Bloomberg''s weekly gold market survey quotes GATA consultant Turk

Gold May Rise on China Purchases,
Investor Demand, Survey Shows

By Claudia Carpenter
Bloomberg News Service
Monday, March 6, 2006

a href=http://www.bloomberg.com/apps/news?http://www.bloomberg.com/apps/news?/a
pid=10001013amp;sid=adq_36emEHcQamp;refer=commodity_futures

Gold may rise for a third straight week and approach a 25-year high
on speculation investors in China will increase purchases, a
Bloomberg News survey shows.

Twenty-one of 37 traders, investors and analysts surveyed from
Melbourne to New York on March 2 and March 3 advised buying gold,
which rose 1.2 percent last week to $568 an ounce on the Comex
division of the New York Mercantile Exchange. Eight recommended
selling the metal and eight were neutral.

Purchases in China rose 20 percent last year, helping to elevate the
country to the third-largest buyer of all kinds of gold after India
and the U.S., London-based researcher GFMS Ltd. estimates. The Bank
of China today will ease restrictions on trading in Shanghai and
plans to allow buying and selling of gold using dollars, the state-
run China Daily said last week.

quot;We continue to see very good demand out of developing economies in
India and China, and Middle East demand is very strong,quot; Wayne
Murdy, chief executive officer of Denver-based Newmont Mining Corp.,
the world's biggest gold producer last year, said in a Feb. 27
interview. quot;Forces are in place that will continue to provide a
strong gold market.quot;

Gold for April delivery rose $6.80 an ounce last week, and prices
were up 32 percent in the past year. The increase was expected by
the majority of analysts surveyed Feb. 23 and Feb. 24. Bloomberg's
weekly survey has forecast the direction of prices accurately in 58
of 97 weeks, or 60 percent of the time.

After reaching a 25-year high of $579.50 on Feb. 2, gold dropped 2
percent last month, the biggest decline since May 2005. Prices have
gained 2.6 percent the past three weeks. The renewed rally prompted
Jim Pogoda, an individual investor in Summit, New Jersey, to start
buying gold last week for the first time in quot;several months at
least,quot; he said.

Some investors are still concerned about high energy prices and
inflation, which boosts the appeal of gold as a hedge, Pogoda
said. quot;Any strength in oil prices should be helpful to gold,quot; he
said. Oil prices may rise this week amid supply disruptions in
Nigeria and the threat of lower output from Iran, a separate
Bloomberg News survey showed last week.

Hedge funds and other large speculators held net-long positions, or
bets prices will rise, totaling 127,370 Comex gold contracts as of
Feb. 28, up from 118,684 on Feb. 21, the U.S. Commodity Futures
Trading Commission said after trading March 3. It was the first
increase in six weeks.

The Bank of China today will reduce the trading spread on gold --
the difference between buying and selling prices -- by up to 20
percent through May 27, China Daily said on its Web site March 1.
The change quot;could encourage some buying,quot; said William O'Neill, a
partner at commodity research company Logic Advisors LLC in Upper
Saddle River, New Jersey.

quot;Any movement to facilitate the trading of gold, especially in U.S.
dollars, coupled with a reduction in trading costs is bullish,quot; said
Frank McGhee, head gold trader at Integrated Brokerage Services LLC
in Chicago.

China's gold investment demand rose to 11.7 tons last year from 9.8
tons in 2004, according to GFMS figures released by the World Gold
Council on Feb. 22. Most of China's demand is for jewelry. Global
investor demand rose 15 percent to 396.2 tons, according to GFMS.

quot;The Chinese understand that gold is money,quot; said James Turk, who
runs GoldMoney.com, which allows people to make purchases in gold
rather than in currencies. quot;It is understandable they would
therefore ease the restrictions on gold as part of their dismantling
of exchange controls. The implications for the gold market are of
course bullish.quot;

A reduction in the government's allowable trading spread for gold in
China quot;will encourage people to trade more aggressivelyquot; in the over-
the-counter market, said Gordon Cheung, director of precious metals
at Mitsui Bussan Precious Metals (HK) Ltd., in Hong Kong.

