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GATA is having an impact on gold market

Section: Daily Dispatches

9p EDT Tuesday, December 5, 2000

Dear Friend of GATA and Gold:

We've broken into the mainstream press in Australia in
a big way with an article published in the December 6
issue of the Australian Financial Review. It appears
below and is stunning for its reporting exactly what
GATA Chairman Bill Murphy has been saying for a long
time now.

Meanwhile, a friend of GATA, Mike Waters, sends news of
some interesting comment on CNBC about manipulation of
the gold market. That appears below as well.

The word is getting out.

Also of interest and included here is an article from
today's Financial Times in Canada.

As for our challenge to the Bank for International
Settlements, GATA hopes to have an announcement in the
next week or so.

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

* * *

Australian Financial Review
Wednesday, December 6, 2000

Gold Conspiracy

The spike in gold stocks yesterday reflected in part
the strong inverse correlation between the gold price
and the U.S. dollar as investors look toward a peaking
(at long last) in the greenback.

Thanks to its acute $US hedging position, Newcrest
Mining rallied strongest, up 40 cents to $4.55. It was
also buoyed by ongoing talk it many be a corporate
target for the likes of South African groups AngloGold
and Gold Fields.

The more interesting aspects are the conspiracy
theories circulating in global commodity markets.
Between October 26 and Novemeber 24 gold traded within
a $1 range of US$266 an ounce, a trivial trading band
compared with the uncertainty swarming in equity

The theory is that the Federal Reserve -- with the aid
of Goldman Sachs and Chase Group -- is intervening in
what should be a free market and beating down the metal
within an inch of its life.

Why? Net short positions held by financial institutions
are astronomical. One analyst reckons it would take 10
years of supply to satisfy demand if all contracts were
closed out and physical demand had to be delivered.

The big orchestrated attempt to cripple the gold price
is also an attempt to make sure money isn't ripped out
of U.S. equity markets, thereby exacerbating falls.

* * *

Dear Bill:

Have you actually heard anyone on CNBC actually admit
that the gold market is being rigged? Well, it happened
on Friday morning about 9.30 European Time.

Last spring Phillip Manduca, a respected fund manager
from Tilney Investment Management, expressed a positive
attitude about gold's prospects but thought it might
not happen until the autumn, when the Fed's interest
rate hikes had run their full course.

So when he reappeared yesterday I took the opportunity
to drop an e-mail to CNBC asking what he thought now.

Manduca is a no-nonsense type of person who tends to
call things as he sees them. In typically unequivocable
fashion, he said the supply of gold is being controlled
by the central banks with a view to confusing the
message on inflation. This is definitely a new tack for
him. He said that for this reason he would not touch
gold for the next six months or year unless it breached
the $320 mark.

It is a shame that he did not seek to comment on the
ethics of the central banks' actions, but at least the
message seems to be getting through.

Kind regards,
Mike Waters

* * *

Gold lures tech-weary investors

Bullion not a factor; pressure on
U.S. dollar is good news for gold stocks

By Peter Brieger
Financial Post (Canada)
December 5, 2000

As mighty tech stocks continue their free fall and the
U.S. dollar shows signs of weakness, gold has been
holding a big party for prescient investors.

The Toronto Stock Exchange 300's gold and precious
metals subgroup has outperformed the broader index by
about 25 percent since the start of November, putting a
shine back in the embattled sector.

In the last month, high-profile gold equities,
including Barrick Gold Corp., Placer Dome Inc., and
Franco-Nevada Mining Corp. have all seen their share
prices surge more than 15 percent, but it's downtrodden
Kinross Gold Corp. that is shining the brightest,
rocketing almost 60 percent.

Many analysts thought Kinross was doomed to join a host
of gold stock casualties, said John Embry, vice-
president of Canadian equities for Royal Bank
Investment Management Inc. quot;So any time there is some
relief in gold prices, Kinross shoots right up,quot; he

Bullion prices, the usual suspect in gold stock
rallies, are not the key factor this time: Gold is up
only about US$6 in the past five weeks. It closed in
New York yesterday at US$270.70 an ounce, up US$2.

Instead, some analysts are pointing to a weaker U.S.
dollar and softening economy south of the border. quot;When
people are worrying about the usual things in the
economy, gold acts as something of refuge,quot; Mr. Embry

With the U.S. trade deficit ballooning to a record
level and threatening to send the U.S. dollar for a
tumble, the news is good for gold equities, according
to UBS Warburg economists Catherine Gignac and Ludo Van

quot;Expectations that the U.S. dollar may weaken on the
back of this negative economic news are positive for
gold ... due to the strong historical inverse
correlation between the U.S. dollar and the U.S.
dollar-based gold price,quot; they advised clients in a
Nov. 22 report.

As the greenback falls in value against world
currencies, including the euro, gold becomes a cheaper
buy. Add a tumultuous tech sector to the mix and you've
got fertile ground for gold growth.

quot;I think the market is telling you that there are very
few places where you can hide your money,quot; said Martin
Roberge, a quantitative analyst with National Bank

That point may also apply to portfolio managers who
want to lock in tech sector profits, but can't keep
more than 10 percent of a fund's holdings in cash.
quot;They can't put it all in cash any more,quot; Mr. Roberge
said. quot;That's the reality of the equity cycle in the
'90s. When they held too much cash in the past, some
portfolio managers got fired -- they're not paid to
hold cash.quot;

However, Mr. Roberge is disturbed that while gold
equities are up sharply, gold prices have barely moved
-- and the gap seems to be widening. Historically, gold
price hikes follow an upward move in gold equities.

quot;Otherwise you'll face negative earnings revisions
going forward,quot; Mr. Roberge said. quot;To get these stocks
rising more you'll have to see more weakness in the
overall global equity markets, weakness in the U.S.
dollar coupled with strength in gold prices.quot;

Yesterday's ongoing surge in gold stocks -- a 3.6
percent gain for the index -- coincided with broader
gains in Old Economy sectors, with similar gains for
oils, metals and forestry stocks.