Howe lawsuit goes to hearing Monday in Boston

Section:

10:18a ET Tuesday, October 30, 2001

Dear Friend of GATA and Gold:

GATA was mentioned today in the BBC report that follows,
which is pretty good for setting out, if briefly, the
rationale for governments to suppress the gold price.

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

* * *

Gold market thwarts expectations

By Rodney Smith
BBC business reporter
Tuesday, October 30, 2001
http://news.bbc.co.uk/hi/english/business/newsid_1627000/1627713.stm

It's an appalling thing to say, but for a while it looked like the
gold bullion market never had it so good.

First there is a huge calamity, with worldwide repercussions
on 11 September. Everyone then typically rushes to safe
havens.

And the oldest safe haven of all? Gold.

But it didn't happen like that. Gold made it into the $290s an
ounce mark, but slowly fell back to its long-term trend,
around the mid $270s an ounce.

This did not please perplexed gold miners and bullion
traders. They fell back to their pre-September 11
positions.

Many are taking a rational view of the market.

A typical example is Mitsui Securities' Andy Smith, who
gave the bullion market a little shove about a month ago
when he switched from long-term bear, to short-term bull.

He said he was looking for gold to go to $340 an ounce.

The reason it has not, he now says, is because the fear
factor has drifted away.

People are no longer as scared as they were in the
month that followed the attack on the Pentagon and the
Twin Towers.

Look at the stock market back where it was before
September 11, he says. Look at the Swiss franc -- flat.
Llook at gold -- just a little stronger.

The stunner for the gold market, he thinks was Credit
Suisse's decision to abandon the gold market in early
October.

That would have been unthinkable for a Swiss bank
only 10 years ago.

Then and later they were recommending investors to
keep 5-10 percent of their wealth in gold.

So does Mr. Smith take back his forecast of $340 an
ounce by the end of the year?

"Certainly not," he says. "I'm sticking to my guns." He
thinks the fear is still there, just dormant.

The bull turned bear gold miner Peter Hambro, formerly
of Gold Mines of Sardinia, now "the third biggest gold
producer in Russia," also thinks this.

"When the aircrafts hit the Twin Towers, I ran for the
cash machine. I am the sort of person who believes
hat disaster could strike at any time."

"The trouble is too many people don't know about life
without cash machines."

Like some other producers, Mr. Hambro leans towards
the GATA/Reg Howe theory about the gold price.

This is the case being brought in the United States that
alleges the authorities have conspired with central banks
and the huge investment banks to suppress the gold price.

"After all, the very bright people at the immensely powerful
Bank for International Settlements have been manipulating
foreign exchange markets into stability for years. They have
persuaded the oil producers to keep a lid on oil prices,"
argues Mr. Hambro.

"Why not gold too?"

Why not gold? A runaway gold price could be the kind of
destabilising factor "the authorities" are striving so hard
and so successfully to avoid.

It could also do huge damage to big banks that have
backed big hedge positions.

A commodity?

But it's hard not to conclude that in these days of highly
sophisticated financial engineering, good old gold just
could be turning into the commodity metal.

Or as Randall Oliphant, president and chief executive of
America's biggest gold miner Barrick, told shareholders
recently, "Gold is becoming a consumer product".

That made the gold bulls mad.

__________________________

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