yellin who wrote (512)
From: John Barendrecht Monday, Jul 14, 1997 4:57 PM
Respond to of 80092
NY precious metals end lower, volumes light
NEW YORK, July 14 (Reuter) - COMEX and NYMEX precious metals futures ended lower Monday, but volumes were light, with activity tradionally slow during the seasonally weak demand period of the northern hemisphere summer.
``There are tentative signs that the gold price is forming a new base, but on the other hand many investors are still waiting for gold to revisit the lows closer to $300 seen last week,'' CPM Group research director, Joseph Rosta said.
COMEX August gold ended down $1.40 at $320.80 an ounce, with the August/September spread widening back out to $3.90 an ounce from $3.60 Friday.
August gold has consolidated between $325.00 and the contract lows at $314.60 in the past week, with daily momentum indicators recovering from their oversold condition, while 20-day historical volatility has steadied around 14 percent, up from six percent back in mid-June.
In the bullion market midday Monday, spot gold was quoted $319.70/20, compared to the London Monday afternoon fix at $321.70 and the New York close Friday around $321.60/10.
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.
COMEX gold open interest fell 1,969 lots Friday to 214,421 contracts, but open interest is at its highest levels in 18 months.
According to the CFTC Commitments of Traders data, net short open interest held by funds and small traders rose from 36,168 lots on June 10 to a record 70,665 lots on July 1, an increase of 34,497 lots, representing 3,449,700 ounces (107 tonnes) of gold.
But since the latest CFTC data dated July 1, COMEX gold open interest has risen a further 18,313 lots.
``The net speculative short position on COMEX is probably now 90,000-100,000 lots, more than 50 percent above the prior record,'' one hedge fund analyst said.
But OTC market positions are often two to three times greater than exchange-traded positions, and as a result speculative short positions by hedge funds may have increased by about 500 tonnes in recent weeks, an amount equivalent to one year's production by South African gold mines, he said.
``That is what has broken the gold price, not 167 tonnes of Australian reserve gold sold over six months,'' he said.
But ``the current overall flow of central bank metal delivered via official sales, and central bank lending to fund producer hedging and fund short sales, exceeds anything ever experienced before by this market,'' he said.
By comparison net official sales of gold by central banks for the whole of 1996 was 239 tonnes, according to industry consultants, Goldfields Mineral Services (GFMS), while net producer hedging averages about 200-300 tonnes annually.
But ``once the flow of borrowed gold from fund short sales and producer hedges abates, the slingshot will start to move in the direction of release,'' he said.
``Once the gold price rises above its chart breakdown point of $326.00, the odds are high that technical short selling will reverse.''
COMEX September silver ended down 8.5 cents at $4.275 an ounce, as the contract also consolidated just above contract lows seen last week at $417.50. The September/December spread narrowed further to 6.0 cents an ounce.
The spot gold/silver ratio edged higher to 74.8:1, continuing its recovery from two year lows around 66.00 seen in May this year.
NYMEX October platinum ended down $7.20 at $388.50 an ounce, but spot platinum in the physical market remained above $400 an ounce, quoted $402.50/406.50.
NYMEX September palladium ended down 55 cents at $152.45, with spot palladium around $164.50/168.50.
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.
http://www.siliconinvestor.com/stocktalk/msg.gsp?msgid=1759279
To:John Barendrecht who wrote (509)
From: Bobby Yellin Monday, Jul 14, 1997 3:31 PM
Respond to of 80092
Sir John Templeton is going to be on CNBC tomorrow around this time ...just announced...hopefully somebody will catch the interview.. this is what I have been waiting for..wonder if he will say just more of the same..
To:Bobby Yellin who wrote (510)
From: Ted Gregg Monday, Jul 14, 1997 4:12 PM
Respond to of 80092
Does Sir John ever talk about gold?
POG $319.90 down $1.30
Ted
To:Ted Gregg who wrote (511)
From: Bobby Yellin Monday, Jul 14, 1997 4:36 PM
Respond to of 80092
I only know he tends to be a contrarian and likes to use the phrase
buy when there is blood in the streets...he might also not want to
go against the threatening central bankers...or might eye other markets...ie Japan...
I am just curious when somebody is really going to mention that inflation is in paper assets...I might have to wait forever :)
To:PSkars who wrote (508)
From: John Barendrecht Monday, Jul 14, 1997 2:55 PM
Respond to of 80092
<<``That is what has broken the gold price, not 167 tonnes of Australian reserve gold sold over six months.''>>
Phil, the link to your article has expired. I guess that is why I paste most articles rather than link them.
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 months.
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 $417.50.
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.
http://www.siliconinvestor.com/stocktalk/msg.gsp?msgid=1758469
To:long-gone who wrote (504)
From: Bill Jackson Monday, Jul 14, 1997 9:03 AM
Respond to of 80092
In Canada we have no reps, no votes, we are far from the land of the rave and the home of the fee. However I would prefer far less government than we have.
Bill
To:Alex who wrote (492)
From: Bobby Yellin Monday, Jul 14, 1997 9:05 AM
Respond to of 80092
glad there is no cold war...this article is terrifying...a friend had mentioned something like this to me a few weeks ago...I just emailed him the article..
To:Alex who wrote (500)
From: gmweber Monday, Jul 14, 1997 11:01 AM
Respond to of 80092
Alex
Excellent charts!!
thanks
regards
gmweber
To:mikesloan who wrote (427)
From: PSkars Monday, Jul 14, 1997 12:37 PM
Respond to of 80092
To All: Sounds like Germany is selling Oil instead of Gold now!
http://biz.yahoo.com/finance/97/07/10/0024_z00_10.html is the URL which has the article. My wife, who is an excellent research analyst, found the article for me. It states that "Germany will sell off 400 million marks worth of strategic crude reserves this year to plug a growing budget deficit". Sounds like they decided to stop selling gold and start selling something that hasn't fallen so far in value. This could be a switch in central bank strategy...sell off something that is worth selling.
Best of Luck
Phil
To:Bill Jackson who wrote (499)
From: long-gone Monday, Jul 14, 1997 7:19 AM
Respond to of 80092
Bill,
I find your arguments sound, if somewhat shortsighted. BE PROACTIVE.
Call Your representatives. They work for us.
What I am proposing, is little more than a noise level support for the yellow metal. If the governments of North America were to accept mine grade bullion (90%+ pure) as payment of taxes by mining concerns, it would do little to change the amount of gold in the market. The mining companies can make only a very limited profit at these POG levels. It would show, however, a support of gold as a standard of trade.
this would provide the "bottom" we are all looking for!
Call them, Make things change!
richard
To:long-gone who wrote (502)
From: Bill Jackson Monday, Jul 14, 1997 8:10 AM
Respond to of 80092
Higly unlikely they would do that. Gold is 100% fungible and the cash from it is easy to raise. The losses from D'ore bars to 9999 fine is under 1% at major mines. Governments have an aversion to gold standards. It stops the presses. To ever go bakc on a gold standard we would have to stop annual salary increases forced on us by unions etc. I think that is why thelstandard failed. You would have to have a creeping price, every month it would climb by s small increment determined by gold production and GNP measures. What a bureaucracy would arise!! The Gold group, the God group. If we can slowly liquidate national hoards over 100 years it would work out fine, the hoards overhang would slowly vanish and if it was known that 350 tons/year was going to be sold it would be low enough to not inhibit the market. Dont forget that we are going to see a much bigger slump in recycling over the next 5 years as the last of the high gold computers gets scrapped.(made in the 70's and 80's)
What if everyone went to the mall and bought a gold plated chain?, or a 1 ounce bar? It does not take much collective purchasing power to do this.
