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Murphy address to GATA African Gold Summit in Durban

Section: Daily Dispatches

Metals stock indexes rally;
gold's technicals attract bank buyers

By Myra P. Saefong
May 9, 2001

NEW YORK (CBS.MW) -- The benchmark indexes for metals-
related stocks rallied to their highest level in nearly
a year Wednesday as gold prices broke above $269 an
ounce for the first time in two months.

Charles Nedoss, a gold analyst at Chicago brokerage
house attributed gold's price rise to
technical moves by traders following a break above the
futures' price trading range over the last several

Gold quot;tested its upper boundary,quot; prompting investors
to buy into the market, he said. quot;Banks have been the
best buyers on the day.quot;

quot;Gold and gold stocks have been signaling a higher move
and it was just a matter of time, sooner than later,
that it would make a move,quot; John Mesrobian, president
of Williamsburg, Va.-based Constantinople Advisors,

Wednesday's move was based on several issues, including
concerns over the U.S. dollar, which is about to
decline in value because the Fed is flooding the market
with it, Mesrobian said. Gold is now quot;moving up to its
real true value amid concerns about the equity
markets,quot; he said.

The CBOE Gold Index rose by 7.5 percent to 40.66, and
the Philadelphia Gold and Silver Index climbed by 6.6
percent to 59.17. Both indexes touched highs that
haven't been seen since June of last year.

Among the indexes, shares of Newmont Mining tacked on
$1.96 to close at $20.73 and shares of Placer Dome Gold
climbed 65 cents to settle at $11.03.

Gold futures prices climbed Wednesday, following a
break above their recent trading range between $264 and
$268 an ounce.

Gold for June delivery rose by $4.90 to close at
$270.40 on the New York Commodities Exchange. Silver
for July delivery rose 8 cents to $4.36 an ounce.

Nedoss said there weren't any fundamental reasons for
the gold buying, although traders are looking toward
the Bank of England's gold auction on May 15.

On the supply end, Comex gold inventories were
unchanged at 839,625 ounces by late Tuesday vs. the
previous session and silver stocks were also flat at
96,367,534 ounces.

Meanwhile, June palladium gained $3.90 to $674 an
ounce, while July platinum added $6.90 to $611.70 an

The July contract for copper, an industrial metal,
declined by 0.5 cent to 76.35 cents a pound as Comex
inventories climbed by 991 short tons to 128,764 tons
by late Tuesday. Supplies at the London Metals Exchange
were down 925 to 444,775 metric tons as of early

In related metals news, the Gold Anti-Trust Action
Committee (GATA), based in Texas, is expected to attend
a conference in South Africa Thursday to air its belief
that the U.S. and German governments as well as bullion
banks, have been suppressing gold's price.

GATA has been alleging Fed manipulation in the gold
market for years, David Meger, a senior gold analyst at in Chicago, said. quot;It is hard to prove the
Fed ... is working in conjunction with large trade
houses to manipulate gold prices,quot; he said, noting that
he can't fault someone for quot;attempting to find out for
sure that nothing fishy is going on.quot;