China's investor demand is quot;growing but the amount is still
negligible in the larger scheme of things,quot; said Prithviraj Kothari,
director at Mumbai-based Riddhi Siddhi Bullion Ltd. The Bank of
China's new policy probably won't make much difference to overall
global demand, he said.

Gold prices typically fall between now and May, on slowing seasonal
demand from jewelers, the biggest use of the metal, Newmont's Murdy
said. That prices haven't fallen is quot;very unusual,quot; he said.

Investment demand quot;has been stronger and more long-lived than I'd
expected,quot; GFMS Executive Chairman Philip Klapwijk said. With prices
over $550, quot;there is a heck of a lot of scrap flowing back into the
market,quot; he said.

Some investors also are looking to gold and other commodities for
better returns than stocks and bonds. Gold's 18 percent gain last
year outperformed the 3 percent rise in the Standard amp; Poor's 500
Index of stocks and a 2.8 percent return on the benchmark 10-year
U.S. Treasury, according to Merrill Lynch amp; Co. index data.

Gold has gained 9.5 percent this year, compared with the Standard amp;
Poor's 3.1 percent gain. Holders of 10-year Treasury notes have lost
about 0.5 percent this year.

Gold may rise this week as investors sell stocks and put their money
in gold, said Wolfgang Wrzesniok-Rossbach, head of marketing and
sales at Heraeus Metallhandels GmbH, a precious metals company in
Hanau, Germany. There is a quot;rising likelihood for massive profit-
taking in equities,quot; he said.

Bloomberg's gold survey asked if prices are more likely to fall,
rise, or be little changed in the coming week. The results were:

RISE ..... FALL .......NEUTRAL
21 ........ 8 .......... 8

----------------------------------------------------

To subscribe to GATA's dispatches, send an e-mail to:

gata-subscribe@yahoogroups.com

To unsubscribe, send an e-mail to:

gata-unsubscribe@yahoogroups.com

----------------------------------------------------

RECOMMENDED INTERNET SITES
FOR DAILY MONITORING OF GOLD
AND PRECIOUS METALS
NEWS AND ANALYSIS

Free sites:

a href=http://www.jsmineset.comhttp://www.jsmineset.com/a

a href=http://www.cbs.marketwatch.comhttp://www.cbs.marketwatch.com/a

a href=http://www.mineweb.com/http://www.mineweb.com//a

a href=http://www.gold-eagle.com/http://www.gold-eagle.com//a

a href=http://www.kitco.com/http://www.kitco.com//a

a href=http://www.usagold.com/http://www.usagold.com//a

a href=http://www.usagold.com/amk/usagoldmarketupdate.htmlhttp://www.usagold.co...

a href=http://www.GoldSeek.com/http://www.GoldSeek.com//a

a href=http://www.GoldReview.com/http://www.GoldReview.com//a

a href=http://www.capitalupdates.com/http://www.capitalupdates.com//a

a href=http://www.DailyReckoning.comhttp://www.DailyReckoning.com/a

a href=http://www.goldenbar.com/http://www.goldenbar.com//a

a href=http://www.silver-investor.comhttp://www.silver-investor.com/a

a href=http://www.thebulliondesk.com/http://www.thebulliondesk.com//a

a href=http://www.sharelynx.com/http://www.sharelynx.com//a

a href=http://www.mininglife.com/http://www.mininglife.com//a

a href=http://www.financialsense.comhttp://www.financialsense.com/a

a href=http://www.goldensextant.comhttp://www.goldensextant.com/a

a href=http://www.goldismoney.info/index.htmlhttp://www.goldismoney.info/index....

a href=http://www.howestreet.comhttp://www.howestreet.com/a

a href=http://www.depression2.tvhttp://www.depression2.tv/a

a href=http://www.moneyfiles.org/http://www.moneyfiles.org//a

a href=http://www.howestreet.comhttp://www.howestreet.com/a

a href=http://www.minersmanual.com/minernews.htmlhttp://www.minersmanual.com/mi...

