Gold to breach $330

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    Gold tipped to breach $330

    By: David McKay

    Posted: 2002/06/13 Thu 13:59

    JOHANNESBURG – Gold will test $330 per ounce again before long. Premonitions of gold's utlimate appreciation are not new to the market but the difference lately is that international analysts and fund managers of a variety of denominations appear to agree. Well-known gold bulls, such as Paul van Eeden, have been joined by cooler-blooded market commentators such as Deutsche Bank and Allan Gray, a South African fund manager which believe gold's retreat is a hiatus. On the technical side, Kobus Kotze of SCMB Securities, a South African broker, says that despite signals of short-term technical weakness, the long-term upside target is $340 per ounce.
    "The long-term gold price is still bullish with medium-term support at $317 followed by further resistance at $309. Only when $309 is breached on the downside does the bull trend change to a bear trend," Kotze said. While short-term prospects might appear sluggish, Kotze says his long-term upside target remains $340 per ounce should the gold price stay above $317. The gold price was last trading at $317.95 per ounce.

    Paul van Eeden, an analyst for US firm, Global Resources, says the future of gold is firmly hitched to the fortunes of the dollar. He does not see the dollar continuing to strengthen and therefore gold remains firmly in a bull market. "The inverse correlation between the US dollar and the price of gold is not just psychological, it is fundamental just like the price of all other imports," he said

    "As the dollar weakened, the price of gold in US dollars increased and the recent correction in the price of gold is due to the temporary support for the dollar based on Japan's intervention in foreign currency markets," he says. He believes, however, that the dollar will continue to weaken, a development related to worsening economic problems in the US.

    "Because of this I do not expect the dollar to halt its decline relative to other currencies and thus I believe that the gold price is still firmly in a bull market," he says.

    The speculative net long position in the Comex gold market fell by 9.2 percent from its highest level in seven years in the last week of May due to a 19.2 percent increase in short positions, Deutsche Bank said in a recent report. "However, more recent action suggests that the net-long has increased again and $330 per ounce is a very real target on the upside," the bank said.

    There are dissenting voices. Nick Goodwin, an analyst at SG Securities in Johannesburg, suggests that gold may try to breach $330 per ounce but it will be its last charge before a meltdown. "If you don't sell know you're going to pick up trouble," he said in a Miningweb report earlier this week. In the first week of June, there was an 8.2 percent fall in short positions which outweighed a 2.9 percent decline in the longs. There may have been another reduction in long positions as the gold price remained static.

    Stephen Mildenhall, chief investment officer for Allan Gray, a highly-rated South Africa unit trust manager, said the surge in gold equities earlier this week after being quiet for several weeks was a typical pull-back of a bull market. "I think you do see these violent pull-backs in a bull market and I think what one is seeing here is probably quite a long-term bull market in gold," he said. Mildenhall also saw further upside for South African gold equities: "I think if one has a bullish outlook for the dollar gold price, which I think we would tend to have, then I think that some of these gold shares are still very attractive," he added.

    S. Africa gold equities on roller-coaster
    Gold stocks on the Johannesburg Stock Exchange, however, continued to bounce around retracing some of Wednesday's impressive gains. The gold index was 7.8 percent weaker at midday with Gold Fields shedding 12.8 percent after gaining more than 20 percent the previous day. AngloGold was 4.28 percent weaker, Durban Roodepoort Deep and Harmony Gold were 7.78 percent and 9.54 percent weaker respectively. South Africa's gold index gained 14 percent on Wednesday.

    Comment on Gold tipped to breach $330
    Date 2002/06/13 Thu

    Name Bill Murphy
    Email Address [email protected]
    Subject The real gold story - wake up gold world

    A GATA SPECIAL: All the gold world will agree that gold producers cut back on their forward sales programs in the first quarter. That is an established fact. Therefore, the gold derivatives on the books of the bullion banks should have contracted also. After all, why else are they on the books of the bullion banks?

    But, LO AND BEHOLD, they went up sharply at J.P. Morgan Chase and Citibank:

    OCC Q1 2002 Derivative report

    Gold derivatives increased in Q1 2002.

    Total Gold Derivatives Q4 2001 $63.413 billions
    Total Gold Derivatives Q1 2002 $71.174 billions

    12.24% increase in the quarter....

    JPM Q4 2001 $41.049 billions
    JPM Q1 2002 $45.234 billions

    10.20% increase in the quarter......

    Citibank Q4 2001 $7.843 billions
    Citibank Q1 2002 $11.246 billions

    43.39% increase in the quarter......

    Other 372 banks Q4 2001 $14.521 billions
    Other 372 banks Q1 2002 $14.694 billions

    1.19% increase in the quarter......


    There can be only one explanation here for the sharp rise in the gold derivative positions at J.P. Morgan Chase and Citibank. They went UP because their gold rigging operations were increased to try and counter the forward sale buy-backs.

    Note how the gold derivatives went up substantially at Morgan and Chase, but only 1.19% at the other 372 banks, which probably includes some gold price-fixing operations at other bullion banks.

    Once more the GATA ARMY comes up with evidence of price-rigging operations and the leaders of the gold industry remain SILENT SAMS!

    You might like to know the gold rigging banks have two different gold operations. One is a trading desk for the gold producers. The other is a hush-hush operation linked to the Exchange Stabilization Fund and probably the Fed. That is why some of the gold traders at the bullion banks are not privy to the gold price-fixing operations.

    One scandal after another is hitting Wall Street, yet few are willing to talk about the biggest scandal of all that has hurt so many people in so many countries, that being the gold scandal. A distinguished man in the gold world told me today that he had an interview set up with CNBC for me until they heard I was a GATA man. It was immediately cancelled, saying that our story was BENEATH THEM!!!!

    This is the same crowd that extolled the ?New Economic Era? and lauded the NASDOG superstars at the top; the same crowd that chastised David Tice for his expose of Tyco years ago. I need say no more. Who needs them anyway!

    Just in from a Café member on the increased gold derivatives which confirms my line of analysis:

    These gold derivatives are a gold loan book according to a reliable source. This means that JPM has loaned 10s of billions of dollars worth of gold with varying that could only have come from one of two places, The US Treasury or the vaults of the G-10.

    The BIS numbers are out as well and they too reveal a big increase in gold derivatives from $203 Billion to $231 Billion. This is because the "Loans" that constitute the derivatives are not being paid back. These derivative loans are being carried as "Receivables". Moreover they keep growing as a big problem for the US and the G-10.

    The FASB and GAAP rules are being stretched beyond limits to define an irretrievable gold loan as a "Receivable" [Irretrievable at the original loan price, not to mention getting the metal at ANY price given the huge supply deficits].

    The dynamic is not one of supply and demand so much as one of regulatory discovery. The cabal's golden shell game is increasingly visible to the world thanks to GATA, Reg Howe and many others. In the Enron debacle it was the ratings agencies that pulled the plug. One minute Enron was a darling; the next they were felons.

    It will be this way when the IMF accountants, Moody's or another whistle blower pulls the plug on the gold loan scam. It could happen tomorrow...or next year. The IMF guys already know what JPM is doing is wrong and said so in their 1999 Santiago Chile meeting on the subject of IMF accountancy. With all the heat on Argentina they are under a hot light these days.

    See... the cabal needs to continue to loan [To then be sold] their gold treasuries in order to suppress the price of gold. As the demand keeps rising their treasury gold stocks keep dwindling. They are bleeding badly.

    The Japanese alone can smash them with huge gold demands and will smash them
    as soon as the yen starts falling once again.


    Pour it on the bums, GATA ARMY!

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