Witness the DeBeers Diamond campaign, global in extent,
diamonds are forever.....
The majors need to get together and advertise this way with 0.1% of their production as an advertising budget. No mention of a company name, just a golden glow concept for love, respect, getting laid on Sat night etc, like diamonds, but different to form it's own identity.
I think that would be a good course of action.
Bill Jackson
To:Bill Jackson who wrote (503)
From: long-gone Monday, Jul 14, 1997 8:14 AM
Respond to of 80092
Bill,
Gold Has Worth!
Call your representative & get support for this vital industry!
Make the Call!
thanks
richard
http://www.siliconinvestor.com/stocktalk/msg.gsp?msgid=1755931
To:long-gone who wrote (494)
From: Bill Jackson Monday, Jul 14, 1997 1:17 AM
Respond to of 80092
A free market is also a mass market, capable of mass manipulation and mass hysteria. If enough people feel it will drop it will. At some time in the far future gold will become fully detached from the financial arena and be just for jewellery and industry. Right now the attachments is strong, and gold will go back, someday??
Bill
To:Alex who wrote (492)
From: Alex Monday, Jul 14, 1997 3:02 AM
Respond to of 80092
Two very interesting charts...
http://www.kitco.com/comments/gold/thread/970714.023038.bb_fisher.htm (dead link)
To:Alex who wrote (500)
From: mikesloan Monday, Jul 14, 1997 3:19 AM
Respond to of 80092
Gold funds rocked by price drop
Bullion hit a 12-year low last week,
and some managers fear the worst may not be over
Monday, July 14, 1997
By Paul Waldie
The Globe and Mail
The recent drop in the price of gold has been a blow to managers of resource and precious metals
funds, many of whom are still grappling with the collapse of Bre-X Minerals Ltd. earlier this year.
Some fund managers are putting on a brave face by saying the price drop has created opportunities
to buy undervalued mining stocks. But others say the worst may not be over.
"It's a difficult time," says John Weatherall, manager of Green Line Precious Metals Fund. "We are
very concerned about the outlook for gold."
Gold hit a 12-year low of $314 (U.S.) last week. It averaged $387 last year, and traded as high as
$420 in February, 1996.
The falling price has slammed the Toronto Stock Exchange's index of gold companies, which has
fallen 41 per cent since May, 1996.
The average return for precious metals and resource funds fell nearly 7 per cent in June, according
to data from Globe HySales. In contrast, the 16 other fund sectors increased in value last month.
For the past six months the return for the precious metals and resource funds was off 11.4 per
cent.
The softness in the gold price is being attributed in part to Australia's central bank, which
announced on July 3 that it was selling 167 tonnes of gold -- or about 68 per cent of its total
reserves. Banks in Belgium and the Netherlands also have recently sold some of their reserves.
The move by the banks is a signal that gold is losing its special status as the foundation of the
world's monetary system and is now just another commodity. Analysts fear central banks in other
countries also may start selling, which could drive the price below $300.
Mr. Weatherall says this is understandable.
Historically, gold was bought by governments and investors as a hedge against instability, he said.
"If you have a period of low inflation and peace in the world, after a while central banks prefer
financial instruments. Smaller countries, who had been so pleased they had gold during the [Second
World] War now wonder why they have got it at all."
Mr. Weatherall added jokingly that the only remedy may be a disaster.
"I tell my people here to go to church on Sunday and pray for war. You've got to have something
dreadful happen. History is depressing because someone in the end does do some dreadful thing.
But it seems unlikely it will be next week."
FundB6
Fund managers rocked by drop in gold price
For now, Mr. Weatherall says he is shuffling some of the stocks in his fund's portfolio to take
advantage of the drop in gold company stocks. He said his fund has managed to avoid a massive
drop in value and big redemptions by investors.
Jackee Pratt, manager of Toronto-based Maxxum Resource Fund, says the recent drop in the
price of gold has more to do with psychology than reality. She said gold is still in demand in many
parts of the world for jewelry and other commercial uses.
"What you do is you go through the fundamentals and look at the supply and demand numbers, and
the demand still looks pretty healthy. Demand seems to be growing faster than new mine
production."
But she adds that fears about central bank selling seem to have taken over the market.
"I can't tell you when the psychology is going to change and when the price is going to turn around.
But at $320, I think there is less reason for central bankers or companies to sell. I would think that
[the price] will come back."
Nearly a quarter of her fund is invested in gold company stocks and, for now, Ms. Pratt isn't
planning on decreasing that amount.
"I could, but I guess I feel that we are closer to a bottom. Over the next 12 to 18 months, the
[stock] prices we are seeing today will appear like bargains."
Ms. Pratt's view is shared by Wayne Deans, a partner at Deans Knight Capital Management Ltd.
in Vancouver, which manages the Marathon Resource Fund.
It "isn't necessarily a bad thing if you've got some cash to invest," he said. "It's going to present us
with some very interesting opportunities. I really believe that if you are a pure investor you look at
situations like this -- when everybody is tending to lose their cool over the price of gold -- as a
possible area of profitable investment."
For example, he cited Vancouver-based Manhattan Minerals Corp., which produces about
30,000 ounces of gold annually, as a good investment that has become an even better buy. "Today,
Manhattan is trading at 50 to 60 per cent of the value placed on the company just four months
ago."
Marathon's mix of investments is 10 per cent in forest products companies, 35 per cent in oil and
gas stocks and 20 per cent in mining companies. The remaining 35 per cent is held in cash, which
Mr. Deans said he plans to devote to buying more gold mining stocks.
He also is bullish about a rebound in the gold price.
"If the price stays where it is, it is going to render 50 per cent or more of gold production
uneconomic. And banks won't sell at these low prices so shortages might develop and you might
get a recovery."
But other fund managers and analysts say a recovery may be months away.
"The price of gold might not fall that much further this year, but it's hard to envision a significant
upside," said Richard Webb, publisher of The Fund Counsel, a Toronto-based mutual fund
newsletter.
"When you are faced with performance in other assets, like Canadian and U.S. equities which have
been so spectacular, it's very difficult to say, 'I am going to commit myself to gold.' "
"I think Canadian gold stocks are ridiculously overvalued," said Scott Penman, senior
vice-president of equities at mutual fund giant Investors Group Inc. in Winnipeg.
For example, Mr. Penman compared Denver-based Newmont Gold Co. with Barrick Gold Corp.
of Toronto. The companies are similar in terms of size and production, he said, but Barrick's
$11-billion market capitalization is about 40 per cent higher than Newmont's.
Mr. Penman said Canadian gold stocks have a long way to go before becoming reasonably priced.
Even if the gold price recovers to $350 an ounce, the market would still be overvalued, he said.
"At best it's a bear market that will last 12 months at least."
Victor Flores, who recently managed a large U.S. gold fund and is now an analyst with
Montreal-based Marleau Lemire Securities Inc., also believes gold stocks could fall farther.
"Fund managers are faced with redemptions and they have to sell. Many of them bought last year
and feel it's just best to get out."
He doubts that the current low stock prices will be enough to lure many fund mangers back.
"Some fund managers are down 80 per cent. Even if you can say to them, 'Hey, this is really cheap
now,' are they really going to make four times their money on that holding? Probably not, at least
not for a long, long time."
