Many ways to own gold, or at least to think you do!


11:59p ET Monday, May 6, 2002

Dear Friend of GATA and Gold:

Last week GATA Chairman Bill Murphy told his
subscribers at, in a
dispatch shared with GATA supporters, that
Barrick Gold had many agents in South Africa
seeking to arrange the acquisition of AngloGold.
Tonight TheMiningWeb's Tim Wood reports on
indications that a merger of Barrick, AngloGold,
and Gold Fields is in the works.

Any such combination would seem to be almost
the proclamation of the surrender of the hedgers,
and one would think that it would have to move
the gold market far beyond the shares of the
companies involved. It has been said that the
gradual closing of producer hedges is putting
a floor under the gold price. Barrick's scramble
for unhedged gold might attach rockets to the

Just this morning GATA's friend Doug Pollitt
of Pollitt & Co. in Toronto was quoted by
CBSMarketWatch's Thom Calandra as
estimating Barrick's short position as 23 million
ounces and asserting that Barrick couldn't cover
that position if it wanted to. Any bid for unhedged
gold in South Africa on the scale being discussed
is bound to be perceived as a frantic bid to cover.
And if the king of the hedgers is covering, who will
be left to hedge?

Murphy has been writing about Barrick's short
position for two years. For about the same time
he has been predicting that eventually one of the
big shorts would defect and rush for the exit, and
soon the gold carry trade would come apart. Last
week Murphy told us that Barrick was preparing to
do just this. If it comes to pass, he and GATA may
take it as more than a little vindication.

You can read TheMiningWeb story about Barrick
on TheMiningWeb's home page, under the headline,
"Gold Fields raid talk persists," here:

CHRIS POWELL, Secretary/Treasurer