Morning commentary at USAGold

11:35p EST Monday, November 29, 1999

Dear Friend of GATA and Gold:

The best of the day is saved for last. Herewith quot;the
Golden View from The Towerquot; at www.USAGold.com.

The Tower's insight is that today's Bank of England gold
auction established not any weakness for gold but that
the new higher prices are solid. Gold's fans just have
gotten a little spoiled lately, it seems.

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

* * *

The GOLDEN VIEW from The Tower
www.USAGold.com

November 29, 1999

Ignoring the temporary, reactionary spike up and
inevitable retracement of the price spike following the
European central banks' announcement of the Washington
Agreement to curb future lending and sales, gold seems
clearly to have established itself on a firm footing
destined for a brighter future ... particularly as
compared with the dollar, as we'll explain.

To recap this morning's gold market action, dealers
said producer selling out of Australia led to the drop
in the gold price in overseas trading ahead of the UK
auction. Surely playing a factor too would be the heavy
currency intervention from Japan, which strengthened
the dollar while weakening the yen.

All other factors being equal, this alone would drop
the gold price. The sum of these effects brought the
morning gold fixing in London to $293.10. When the
auction deadline later arrived, it was revealed that in
the closed bidding process, parties were willing to
take the full 25 tonnes offered at prices at or above
$293.50. Though some market participants had higher
expectations and were depressed with the results, a
fairer assessment is in order.

The truth of the matter is that these 25 tonnes were
not rejected but were in fact TAKEN by professionals at
a price $40 higher (up 15 percent) than a short two
months ago at the September auction. That, my friends,
is what we call a Reality Check. The reality is that
these prices are SOLID.

Unfortunately, many market participants were expecting
fireworks, so in a fit of disappointment they threw
reason out the window, and gold traded down throughout
the day. Spot was sold down $7.20 to $290.60, returning
to a point in time only 10 days ago when the price was
last seen at this level. Where's the pain there? Ten
days. That's nothing if you hold physical, unleveraged
gold, but on the other hand, leveraged derivative
positions subject to margin calls and expiration dates
might certainly leave you with sleepless nights. Even
the Philadelphia Stock Exchange Gold and Silver Index
plunged by 6.7 percent.

But while gold was revisiting its prices of only 10
days ago, the Bellwether Bond was sold down to levels
last seen over a month ago. The 30-year bond lost 31/32
in price, reaching its lowest since October 27, driving
the yield to 6.3 percent.

Go for the gold...metal, that is.

Japan's Finance Minister Kiichi Miyazawa said on
Tuesday there would be no joint intervention at this
time with other nations in the currency market. quot;That
will depend on how things develop,quot; he said, adding
that Japan was ready to act alone to curb the surging
yen. quot;If necessary, we can intervene anytime.quot;

When you consider that the strong yen has been
countered with forex interventions that involve the
selling of yen primarily for the purchase of dollars,
we can't help but think that dollar weakness is an
equal concern. After all, to weaken the yen through the
supply/demand forces on the foreign exchange markets,
they could as easily flood the world with yen in
exchange for a little bit of EVERYthing -- euros, gold,
Swiss Francs, Australian dollars, etc.

Seen in this light, the dollar was effectively on the
receiving end of a joint international intervention:
the yen that Japan sold absorbed dollars from the
worldwide money market, and the gold that the UK sold
absorbed dollars also.

On heavy volume, the Dow lost 41 points (Nasdaq lost
26), but the telling story was the market internals. On
NYSE trading, declining stocks outnumbered advancers by
a wide margin of 2,126 to 989, and those reaching new
52-week lows absolutely crushed those reaching new
highs 373 to 54.

Back to solid gold....

FWN reported that David Meger, senior metals analyst at
Alaron Trading, said he doesn't expect an extended
break lower, and felt that this price fallback to shake
out the weak longs was probably constructive for the
market at this stage. Leonard Kaplan, chief bullion
dealer at LFG Bullion Services, said gold had quot;simply
gone from the top of its trading range to the bottom,quot;
and that he would be a buyer at the day's lows. He
noted that gold lease rates have started to rise again,
with one month at 1.05 percent today. (Last week rates
were 0.7-0.8 percent.)

To help appreciate the magnitude of some of the hedging
that has been utilized by gold producers, have a look
at this press release from Anglogold:

quot;ANGLOGOLD BUYS 300,000 OZS OF BANK OF ENGLAND GOLD

quot;AngloGold bid successfully for 300,000 ounces of the
803,600 ounces of gold sold at auction by the Bank of
England today (Monday, 29 November 1999). The purchase,
said Kelvin Williams, AngloGold's executive director
responsible for marketing, formed part of the broader
management of the company's hedge book in the run-up to
the financial year-end on 31st December.quot;

This leaves you with the impression that this quot;part of
broader (pre-December 31st) managementquot; is just a drop
in the larger bucket, doesn't it?

There was no change in COMEX gold inventory, with
889,793 registered ounces and 84,928 eligible ounces.
Statistics released today for the previous trading
session revealed a third-straight 11,000-contract
decline in COMEX December futures open interest. Only
20,747 December positioned remained heading into
today's trade, down 11,432 on volume of 32,136. First
Notice Day for delivery intentions on the December
contract is tomorrow. Some of these position are
apparently being rolled into the February future. Open
interest on that contract rose 16,048 on volume of
32,193 to 70,196 contracts.

OIL

January crude settled down 91 cents at $25.96 on
traders wrangling over the implications of the in-limbo
Iraqi oil agreements. quot;If the Iraqis are going to make
a deal with the UN, you better take some profits now
because the market could come off even more,quot; a broker
told Bridge News, but Iraq's Oil Minister Amer Mohammad
maintained the Iraqi opposition to the United Nations
stopgap resolution to renew the deal for only two
weeks. In regard to an anticipated six-month renewal
proposal, quot;Baghdad will deal with such a resolution and
clarify its position when the resolution is adopted.quot;

Brokers looking ahead to tomorrow's release of API data
estimate crude stockpiles to be reported down 1.5-2.0
million barrels amid an increase in refinery operations
as cold weather sets in.

And that's the view from here ... after the close.