Mr. Flores said fund managers are going to have to re-examine their portfolios and look at the
fundamentals of each company. "What they really need to focus on is whether the companies they
own are going to be here in five years." He added that last year's hot market was an exception.
"You don't see these really hot markets every other year. It takes a few years between them and
we are still going to have to, unfortunately, chew through a lot of stock."
Precious metal funds
Percentage return
Total to June 30
assets 3 1
($million) months year
Altamira precious & strat 90.4 -18.2 -32.8
Dynamic precious 320.3 -14.7 -26.8
Friedburg double gold + 1.1 +2.9 +7.1
Global strategy gold + 116.6 -23.2 -36.5
Goldtrust 11.0 -15.0 -25.8
Green Line precious 137.6 -23.5 -23.7
Maxxum precious 18.2 -23.2 -33.2
Royal precious 352.4 -14.3 -26.6
Scotia excelsior Prec 61.9 -17.8 -19.7
Universal precious 116.8 -17.1 -24.1
Source: Globe Information Services
http://www.siliconinvestor.com/stocktalk/msg.gsp?msgid=1755675
To:John Barendrecht who wrote (497)
From: mikesloan Monday, Jul 14, 1997 12:03 AM
Respond to of 80092
No bottom in sight for gold
Australian Financial Review July 14/97
By Stephen Wyatt
The gold market is taking a breather from its bungy
jumping act. After dropping to 12-year lows of
$US314.50/oz early last week, gold finished trading on
Friday in New York at $US320.50/oz.
But most analysts think that this is just a consolidation
period before gold again takes another dive. "There are
no heroes left. All the contrarians [gold buyers] have
been taken out. There is such a momentum on the short
[selling] side, it looks like its going to go still lower," said
Andy Smith, London-based precious metals analyst with
Union Bank of Switzerland.
"Gold's not out of the woods yet. We still think the
market can go lower, especially given the vested interests
of some funds and banks," said Edward Kempf, of New
York-based metals consulting firm CPM Group.
Not even the gold producers are prepared to put their
money where their mouth is. And what an hysterical
mouth it's been after the recently announced Australian
Reserve Bank sale of 167 tonnes.
Australian gold miners point the finger at the RBA for
"unnecessary" and "insensitive" activity. Joseph Gutnick,
chairman of Great Central Mines, even suggests the RBA
should buy back the gold it sold.
But some gold analysts suggest that if gold is so sound,
then why don't the producers, including Gutnick, buy
back some of their own forward sales. After all, they
have sold about six times the amount of gold that the
Reserve Bank sold. Australian miners have forward sold
almost 1,000 tonnes of gold.
Fingering the RBA as the culprit for gold's collapse is
akin to shooting the messenger. The RBA sale simply
highlights the changing role of gold as a reserve currency.
It is seen as an expensive, non-income earning part of a
central bank's portfolio. And anyway, the gold price had
been falling for 18 months prior to the RBA sale.
"You mean those bastards are still holding 80 tonnes?"
was a common statement in the Australian bullion market
shortly after the RBA announced it had sold 167 out of
its 247-tonne gold reserve, one bullion dealer said.
This gives some idea of how some dealers view gold as
an investment. And it has been the lack of investment
demand for gold that has been a major factor in its
demise. Not only was there a 4 per cent decline in bar
hoarding last year, but weakness in the official coin
market "points to a certain disillusionment with the gold
price last year", said Gold Fields Minerals Limited in its
Gold 1997 report.
Add to this the fact that central banks have been net
sellers of gold since 1989 then it is no surprise that
fabricator demand, although strong, has just not been
enough to absorb the selling.
And the Reserve Bank of Australia is hardly alone as a
gold seller. It's sale is just one among many. Central bank
selling of gold accelerated in 1989 when Belgium
announced a 127-tonne sale. Since then it has sold an additional 580 tonnes. The Netherlands kicked its sales
off in 1993 with the sale of 400 tonnes and then another
300 tonnes in late 1996.
No matter what the gold bugs say, in such a bearish
environment, gold has little glitter. And the news just gets
worse. Inflation in the US is nowhere to be seen. On
Friday the US producer price index, which measures
inflation in goods at the wholesale level, showed a 0.1
per cent fall for June. The index has fallen every month
this year, which has never happened before.
These factors make Deputy Prime Minister Tim Fisher's
comments that gold is falling because of the activities of
screen jockeys in braces seem more than a little shallow.
To really polish it off, all the gold market now needs is for
the Sojouner Mars Rover to discover that Mars is littered
with more gold than the vaults of the world's central
banks. And it's possible -- Mars is a big planet.
But if gold has further to fall, just how low will it go?
"If you think of the gold market collapse as a currency
collapse," says Andy Smith, "then it's impossible to detect
a bottom. Central banks have moved from being mother
hens to werewolves."
Is the gold slide like the slide in the rand, sterling, the
Mexican peso or the rouble ?
"The US threw $US50 billion to stabilise the peso. But
who is going to do this for gold? It's scary," said Smith.
Last week the Wall Street Journal said that if two
traders on a desert island had every statistic on the world
economy and if they were asked to estimate the price of
gold, "they wouldn't have the slightest clue". Just like a
currency, "there is no intrinsic yardstick to fall back on"
when valuing gold.
To:John Barendrecht who wrote (495)
From: John Barendrecht Sunday, Jul 13, 1997 10:52 PM
Respond to of 80092
"I tell my people here to go to church on Sunday and pray for war. Gold slump hurts metals funds:
http://www.southam.com/calgaryherald/cgi/newsnow.pl?nkey=ch&...
To:John Barendrecht who wrote (497)
From: mikesloan Monday, Jul 14, 1997 12:03 AM
Respond to of 80092
No bottom in sight for gold
Australian Financial Review July 14/97
By Stephen Wyatt
The gold market is taking a breather from its bungy
jumping act. After dropping to 12-year lows of
$US314.50/oz early last week, gold finished trading on
Friday in New York at $US320.50/oz.
But most analysts think that this is just a consolidation
period before gold again takes another dive. "There are
no heroes left. All the contrarians [gold buyers] have
been taken out. There is such a momentum on the short
[selling] side, it looks like its going to go still lower," said
Andy Smith, London-based precious metals analyst with
Union Bank of Switzerland.
"Gold's not out of the woods yet. We still think the
market can go lower, especially given the vested interests
of some funds and banks," said Edward Kempf, of New
York-based metals consulting firm CPM Group.
Not even the gold producers are prepared to put their
money where their mouth is. And what an hysterical
mouth it's been after the recently announced Australian
Reserve Bank sale of 167 tonnes.
Australian gold miners point the finger at the RBA for
"unnecessary" and "insensitive" activity. Joseph Gutnick,
chairman of Great Central Mines, even suggests the RBA
should buy back the gold it sold.
But some gold analysts suggest that if gold is so sound,
then why don't the producers, including Gutnick, buy
back some of their own forward sales. After all, they
have sold about six times the amount of gold that the
Reserve Bank sold. Australian miners have forward sold
almost 1,000 tonnes of gold.
Fingering the RBA as the culprit for gold's collapse is
akin to shooting the messenger. The RBA sale simply
highlights the changing role of gold as a reserve currency.
It is seen as an expensive, non-income earning part of a
central bank's portfolio. And anyway, the gold price had
been falling for 18 months prior to the RBA sale.