a href=http://www.a1-guide-to-gold-investments.com/euro-vs-dollar.htmlhttp://ww...

a href=http://www.goldcolony.comhttp://www.goldcolony.com/a

a href=http://www.miningstocks.comhttp://www.miningstocks.com/a

a href=http://www.mineralstox.comhttp://www.mineralstox.com/a

a href=http://www.freemarketnews.comhttp://www.freemarketnews.com/a

a href=http://www.321gold.comhttp://www.321gold.com/a

a href=http://www.SilverSeek.comhttp://www.SilverSeek.com/a

a href=http://www.investmentrarities.comhttp://www.investmentrarities.com/a

a href=http://www.kereport.comhttp://www.kereport.com/a
(Korelin Business Report -- audio)

a href=http://www.plata.com.mx/plata/home.htmhttp://www.plata.com.mx/plata/home...
(In Spanish)
a href=http://www.plata.com.mx/plata/plata/english.htmhttp://www.plata.com.mx/p...
(In English)

a href=http://www.resourceinvestor.comhttp://www.resourceinvestor.com/a

a href=http://www.miningmx.comhttp://www.miningmx.com/a

a href=http://www.prudentbear.comhttp://www.prudentbear.com/a

a href=http://www.dollarcollapse.comhttp://www.dollarcollapse.com/a

a href=http://www.kitcocasey.comhttp://www.kitcocasey.com/a

a href=http://000999.forumactif.com/http://000999.forumactif.com//a

a href=http://www.golddrivers.com/http://www.golddrivers.com//a

a href=http://www.goldpennystocks.com/http://www.goldpennystocks.com//a

a href=http://www.oroyfinanzas.com/http://www.oroyfinanzas.com//a

Subscription sites:

a href=http://www.lemetropolecafe.com/http://www.lemetropolecafe.com//a

a href=http://www.goldinsider.com/http://www.goldinsider.com//a

a href=http://www.hsletter.comhttp://www.hsletter.com/a

a href=http://www.interventionalanalysis.comhttp://www.interventionalanalysis.c...

a href=http://www.investmentindicators.com/http://www.investmentindicators.com//a

Eagle Ranch discussion site:

a href=http://os2eagle.net/checksum.htmhttp://os2eagle.net/checksum.htm/a

Ted Butler silver commentary archive:

a href=http://www.investmentrarities.com/http://www.investmentrarities.com//a

----------------------------------------------------

COIN AND PRECIOUS METALS DEALERS
WHO HAVE SUPPORTED GATA
AND BEEN RECOMMENDED
BY OUR MEMBERS

Blanchard amp; Co. Inc.
909 Poydras St., Suite 1900
New Orleans, Louisiana 70112
888-413-4653
a href=http://www.blanchardonline.comhttp://www.blanchardonline.com/a

Centennial Precious Metals
Box 460009
Denver, Colorado 80246-0009
1-800-869-5115
a href=http://www.USAGOLD.comhttp://www.USAGOLD.com/a
Michael Kosares, Proprietor
cpm@usagold.com

Colorado Gold
222 South 5th St.
Montrose, Colorado 81401
a href=http://www.ColoradoGold.comhttp://www.ColoradoGold.com/a
Don Stott, Proprietor
1-888-786-8822
Gold@gwe.net

El Dorado Discount Gold
Box 11296
Glendale, Arizona 85316
a href=http://www.eldoradogold.nethttp://www.eldoradogold.net/a
Harvey Gordin, President
Office: 623-434-3322
Mobile: 602-228-8203
harvey@eldoradogold.net

Gold amp; Silver Investments Ltd.
Mespil House
37 Adelaide Rd
Dublin 2
Ireland
#43;353 1 2315260/6
Fax: #43;353 1 2315202
a href=http://www.goldinvestments.orghttp://www.goldinvestments.org/a
info@gold.ie

