Gold soon will break out in all currencies, Turk writes

9:15a ET Sunday, September 7, 2003

Dear Friend of GATA and Gold:

The business section of Sunday's New York Times has
taken note of the stirrings in the gold equities
markets with a report titled quot;From Canada, New Roads
to Gold.quot; The Times report is appended here.

It may be hard to understand how the analyst from
CIBC World Markets in Toronto who is quoted here can
dismiss Minefinders and Wheaton River as
quot;underperformersquot; when their share prices are up
about 82 and 180 percent, respectively, over the last
year, but then you can't believe everything you read
in newspapers, including even The New York Times.

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

* * *

From Canada, New Roads to Gold

By Bernard Simon
The New York Times
Sunday, September 7, 2003

a href=http://www.nytimes.com/2003/09/07/business/yourmoney/07GOLD.htmlhttp://w...

TORONTO -- Sensing a renewed appetite among Americans,
a small army of foreigners is invading the United States with
new kinds of gold investments.

Ten small and midsized Canadian gold producers have been
listed on the American Stock Exchange in the last year. The
World Gold Council, a promotional group based in London,
is awaiting approval from the Securities and Exchange
Commission for a new exchange-traded fund backed by
gold bullion. A similar fund was set up this summer on the
Toronto Stock Exchange by a Canadian group with
significant participation from American investors.

quot;When gold gets moving, there's nothing like it,quot; said Ilja
Graulich, general manager for investor relations at Durban
Roodepoort Deep, a South African gold producer that
also has interests in Australia and Papua New Guinea
and is listed on the Nasdaq. quot;It's very easy to get hold
of money at the moment,quot; he said.

Gold is a part of many investors' portfolios, whether in
the form of bullion, coins or shares of the companies
that produce it. While the price of gold occasionally
bursts higher on fear of runaway inflation, political
instability or turbulence in financial markets, it has
yet to come close to its peak, in January 1980, when
it reached $850 an ounce. Gold investments were a big
disappointment for much of the 1980's and 90's.

Investors in gold and the mines that produce it have
done well in the last year. The metal was trading at
$377 an ounce on Friday, about 18 percent higher than
its 2002 average of $309. It briefly topped $380 this year,
before the war in Iraq began.

The Amex's Gold BUGS index has soared 86 percent
from its 52-week low, reached in October. (BUGS stands
for basket of unhedged gold stocks.) The Philadelphia
Stock Exchange Gold and Silver index, which includes
some companies that hedge part of their output, has
chalked up more modest gains, rising 17 percent so
far this year.

American gold funds are reporting substantial inflows.
quot;We're having our best year in quite some time,quot; said
Joe Foster, who manages the Van Eck International
Investors Gold fund. The fund's assets have grown by
60 percent so far this year, to $250 million, with inflows
from investors accounting for about three-quarters of the
increase.

John C. Hathaway, manager of the Tocqueville Gold
fund, said that the fund's asset value had grown more
than 50 percent in the last year, to about $293 million.
The rising prices of its holdings accounted for less than
one-fifth of the increase, Mr. Hathaway said, with inflows
making up the rest.

Big gold producers like Newmont Mining of Denver,
AngloGold of South Africa and Barrick Gold and
Placer Dome of Canada, have traded on the New York
Stock Exchange for years. The 10 Canadian companies
that have been listed on the Amex in the past year
include the Iamgold Corporation, Northgate Exploration,
Wheaton River Minerals, Minefinders Corp., Eldorado
Gold Corp., Miramar Mining Corp., and Great Basin
Gold. The most recent was Gammon Lake Resources
of Nova Scotia, listed on Aug. 29.

quot;We're hearing from the companies that now is the
time when they can use the increase in the gold price
to gain access to the United States capital markets,quot;
said John McGonegal, vice president for equity sales
at the Amex.

The exchange has assigned one of its sales
representatives to Canada virtually full time to attract
listings and is sponsoring two conferences on gold this
year. Officials of International Investment Conferences
of Miami, which is organizing the events, said 252
analysts and fund managers had registered for one of
them, to be held this week in New York, roughly double
the number last year. About 3,000 individual investors
are also expected to attend, a fifth more than last year.

Jon A. Douglas, the chief financial officer at Northgate
Exploration, says that overall trading volumes in the
company's stock, which was already listed in Toronto,
have more than doubled since it was listed on the Amex
on July 11. Trading on the Amex has accounted for 31
percent of Northgate's daily volume.

Barry Cooper, a metals analyst at CIBC World Markets
in Toronto, wrote in a recent report that the stocks of
smaller gold producers had become more attractive partly
because of the weak financial performance of some
large producers, despite higher gold prices. Mr. Cooper
singled out Eldorado Gold and Cambior, which also trade
on the Amex. On the other hand, he called Minefinders
and Wheaton River quot;underperformers.quot;

Mr. Hathaway, the fund manager, said, quot;People didn't
know about a lot of those stocks a year ago; now they
do know them.quot;

Still, Barry J. Landen, vice president for corporate affairs
at Agnico-Eagle Mines, a Canadian gold company listed
on the New York Stock Exchange, said that while investor
interest was high, most of it was coming from familiar
faces. quot;We want to see some new faces,quot; Mr. Landen
said.

In another move to expand choices for investors, the
World Gold Council applied to the S.E.C. in May for
approval to list its Equity Gold Trust, an exchange-traded
fund, on the New York Stock Exchange. Richard Simonelli,
a spokesman for the council, said, quot;Hopefully, sometime in
the fall, we'll have a better understanding on the timing of
the rollout.quot;

A similar exchange-traded vehicle, Central Gold Trust,
listed on the Toronto exchange through a public offering in
July. The trust's president, Stefan Spicer, said that the 207
gold bars backing the trust were stored in the vaults of the
Canadian Imperial Bank of Commerce, and were not
pledged as collateral on any loans. The trust has also said
it will buy more gold whenever it issues new units so as not
to dilute existing shareholders' interests.

Mr. Spicer said investors outside Canada had bought about
20 percent of the units. quot;The amount of interest in the United
States has been very significant,quot; he said. The trust's units
are trading at about 23 Canadian dollars ($16.79), compared
with the issue price of 20 Canadian dollars.

Of course, the performance of all these investments ultimately
depends on the price of gold.

The current popularity of gold has stoked the exuberance of
gold fund managers, newsletter publishers and others. Mr.
Hathaway concluded in a recent article that quot;neither the stock
or bond market is capable of delivering anything close to the
returns of the last 20 years.quot;

quot;Once investors 'get real,' quot; he added, quot;they will migrate from
paper to tangible assets.quot;

Not everyone shares such enthusiasm. Observing that the
gold market has its share of eccentrics, who tend to interpret
a small rise in prices as the start of a major bull run, Mr.
Graulich, the South African executive, said that quot;half the
gold stocks are discounting a price of between $450 and
$475 at the moment.quot; If the price fails to reach those
levels, investing in these stocks could lose much of its
present allure.

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

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