"You mean those bastards are still holding 80 tonnes?"
was a common statement in the Australian bullion market
shortly after the RBA announced it had sold 167 out of
its 247-tonne gold reserve, one bullion dealer said.
This gives some idea of how some dealers view gold as
an investment. And it has been the lack of investment
demand for gold that has been a major factor in its
demise. Not only was there a 4 per cent decline in bar
hoarding last year, but weakness in the official coin
market "points to a certain disillusionment with the gold
price last year", said Gold Fields Minerals Limited in its
Gold 1997 report.
Add to this the fact that central banks have been net
sellers of gold since 1989 then it is no surprise that
fabricator demand, although strong, has just not been
enough to absorb the selling.
And the Reserve Bank of Australia is hardly alone as a
gold seller. It's sale is just one among many. Central bank
selling of gold accelerated in 1989 when Belgium
announced a 127-tonne sale. Since then it has sold an additional 580 tonnes. The Netherlands kicked its sales
off in 1993 with the sale of 400 tonnes and then another
300 tonnes in late 1996.
No matter what the gold bugs say, in such a bearish
environment, gold has little glitter. And the news just gets
worse. Inflation in the US is nowhere to be seen. On
Friday the US producer price index, which measures
inflation in goods at the wholesale level, showed a 0.1
per cent fall for June. The index has fallen every month
this year, which has never happened before.
These factors make Deputy Prime Minister Tim Fisher's
comments that gold is falling because of the activities of
screen jockeys in braces seem more than a little shallow.
To really polish it off, all the gold market now needs is for
the Sojouner Mars Rover to discover that Mars is littered
with more gold than the vaults of the world's central
banks. And it's possible -- Mars is a big planet.
But if gold has further to fall, just how low will it go?
"If you think of the gold market collapse as a currency
collapse," says Andy Smith, "then it's impossible to detect
a bottom. Central banks have moved from being mother
hens to werewolves."
Is the gold slide like the slide in the rand, sterling, the
Mexican peso or the rouble ?
"The US threw $US50 billion to stabilise the peso. But
who is going to do this for gold? It's scary," said Smith.
Last week the Wall Street Journal said that if two
traders on a desert island had every statistic on the world
economy and if they were asked to estimate the price of
gold, "they wouldn't have the slightest clue". Just like a
currency, "there is no intrinsic yardstick to fall back on"
when valuing gold.
http://www.siliconinvestor.com/stocktalk/msg.gsp?msgid=1755165
To:long-gone who wrote (493)
From: John Barendrecht Sunday, Jul 13, 1997 10:04 PM
Respond to of 80072
Dubai gold souk stays upbeat, India trade slow
DUBAI, July 13 (Reuter) - Gold jewellery retail demand in the Gulf Arab emirate of Dubai has remained upbeat after bullion's steep price decline though traders saw few signs of an upturn in re-export sales to the key Indian market.
Indian gold import demand remained seasonally subdued because of monsoon rains and was unlikely to pick up before buying for the country's festival and wedding season took hold at the end of next month, Gulf-based traders said.
Indian demand was also blunted as Indian funds were being geared towards the local bullish stock market and other equity exchanges rather than the traditional safe haven of gold.
``Demand from India is limited because of the monsoon season,'' said one Indian trader based in Dubai.
Gold demand is India usually rises at the end of the monsoon as crop-farmers sell their harvest.
Dubai is the main feeder market into India which is the world's single largest consumer of the yellow metal.
Retail sales in Dubai's main historic souk in contrast were higher as the country's large Indian sub-continent expatriate community and Gulf nationals took advantage of lower prices.
Dubai's benchmark TT bar -- 3.746 ounces of 24 carat gold -- was quoted at 4,446 UAE dirhams ($1,210) on Sunday based on a premium to spot rates of $1.36. This was down from 4,491 dirhams on July 6 but above the mid-week low of 4,390 dirhams.
International spot gold was last traded on Saturday at $321.20-70 an ounce, down from $324.50-$325.00 week a earlier but above 12-year price lows caused by Australian central bank reserve selling.
``I do not see much room for the market to go lower...It has bottomed out and a modest reversal is on the cards,'' said one trader based in the Gulf. ($1 equals 3.67 dirhams)
To:John Barendrecht who wrote (495)
From: John Barendrecht Sunday, Jul 13, 1997 10:46 PM
Respond to of 80072
'Equity Cult' exists in Canada
http://www.southam.com/calgaryherald/business/970713/971753.html
http://www.siliconinvestor.com/stocktalk/msg.gsp?msgid=1754837
To:mikesloan who wrote (491)
From: Alex Sunday, Jul 13, 1997 6:59 PM
Respond to of 80072
Is this the world that C.B.'s claim to have under control?
http://www.washtimes.com/internatl/internatl3.html
To:stanley new who wrote (484)
From: long-gone Sunday, Jul 13, 1997 9:50 PM
Respond to of 80072
Stanley,
Understand from this thread,of this possibility in Canada. Projected spending reductions (per CNBC rumor) might cause same in US by year 2008 lower quality paper of europe's govt's (not backed by as much gold & freedom)are not as well thought of.
richard
Also, all on all threads, write your elected representatives! NOW!!!
Get them to support gold. This is one of the few times helping investors,will help the government.
When Harley Davidson was under fire from Honda/Yamaha..., The US government saved them to fight another day. They are now showing a BIG
profit.
The job of the government is to protect their citizens! We are getting killed by Europe's Central Banks!! Speak to them & IR at each gold mining company in North America!!! Get them to "twist arms" of "elected officials". These Guys work for US! tell them to support GOLD
& the dollar!
We are under attack by agents of Europe. We can & should not have to win this fight alone! Call NOW!!!
rh
To:Bill Jackson who wrote (483)
From: long-gone Sunday, Jul 13, 1997 10:03 PM
Respond to of 80072
Bill,
One of the parts that makes this whole thing work - we call it a free market economy - is that when something is down,something else is up!
if gold does not get some support now, all could be lost. think about it.
richard
To:mikesloan who wrote (487)
From: Alex Sunday, Jul 13, 1997 3:15 PM
Respond to of 80072
http://www.afr.com.au/content/970714/market/markets4.html
To:Alex who wrote (488)
From: Alex Sunday, Jul 13, 1997 3:43 PM
Respond to of 80072
http://biz.yahoo.com/finance/97/07/13/z0009_3.html
To:Alex who wrote (489)
From: Alex Sunday, Jul 13, 1997 3:46 PM
Respond to of 80072
http://search.washingtonpost.com/wp-srv/WAPO/19970711/V00068...
To:Alex who wrote (490)
From: mikesloan Sunday, Jul 13, 1997 4:00 PM
Respond to of 80072
Low inflation pumps up US economists
Australian Financial Review July 14/97
By Colleen Ryan, Washington
Economists across the United States hailed the death of
inflation, at least for the time being, as the producer price
index for June fell for the sixth consecutive month.
This is the longest string of declines since 1947 when the
Government began tracking these prices. And it is
particularly significant given that it has occurred during a
period when the economy is growing strongly and
unemployment is at an unusually low 5 per cent.
"For the foreseeable future inflation is dead," a senior
vice-president for the National Association of
Manufacturers, Mr Paul Huard, said. Mr Joel Narloff of
First Union Corp bank said: "It's time to call in Sherlock
Holmes, for we now have the case of the missing
inflation."
Mr Bruce Steinberg, chief economist with Merrill Lynch,
said: "Basically, there is simply no pressure in the inflation
pipeline. We look for a stable inflation rate during the
next year and would not rule out further disinflation."
