Five SUPPORT INITIATIVES and one VIEWPOINT

Section:

9 March 1999

GATA Members,

Gold has been up four days in a row, to a spot price of $292 today.

Go GATA, Go Gold!

$325 by Easter? Judging from Midas du Metropole this evening Why not?

For those of you who are not yet members at Le Metropole Cafe
(www.lemetropolecafe.com), or on a fortnight free trial there, here is a
teaser from Midas' offering at the James Joyce Table an hour or two ago:

We could easily get a first strike move to $340 in the months to come
and then reach our $405 objective by year end. . .

A fierce battle is on. . . all those gold borrowers at the $290 level
over the past two months are now underwater just a tad. While the battle
for control of $290 was won by us in the short term, they will not give
up the ghost without a further, fanatical fight. The trading volume on
Comex today was a very heavy 110,00 contracts versus the 1999 daily
average of 35,492 contracts. . .

. . . The big surprise of the day was that the open interest yesterday
went up 1741 contracts to a new recent high of 196,105 contracts. Most
observers were looking for a big drop in the open interest as a result
of spec short covering. The open interest increase is very good news. It
means new longs have entered the long side. It also means the gold
borrowing shorts are having to get shorter to try and keep the gold
price from rallying too far, too fast.

The gold game is just that right now- a game. We told you that Goldman
Sachs was a big buyer last week. Was the market starting to get away
from them as they have so much more buying to do? So they sat on it
today, hoping to draw in more sellers? Based on analyst comments after
the close, it worked as most all were immediately bearish. The intrigue
grows. . . The fact that the price of gold sold off $2 from its high
today is just an example of how intense this struggle over the gold
price is going to be. It is one we think the shorts are going to lose
and lose big. They already lost the battle of $290 . . . Soon, they will
lose the war and their effort to keep gold off the radar screen for the
investment world. We could easily get a first strike move to $340 in the
months to come and then reach our $405 objective by year end.

Goldman Sachs has been running around the world telling their clients
how bearish the gold market is for some time now. They have been
encouraging forward sales by producers and I would love to take a look
at their own gold borrowing book. Any one want to guess on how many gold
loans they took out at .7% to 1.5% for themselves or for clients? Until
very recently, they had been big sellers for many, many months. . .
They are in a bind. They have everyone short. They want out of the rest
of their own shorts. They know the gold market is explosive now. So what
to do? . . .

NOTICE:
The above is a SHORT EXTRACT from what Bill Murphy, GATA Chairman,
writing as Midas, has shared with members at Le Metropole Cafe
(www.lemetropolecafe.com) this evening March 9. Any comments about any
gold and silver shares by Midas or at the GATA Forum are for your
information and entertainment only. They should not be regarded as
advice.

Boudewijn Wegerif -- "GO GATA"
Moderator GATA Forum

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