The yellow dog is barking again

11:40p EDT Thursday, October 28, 1999

Dear Friend of GATA and Gold:

GATA Chairman Bill Murphy reported today to his
subscribers at www.LeMetropoleCafe.com that
Australian gold producers began buying back
their hedges overnight, indicating that the gold
rally may resume soon. Bill also wrote that
another upward move in silver seems imminent.

Bill was contacted this week by a prominent
lawyer who has had important government
experience and who saw this week's price action
in gold as the most brazen manipulation. Bill
will be meeting with him soon, and we're hopeful
of getting more good information.

And by popular request, I'll take the liberty of
including here a note I sent Tuesday night to a
GATA member in Australia who was, for the
moment, discouraged by the price games going
on just then on the eve of option expiry.

quot;Hi, Phil:

quot;I have your note despairing of today's price action.
I can't give you any advice better than Bill Murphy's
'Midas' essay at www.lemetropolecafe.com. My
own feeling is that markets zigzag up and they
zigzag down more often than they go straight up
or straight down, and that we've seen the low in
gold for this year already and probably for many
years to come.

quot;Tonight Bill got word reliably that Goldman Sachs,
the usual prime orchestrator against gold, is buying
all the shares of Buenaventura it can find in Peru and
getting very long as the price declines.

quot;I imagine that the current retracement is being
engineered largely to bail out the Ashanti shorts, that
when they are covered the rally will resume, and that
gold is making higher lows as well as higher highs.

quot;I think the charts still show an upward trend.

quot;For most mines the price of gold is still below
the cost of production.

quot;And the central bank gold lending window is
closing and supplies are tight; why else would
the Kuwaiti lending have been not only arranged
but announced, even as the Kuwaitis are buying
up bargain-basement gold mines through Thistle
Mining?

quot;Powers bigger than you and me are repositioning
on the long side. We're better off than we were
a month ago and the greatest danger is that of
being shaken out in fear.

quot;That's my opinion, anyway!quot;

CHRIS POWELL, Secretary