The search for reasons for such benign price behaviour
has centred on increasing productivity due to major
investments in information technology, the flow through of
benefits from the corporate downsizing of the 1980s, a
stronger US dollar compared with other currencies, and
relatively weaker economic growth in Japan and Europe
which has contributed to falling prices for imported
materials and finished goods.
Agricultural performance is also important. Supply is
strong in most areas compared with last year when strong
demand, poor crops and drought pushed grain prices to
high levels. The Agriculture Department on Friday
predicted bumper US crops of winter wheat and
soybeans. Subdued labour costs, which typically account
for more than two thirds of average corporate outlays,
and the falling price of oil are also important factors
contributing to the flat price performance.
In June the Producer Price Index for finished goods fell
by one tenth of 1 per cent, bringing the drop for the first
six months of the year to an annual rate of 3.4 per cent.
Changes in the producer price index usually show up
later in the cost of these goods at the retail level.
http://www.siliconinvestor.com/stocktalk/msg.gsp?msgid=1753404
To:mikesloan who wrote (486)
From: mikesloan Sunday, Jul 13, 1997 7:29 AM
Respond to of 80072
An emerging bubble
Financial Times
THURSDAY JULY 10 1997
Some very strange decisions are being made in the world's financial
markets. Serious financial institutions are buying billions of dollars of
long-term bonds from countries that five years ago were regarded as
economic disaster areas. Moreover, they have been buying them at
razor-thin margins over US Treasury bond yields.
Some institutions will come to rue their euphoria. Many know it, but each
believes it will be the one to escape the consequences that will be visited
on its less nimble rivals. Their behaviour is one important sign that central
banks in Japan and continental Europe are still pursuing an expansionary
monetary policy, pushing money into their economies in an attempt to
revive the spirits of consumers. But consumers have been slow to react.
This excess liquidity has spilled over into financial assets on a global basis,
driving up prices. Much of the money ends in the hands of institutions in the
US which scour the world in search of higher returns.
The behaviour of investment institutions also contributes to the euphoria.
With yields so low, institutions' returns come mainly from capital gains.
With their performance against their competitors measured quarterly,
short-term trading gains or losses far outweigh relatively small differentials
in annual bond yields.
This means that institutions can justify buying, to cite some recent
examples, US dollar bonds from China yielding less than a percentage
point over the equivalent US Treasury paper and bonds from Slovenia with
a yield difference of less than half a point.
These are margins that in no way compensate investors for the higher risks
they are taking. Fund managers know this but cannot bail out, lest the rally
continues and their performance against their peers looks anaemic.
These "emerging" bond markets are not alone. Russia's very risky stock
market has raced away this year, as has Mexico's in recent weeks. The
Thai stock market last week shrugged off a devaluation that could further
undermine the banking system, and rose sharply. There is even a growing
interest among investors - or at least among the brokers that vie to serve
them - in Africa. In the US itself, the junk bond market has been roaring
ahead and bank lending margins to corporate borrowers have slumped.
There are good reasons why some emerging markets should be more
highly rated than they were. In a world of increasingly institutionalised
savings, fund managers are seeking to spread risk by investing in new
financial markets. In regions such as Latin America, pools of domestic
savings are also being created through private pension funds. Moreover,
many developing economies are simply more open and market-oriented
than they were in the 1980s. Inflation has fallen and the prospects for
growth in certain emerging markets are genuinely better than in the more
developed world.
Yet it is abundantly clear that many investors are not distinguishing adequately between these good risks and the bad. The history of financial market bubbles suggests they should now act with greater caution. Let the buyer beware.
http://www.siliconinvestor.com/stocktalk/msg.gsp?msgid=1752080
Financial Times of London July 12/97 (Gold bulls do not read this.)
Gold: Not quite so 'precious' any more
SATURDAY JULY 12 1997
Deborah Hargreaves examines the latest price plunge and finds prospects gloomy
A bout of depression has enveloped the precious metals market as analysts question whether
gold, beset by tumbling prices, is losing its status as a "safe haven".
Governments and private investors have traditionally turned to gold during periods of
inflation and economic instability. But, with many central banks selling off reserves, a
significant change in the way the metal is valued could be under way.
The price drop of $14 a troy ounce over the past 10 days was sparked by the
announcement that Australia's Reserve Bank had sold two-thirds of its gold holdings over
the previous six months. Prices slipped to a 12-year low of around $318 an ounce and, in
spite of some consolidation since, most analysts believe the market will go lower over the
longer term.
"There is a genuine shock factor here," says Andy Smith, precious metals analyst at UBS in
London. "If Australia, as a leading producer, is not interested in holding gold, who is?"
Australia is not alone. In recent years, central banks in Canada, the Netherlands and
Belgium have got rid of gold, while more recently there was a serious row in Germany over
a proposed revaluation of its reserves. Moreover, Switzerland and Portugal have both said
they will sell.
But what makes Australia's move such a blow to the market is that the country's mining
companies are important producers of gold and had counted on the government to support
prices.
Reaction to the Reserve Bank's action has been bitter. Australia's Association of Mining and
Exploration Companies said the cyclical downturn in the market had been made worse than
it would have been. The World Gold Council added: "For a leading 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."
Explaining its reason for selling - a decision supported by the country's prime minister - the
Reserve Bank said: "While there was a case to hold some gold as a contingency against
unforeseen events, the previous holdings - about 20 per cent of international reserves - were
no longer justified."
The Australian central bank hit out at its critics yesterday, blaming gold miners and
speculators for the fall in the gold price this year. It said the money from the gold sale had
been put to better use buying foreign securities such as bonds.
If all central banks were to take the same approach, however, the market would be awash
with gold and the price would plunge.
The holdings of central banks differ widely. Around 73 per cent of US foreign reserves - or
261.75m oz - are in gold but Australia and Canada now have only about 5 per cent.
M. Murenbeeld & Associates, a Canadian precious metals consultant, estimates that if most
countries were to cut their holdings to 10 per cent of foreign reserves, an additional 618m oz
would come to market - almost the same as eight years' new supply from mines.
Smith compares the present-day gold market with silver a century ago. In 1871, about 80
per cent of the world's population had currencies redeemable in silver. Ten years later,
silver's monetary value had been nearly obliterated.
Demand for gold depends so much on its value as a "precious" metal and a safe haven - it
has few industrial uses - that its price could collapse if bankers start to lose interest.
Technical analyst Brian Marber, who charts the price of gold, says an important pattern is
building up which shows the price hitting $150 an ounce over the long term. Smith himself
believes it will drop below $300 fairly quickly.
Over the short term, the price could bounce back, but most observers believe the longer
term trend is far from promising.
http://www.siliconinvestor.com/stocktalk/msg.gsp?msgid=1751856
To:Bill Jackson who wrote (461)
From: long-gone Saturday, Jul 12, 1997 10:25 PM
Respond to of 80072
Bill,
Many will note a bond shortage coming soon. While many areas of the world have a real estate shortage,others are having a glut thus a hard way to get good returns if one were to buy into shortage areas at high valuations. Most of the stock markets of the world hold room for growth in but one sector(and as we know all to well) little more bad news can be thrown at the precious metals,most has to be out now.
Demand for the metal as safety, jewerly,& electronics will return! Many know this & have been (somewhat)supporting the price of the mining stocks.
many have not taken the % hit the metal has of late! stocks always turn prior to the metal.