Investment Rarities Inc.
7850 Metro Parkway
Minneapolis, Minnesota 55425
a href=http://www.gloomdoom.comhttp://www.gloomdoom.com/a
Greg Westgaard, Sales Manager
1-800-328-1860, Ext. 8889
gwestgaard@investmentrarities.com

Kitco
178 West Service Road
Champlain, N.Y. 12919
Toll Free:1-877-775-4826
Fax: 518-298-3457
and
620 Cathcart, Suite 900
Montreal, Quebec H3B 1M1
Canada
Toll-free:1-800-363-7053
Fax: 514-875-6484
a href=http://www.kitco.comhttp://www.kitco.com/a

Lee Certified Coins
P.O. Box 1045
454 Daniel Webster Highway
Merrimack, New Hampshire 03054
a href=http://www.certifiedcoins.comhttp://www.certifiedcoins.com/a
Ed Lee, Proprietor
1-800-835-6000
leecoins@aol.com

Lone Star Silver Exchange
1702 S. Highway 121
Suite 607-111
Lewisville, Texas 75067
214-632-8869
a href=http://www.discountsilverclub.comhttp://www.discountsilverclub.com/a

MRCS CANADA
12303-118 Ave. NW
Edmonton, Alberta T5L 2K2
Canada
a href=http://www.mrcscanada.comhttp://www.mrcscanada.com/a
Michael Riedel, Proprietor
1-877-TRY-MRCS
1-877-879-6727
mrcscanada@shaw.ca

Miles Franklin Ltd.
3015 Ottawa Ave. South
St. Louis Park, Minn. 55416
1-800-822-8080 / 952-929-1129
fax: 952-925-0143
a href=http://www.milesfranklin.comhttp://www.milesfranklin.com/a
Contacts: David Schectman,
Andy Schectman, and Bob Sichel

Missouri Coin Co.
11742 Manchester Road
St. Louis, MO 63131-4614
info@mocoin.com
314-965-9797
1-800-280-9797
a href=http://www.mocoin.comhttp://www.mocoin.com/a

Resource Consultants Inc.
6139 South Rural Road
Suite 103
Tempe, Arizona 85283-2929
Pat Gorman, Proprietor
1-800-494-4149, 480-820-5877
Metalguys@aol.com
a href=http://www.buysilvernow.comhttp://www.buysilvernow.com/a

Swiss America Trading Corp.
15018 North Tatum Blvd.
Phoenix, Arizona 85032
a href=http://www.swissamerica.comhttp://www.swissamerica.com/a
Dr. Fred I. Goldstein, Senior Broker
1-800-BUY-COIN
FiGoldstein@swissamerica.com

The Moneychanger
Box 178
Westpoint, Tennessee 38486
a href=http://www.the-moneychanger.comhttp://www.the-moneychanger.com/a
Franklin Sanders
1-888-218-9226, 931-766-6066

----------------------------------------------------

HOW TO HELP GATA

If you benefit from GATA's dispatches, please
consider making a financial contribution to
GATA. We welcome contributions as follows.

By check:

Gold Anti-Trust Action Committee Inc.
c/o Chris Powell, Secretary/Treasurer
7 Villa Louisa Road
Manchester, CT 06043-7541
USA

By credit card (MasterCard, Visa, and
Discover) over the Internet:

a href=http://www.gata.org/creditcard.htmlhttp://www.gata.org/creditcard.html/a

By GoldMoney:

a href=http://www.GoldMoney.comhttp://www.GoldMoney.com/a
Gold Anti-Trust Action Committee Inc.
Holding number 50-08-58-L

Donors of $200 or more will receive copies
of quot;The ABCs of Gold Investingquot; by Michael
Kosares, proprietor of Centennial Precious
Metals in Denver, Colorado, and quot;The Coming
Collapse of the Dollarquot; by James Turk and
John Rubino.

GATA is a civil rights and educational
organization under the U.S. Internal Revenue
Code and contributions to it are tax-deductible
in the United States.