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Demand for gold coins rises dramatically

Section: Daily Dispatches


By Bill Murphy
September 20, 2001

What a great speech tonight by President Bush!

I received a call from Europe this morning from someone
involved in the gold physical market. If you want to
buy 100 ounces of gold, the price is $300 to $303. The
spreads between bid and asked were $20 yesterday, $12
today. The disconnect between the physical market and
the paper market has begun. And there is no silver of
any size for sale at all in Europe.

* From Cafe member Pete S:

quot;Went to a local coin shop yesterday for some eagles
and learned that the random-dated ones (slightly
cheaper) are not available for immediate shipment and
are backordered for two- or three-week delivery. The
2001 issue is still available but the premium over spot
has climbed to more than $20/oz versus about $12 a few
weeks ago.quot;

* Great news for Newmont Mining.

Newmont Climbing Higher Following Upgrade

quot; Newmont Mining Corp. (NEM)
gapped down slightly this morning but has moved sharply
higher. The stock is now up 0.44 at 23.24 on average
volume. Newmont has been climbing higher for the last 2
weeks and is trading at nearly a 4-month high. The
stock was upgraded today by Goldman Sachs from a
'market perform' to a 'market outperform.'

Goldman Sachs? On the same day a super-gold bear
(below) turns super-bullish? The day after Robert Rubin
was in Washington meeting with Congress?

* From John Brimelow:

On the one hand, all the signs are acummulating that
sophisticated GATA-orientated pessimists would
expect: higher lease rates have been met with
lending, quot;excellent selling ... located around $294-
5quot; in Standard London's words, MarketVane's Bullish
Consensus up to a creepy 82 percent, indicating a
frustrated speculator community,

quot;There seems to be a cap around the $294-5 area,quot; as
Mitsui-Sydney puts it, and of course Comex volumes
are up strongly, especially when the abbreviated
session is factored in.

On the other hand, physical demand in a number of
sometimes quite surprising markets (such as Europe)
continues strong -- quot;healthy more or less
everywhere,quot; the WGC report says. Macro events could
hardly be more supportive (one hopes!), the gold
share indices keep creeping up even on gold down
days, and we have the significant if astonishing
event of a well-known gold bear turning mega bullish.
quot;This is the big one.quot; quot;Environment like the '60s and
70s.quot; quot;Close your eyes; buy gold.quot;

The fact is that this bear has been at least as good
as anyone else in the past decade at forecasting gold
prices, and he is clearly a great deal brighter than
most in the field. At the very least, if gold does
not rise, a new explanation should be forthcoming.

In all the confusion, few have noticed the Pasminco
bankruptcy in Australia. A major event, it appears
this world-class zinc producer, which should have
been protected from low zinc prices by the weak A$,
was instead ruined by excessively clever currency
hedging. A direct blow to the perpetrators, and a
caution to producers. Bullion dealers report that few
Australian gold miners are hedging into this close to
record A$ gold price, in part due to credit