I think you are right!
rh
To:long-gone who wrote (482)
From: Bill Jackson Saturday, Jul 12, 1997 11:01 PM
Respond to of 80072
Many bargains in mining stock now. I think that we will see a fall in NYSE and NASDAQ, and this will make gold jump, and gold stocks will be seen as bargains by the funds and they will flow money at them again. By this fall we should have a good recovery, in the gold and mining areas.
Bill
To:long-gone who wrote (482)
From: stanley new Saturday, Jul 12, 1997 11:27 PM
Respond to of 80072
Richard: Very interested in hearing more regarding your statement about "bond shortage coming soon." Certainly have been good to trade in last few days. ....sn
To:stanley new who wrote (484)
From: John Barendrecht Sunday, Jul 13, 1997 1:10 AM
Respond to of 80072
China gold output at 60 tonnes in Jan-June
BEIJING, July 13 (Reuter) - China's gold output in the first half of this year reached 60.0 tonnes, up 18 percent from the same period last year, the China Business Weekly said on Sunday.
The northern province of Shandong ranked first in output, followed by Henan, Hebei and Shaanxi provinces, the newspaper said.
Gold output in the southeastern province of Fujian rose by 500 percent year-on-year in the period due to expanded production at the Zijinshan and Shuangqishan mines, it said.
However, production of gold in Henan, Heilongjiang and Jilin provinces dropped in the first half, it said.
The decline in output in Jilin and Helongjiang was due to exhausted resources after long-term exploration and a lack of new reserves, it said, but gave no reason for the fall in output in Henan, China's second-largest gold producer.
China has said it expects to produce 130 tonnes of gold this year, up from about 120 tonnes in 1996. That would probably allow it to overtake Russia, ranking it in fifth in the world, the newspaper said.
China has said it plans to raise annual gold output to 150 tonnes by the end of the century.
http://www.siliconinvestor.com/stocktalk/msg.gsp?msgid=1751708
To:John Barendrecht who wrote (475)
From: Stephen D. French Saturday, Jul 12, 1997 12:43 PM
Respond to of 80072
Precious Little Upside - (via this week's Barrons)
Why gold's price has plunged -- and could tumble lower still
Michael Santoli
Table: Central Banks Take Dim View Of Gold
he gold market, desperate to account for the metal's tumbling price this year,
found a villain this month in the unlikely form of Australia's central bank. The bank's
announcement July 3 that it had sold two-thirds of its gold reserves in recent months
knocked the wind from the market, sending prices down violently to 12-year lows of
$314 a troy ounce, 14% below where the metal started the year. For gold holders, it
was bad enough that the consuming fear of central-bank sales was affirmed. Even
worse for market sentiment was that the culprit was Australia, one of the world's
biggest gold producers. What's next, Saudi Arabia switching its government limos
from gasoline to electric power?
But Australia's actions are more a symptom than a cause of gold's problems, and
outright sales by central banks in general have been overdramatized as a looming
supply overhang.
In the first four months of 1997, the period when Australia was apparently unloading
much of its cache, the change in central-bank reserves of the metal was small.
According to the International Monetary Fund, central-bank reserves had ebbed to
897.5 million ounces by April 30 from 906.1 at the start of the year. (In addition, the
IMF, European Monetary Institute and Bank for International Settlements hold a bit
more than 200 million ounces among them, bringing total official reserves to 1.1 billion
ounces - about 30% of all the gold believed to ever have been taken from the
ground.)
And, of course, the market absorbed Australia's dumping of 5.3 million ounces
without even knowing it - not surprising, given that 30 million ounces of gold pass
through the London Bullion Market each day.
The damage from Australia's decision isn't so much in the actual weight of metal
hitting the market, but in reinforcing what the declining gold price was already
suggesting: Gold's role as the ultimate store of value, as a key monetary instrument, is
withering in the current economic climate, making the yellow metal more and more
like any other commodity.
The sales ``call into question the fundamentality of gold,'' says Peter Munk, chairman
of Barrick Gold. ``The allure of gold as the automatic safe haven in a crisis is gone.
It is gone not because of Australia's sales, but Australia sold because it is gone.''
Current prices are below the average global cost of producing gold, making more
than half of the world's mines unable to book a profit on the next ounce they gather.
This surely will lead to production halts among high-cost producers, such as South
African companies. In fact, to gold boosters, this suggests that the recent price action
was a ``selling climax,'' a piling-on by short sellers that will quickly be rectified by the
forces of supply and demand.
But unlike in many other commodities markets, where prices below the cost of
production tend to right themselves once stockpiles are depleted, gold can wallow
below production costs because of the massive inventory stored around the globe.
Virtually no gold, after all, has ever been consumed or destroyed, creating a huge
latent supply that is sent to the market largely through the back door as central banks
lend out their gold to gold producers, which sell it forward. Munk, whose company is
an exception in having locked in an average price of $420 an ounce for its production
through 2000, thus sees no reason gold can't decline below $300 and then stay there
for some time.
Some other producers are at least partially hedged, such as Royal Oak Mines,
which has locked in at $395 an ounce, while Coeur d'Alene stopped hedging as gold
fell. Most North American producers, though, have costs well below $300 an ounce,
giving them some remaining cushion. Newmont Mining, for one, says 1997 cash
costs will be less than $200 an ounce.
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.
This argument makes gold the flip side of the vaunted ``New Era'' in the financial
markets, in which gradual economic growth and modest inflation foster low interest
rates and rising liquidity.
It's just such an environment that has made investors chase capital appreciation at
increasingly higher prices in the stock market, at the expense of dividend income or
general safety. If current income is disparaged by today's investor, certainly the
concept of preserving principal can only fare worse.
Michael Kosares, president of Centennial Precious Metals in Denver and author of a
book on investing in gold, says he has seen an uptick in demand at his firm from those
relatively few individuals who view gold as ``an asset-preservation instrument.'' Not
surprisingly, ``we have yet to see demand from people who want to buy gold because
they think it will go way up.''
Today's financial markets also have found a way to supersede another of gold's
historical roles, that of inflation hedge.
Smith Barney investment strategist John L. Manley notes that, in the Greenspan era,
the bond market is acting as a high-precision thermostat, attuned to inflation and
expectations thereof. Bond prices drop violently at the mere hint of incipient inflation,
raising interest rates and acting as a governor on the pace of
economic activity. This kind of bond market has helped bring the inflation-adjusted
gold price to the levels of the early 1970s, before investors were trained to expect
ever-accelerating price increases. And it has intercepted the ripples of inflation fears
before they get to the gold market.
One harbinger of the prospects for the yellow metal's price comes from central
banks that aren't selling, but instead are active in making gold loans. To glean an
interest rate of 1%-2% on an otherwise inert asset, central banks lend their gold to
middlemen, who then provide it to gold producers, which generally sell the metal
forward to lock in a price. Angell says: ``Central banks wouldn't be willing to lend
gold out if they thought the price were going to rise.''
Investment demand, or the lack of it, has been gold's key vulnerability in recent
years. Demand from jewelry fabricators and industrial users has been steady, if not
fast-growing, of late. But investment demand in 1995 and 1996 came to only a
combined 3.7 million ounces. This was far below historic levels and wasn't even
equal to the four million ounces of a weak year like 1994, according to CPM Group.
Encouraged by the long bull market in equities, investors today need no new reason
to buy stocks. But with inflation in check, many see no compelling reason at all to
purchase gold.
