FLASH! Central Banks terrorize the shorts

11:12p EDT Friday, September 24, 1999

Dear Friend of GATA and Gold:

Can you handle even more encouragement tonight? If so,
here's a bulletin posted at the web site of the Tocqueville
Fund, www.tocqueville.com, by John Hathaway, whose
masterful essay, quot;The Golden Pyramid,quot; defined and
predicted the gold market a few weeks ago.

Please post this as seems useful.

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

* * *

By John Hathaway
www.Tocqueville.com

September 24, 1999

The gold market has bottomed!

We are in the early stages of a short squeeze.

The short interest was hoping that the gold market
would collapse after the recent UK gold auction, as it
did in early July. But the bids were strong and the
market traded higher.

In the minds of the shorts, this might have been their
last hope to get out.

I estimate the speculative short interest in the New
York macro hedge funds alone to be at least 1,000 tons
and possibly 75 percent more. As I just wrote in quot;The
Golden Pyramid,quot; there will be no easy way out for
these speculators because there is simply no physical
gold with which to cover. The pool of liquidity
supplied by central bank leasing is frozen until well
into the new year.

Meanwhile, the stock market appears to be entering a
bear phase, with a confirmed Dow Theory sell signal
achieved yesterday. Look for a painful time for run of
the mill equities.

Gold and gold shares should begin to attract investment
demand at the same time shorts are unable to cover. The
situation has the makings of a huge rally.