If gold has lost much of its potency and appears to have no impetus to rise in the near
term, it need not be permanently on the outs - as even the bears will admit. A major
factor in its slippage has been the impressive strength of the U.S. dollar. Any
sustained weakness in the dollar would help gold. One precious-metals trader says he
took to heart the recent comment by the Japanese finance minister - since disclaimed
- that continued strengthening of the dollar might tempt Japan to sell U.S. Treasuries
and perhaps buy gold.
The remark was important, the trader says, ``simply because it put bonds and gold
into the same sentence.''
Make a Clear Statement
Barrick Gold's Munk believes in the eventual success of European monetary union,
which would create a single central bank on the Continent before the turn of the
century and would free the gold market from its current state of confusion. Upon
unifying, the one bank will have to, in Munk's view, make a clear statement on its
gold-reserves policy or forfeit any legitimacy. A hopeful sign, but one that means
perhaps another two years of gold investors looking over their shoulders for the next
central-bank sale.
Certainly, if Greenspan or a successor at the Fed were to lose the zeal for pursuing
price stability, it could give gold a good excuse to rally.
And if much of gold's monetary mystique is gone, making it a truer commodity -
subject most of all to real supply and demand - that may not be all bad over the
longer term. Commodities of all types today are in large part a way to follow the
broad, powerful theme of Asian wealth generation. And gold holds a valued cultural
place through much of East Asia and India as a vehicle of individual savings and
prestige.
Then there is always, when speaking of gold, the force majeure clause, under which unforeseen disaster can provide a great lift to the market. But the historic value of gold as a haven amid global emergencies - as a sort of call option on calamity - seems to have been diluted.
Gold prices, for instance, got only a fleeting boost from the stock market crash of 1987, the Persian Gulf War and other disruptive events of the past decade.
This puts the gold bull in the odd fix of perhaps wishing that things will be different - and worse - next time. And if they aren't, he'll be in an even odder - and more painful - fix.
To:John Barendrecht who wrote (471)
From: Bill Jackson Saturday, Jul 12, 1997 9:56 PM
Respond to of 80072
upwards momentum is seen, at last. Barrick shares went up.
Bill
http://www.siliconinvestor.com/stocktalk/msg.gsp?msgid=1751152
To:John Barendrecht who wrote (464)
From: Mark Kubisz Saturday, Jul 12, 1997 12:06 AM
Respond to of 80072
John, after I read Pat's post I wanted to respond immediately. Fortunately I read ahead and saw that you had already responded with all the points that I wanted to raise, plus more. Excellent response, and thanks.
Sorry to hear that you are so busy now. We'll miss your diligent posting.
Cheers,
Mark
To:John Barendrecht who wrote (469)
From: Pat O'Brien Saturday, Jul 12, 1997 1:36 AM
Respond to of 80072
John, yes sort of like the old infomercials, until someone woke up and said we better make them start to print "infomercail is a conspicuous place so the public is aware that this is not editorial content here.
Respectfully, Pat O'Brien, NVE
To:paul ross who wrote (468)
From: Abner Hosmer Saturday, Jul 12, 1997 4:09 AM
Respond to of 80072
Paul -
>>Milling-stanley has another theory. He says the biggest selling power in gold is coming not from central banks but from speculators. He cites the Commodities Futures Trading Commission's weekly commitment of traders report. It showed a fat surge in "spec" shorts as of Joly 1. He adds that the cash and forward markets are from 3 to 10 times larger than Comex gold trading. "So it seems to me spec shorts now stand at an all-time record.".....<<
From 3 to 10 ? If the head gold- market analyst for the World Gold Council doesn't know doesn't know, I wonder how the heck we are suppossed to figure it out ?
Tom
To:John Barendrecht who wrote (470)
From: John Barendrecht Friday, Jul 11, 1997 10:52 PM
Respond to of 80072
Bre-X hasn't scared Canadian firms
STEPHEN EWART
Calgary Herald
All the negative publicity about Indonesian meddling in the business world during the Bre-X debacle has hardly scared off Canadian energy companies.
The sprawling resource-rich archipelago in southeast Asia is second only to the United States as a destination for Canadian companies heading abroad in the search of oil, natural gas or other riches associated with the energy business.
Twenty-nine energy Canadian companies have operations in Indonesia, says industry analyst Ian Doig in a new report called Canadian Energy Ventures Abroad.
Doig's study found that 128 Canadian exploration, transportation and service companies had international operations around the globe. Not surprisingly, the United States was the most favored nation with about 70 Canadian companies operating there.
The trials and tribulations of Bre-X Minerals Ltd. may have put Indonesia on the map for most Canadians in the last year but the former Dutch colony has long been popular with Canadian energy companies.
In 1961 Asamera Inc. signed the first production-sharing agreement in Indonesia.
"Indonesia has been a good hunting ground for Canadian companies," says Doig. "Canadians know the ground rules. They know the procedures and they've generally made good discoveries, not great ones, they've been able to deal with."
Companies operating in Indonesia include senior producers such as Talisman Energy Inc., Gulf Canada Resources Ltd. and Canadian Occidental Petroleum Ltd.; juniors like Tracer Petroleum Corp.; and a variety of service companies.
TransCanada PipeLines Ltd. has secured a foothold in southeast Asia's booming energy market through the purchase of a stake in a project to build and operate two huge power plants in Indonesia.
The lure is obvious.
Indonesia has been one of the most prolific oil producers in the world since Royal Dutch made a discovery in Sumatra in 1885 which became the base of the Shell empire. Indonesia produces about 1.3 billion barrels of oil a day.
While Bre-X had scandalous problems with political interference and official corruption before its fabled Busang gold deposit was exposed as a fraud, oil companies have generally suffered few such woes.
"The success of the oil industry probably means they've (Indonesian government) taken a more business-like approach on the oil side than may have been evident in the mining side," says Dick Gusella, president of Carmanah Resources Ltd., who has operated in Indonesia since the early 1980s. "From my experience once you sign a contract in Indonesia it's as good as gold."
Gusella says Carmanah has suffered from guilt by geographic association with Bre-X, along with some problems meeting its production forecasts of 4,000 barrels of oil a day. Its share price has fallen from $7.25 to less than $5.
Tracer, a Vancouver-based company, has also felt the Bre-X factor. It says its having difficulty finding partners to farm-in on its oil and natural gas exploration block on Kalimantan near the Busang site.
Gulf Canada, which acquired Asamera in 1988, has had few such problems.
Gulf produces about 25,000 barrels of oil a day in Indonesia expects to be producing 250 million cubic feet of gas a day by fall. It will also start selling shares directly in its Indonesian subsidiary by fall.
"We're continuing to expand aggressively in Indonesia," said Gulf Canada spokesman Dennis Martin. "It's been a really good news story for us."
To:John Barendrecht who wrote (475)
From: paul ross Friday, Jul 11, 1997 11:48 PM
Respond to of 80072
There was an interesting interview on CNBC this afternoon with Jimmie Rodgers about gold. Rodgers, though bearish on gold still feels that world wide inflation is imminent. Following is some of the statistics that were presented in the interview.
TOP 5 CENTRAL BANK HOLDERS of GOLD
(millions of troy ounces)
1. US 261.8
2. Germany 95.2
3. Switzer. 83.3
4. France 81.9
5. Italy 66.7
INTERNAL INSTITUTIONS
(mills. of troy oun.)
total central bank holdings 903.6
Intern. Monetary Fund 103.4
European Monetary Institute 89.7
___________
1096.7 total
TOP 6 GOLD PRODUCING COUNTRIES
(mil. of troy ounces)
1996 1999 (est.)
1. So. Africa 15.9 14.6
2. USA 10.6 12.7
3. Australia 9.3 7.5
4. CIS 7.2 7.5
5. Canada 5.3 5.8
6. China 4.7 6.0
total world product. 74.6 83.1
TOTAL WORLDWIDE GOLD INVENTORY
4.02 billion troy ounces
<eom>
http://www.siliconinvestor.com/stocktalk/msg.gsp?msgid=1747972
To:John Barendrecht who wrote (470)
From: John Barendrecht Friday, Jul 11, 1997 10:49 PM
Respond to of 80072
Banks, brokerages need safeguards: Study.
NEW YORK - Big banks, brokers and insurers - not governments - should take the lead in adopting safeguards against rogue employees or poor managers who threaten the global financial system, a new study says.
The study, released Friday, was prepared by the Group of Thirty, a leading group of international public and private officials.
They warned that sweeping changes in commercial and investment banking pose a risk to financial stability.
The study cited Mexico's financial crisis in 1995, which spilled into other countries, and Barings Bank of Britain, which was brought down by bad bets a rogue trader made on Asian markets.
"The threat of serious disruption to the international financial system may be small, but is nonetheless a serious concern," the study said.
"Shocks sufficient to disrupt the international financial system may arise in individual countries or from the institutions, markets or the clearing and settlements mechanisms that link them."
In the past, central banks have often rushed in to help a faltering institution or ease a financial crisis.
But the report said it will be more difficult in the future for central banks to help on an ad hoc basis. It would be better, it said, "to establish policies and procedures to prevent and contain crises."
The report urged leading financial institutions to shoulder much of the burden of guarding against these threats.
"The buck really stops with particular firms to make certain that the controls are in place," said Lord Alexander, chairman of Britain's NatWest Group and co-chairman of the panel that conducted the study.
The group surveyed 66 major financial businesses, ranging from Generale Banque of Belgium and Banque Indosuez of France to Chase Manhattan, Goldman Sachs and Metropolitan Life in the United States.
The report also called for independent global audits of major companies and urged banking and other government regulators to co-ordinate their work across national borders. Accounting standards, for example, vary so widely around the globe that businesses and consumers have a difficult time judging some companies' financial conditions.
The report was spurred by the tremendous changes under way in the world financial system.
Banks, brokerages and insurance companies are expanding rapidly to far-flung corners of the world. Securities trading and currency swapping, once limited to certain hours in key capitals, can now occur around the clock worldwide.
"This is a new world in which we are operating," said John Heimann, a former U.S. banking regulator and now chairman of global financial institutions at Merrill Lynch.
To:mikesloan who wrote (458)
From: John Barendrecht Friday, Jul 11, 1997 10:43 PM
Respond to of 80072
Italy's quest for EMU comes at price of low growth
By Andrew Hurst
MILAN, July 11 (Reuter) - Italy's economy shows muted signs of recovery after a long spell in the doldrums but Italians are starting to count the cost of the government's quest to join European currency union.
Despite data showing a surge in industrial orders in April, few believe the economy will come within spitting distance of the government's official 1997 growth target of 1.2 percent.
Weighing on industry and employment has been an unprecedented increase over the past year in the tax burden -- the price Prime Minister Romano Prodi says Italy has to pay for mismanaging its public finances in the past.
The fiscal squeeze has prompted warnings from the Bank of Italy's austere governor Antonio Fazio that high taxes are stifling an economic recovery.
``What is putting a brake on investments is the excessive tax burden and excessive regulation above all of labour,'' Fazio said earlier this week.
Business leaders have said they are sceptical of government claims that the first green shoots of recovery are starting to sprout.
``There has not been a strong upturn in the economy,'' said Giorgio Fossa, head of industry association Confindustria.
Prodi has said the clamour for lower taxes is not falling on deaf ears but he believes that it is too soon to act.
``I am not deaf to pleas for fiscal cuts,'' he said on Friday, adding, ``the reduction of the tax burden must come entirely from (cutting) the size of the cost of public debt.''
A Reuter survey of 18 economists published on July 10 showed a consensus forecast of 0.9 percent growth in gross domestic product (GDP) in 1997, rising to two percent next year, with some predicting the economy will expand by just 0.5 percent.
A government scheme to boost car sales has breathed life into the economy but analysts fear the upswing could lose momentum if incentives are phased out later this year.
Most analysts believe that despite sluggish growth Italy will succeed in bringing the ratio of the public sector deficit to GDP down to three percent -- a target it must meet to be sure of qualifying for membership of European monetary union.
``We think the three percent target will be reached. The political will is so strong that it's no longer a question of how fast the economy is growing,'' said Maria Rosa Trolese, economist at Deutsche Bank in Milan.
Joining EMU at all costs has been the rationale behind the centre-left government's efforts to slash some 100 trillion lire ($58.5 billion) off the public deficit since it took office after elections in April last year.
Membership of EMU is seen as delivering the best escape route, in the form of lower interest rates, for the government's biggest headache -- a huge national debt mountain.
The fiscal straightjacket imposed on the economy has come at a higher cost than need have been necessary, economists say, because the government has resorted to a number of one-off measures, notably a notorious 5.5 trillion lire ``Euro-tax.''
The Bank of Italy's Fazio has brought down interest rates very slowly -- the latest move was a half percentage point cut to 6.25 percent at the end of June -- partly over concern that the government has done too little to cut spending.
``The cautiousness with which Fazio is cutting interest rates is a reflection of the fact he does not find the government's tax policy entirely credible,'' said a London-based economist with an international investment bank.
http://www.siliconinvestor.com/stocktalk/msg.gsp?msgid=1747675
To:Bill Jackson who wrote (467)
From: John Barendrecht Friday, Jul 11, 1997 10:37 PM
Respond to of 80072
Istanbul gold volume leaps, prices mixed
ISTANBUL, July 11 (Reuter) - Traded volume on the Istanbul gold exchange jumped to 1,562 kilos on Friday, after just 464 kilos on Thursday as demand responded to what were seen as low prices, dealers said.
Gold closed sligthly easier in dollar terms at $320.30 an ounce, from Thursday's $321.50, but edged higher in lira terms to 1,563,800 lira per gram, versus the previous 1,561,000 as the Turkish currency fell against the dollar.
``The market expects an upturn in prices in the short term, so these prices seemed attractive, encouraging buying from free market traders,'' one dealer said.
The Turkish currency closed easier at around 151,300 lira to the dollar on the free market, from around 151,000 on Thursday.
Of the day's trade, 762 kilos took place in the morning session and 800 kilos in the afternoon, 60.3 percent of total trade being conducted in lira terms.
To:John Barendrecht who wrote (469)
From: John Barendrecht Friday, Jul 11, 1997 10:39 PM
Respond to of 80072
Consumers may seek palladium substitutes
FRANKFURT, July 11 (Reuter) - Industrial consumers of platinum group metals, especially palladium, may consider alternative materials following extended interruptions to Russian exports, Dresdner Kleinwort Benson said in a market report.
Consumers might wish to lessen their dependence on an exporter that accounts for 60 percent of world palladium production.
Palladium prices crumbled to two-month lows on Thursday and platinum also eased on news Russian exports to Japan had resumed, but both bounced back on Friday.
Three tonnes of palladium had been delivered to Japan, the bank noted.
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