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2:43a ET Friday, August 22, 2003

Dear Friend of GATA and Gold:

Maybe nobody was terribly surprised by the clobbering
gold took in New York on Thursday, but some of gold's
partisans were understandably disappointed, as this
friend wrote tonight from Australia:

* * *

I've read all the great reads and listened to the
Internet radio programs you've recommended, and they
make a compelling case for an explosion in the gold
price. But something doesn't make sense...

According to GATA and its consultants:

1) Gold demand is explosive, and gold fundamentals are

2) "While it may take a only a little physical to knock
the price down a few dollars, keeping it there requires
far more gold. ... Time and again, the bears hit gold
hard, only to be met with huge buy orders at the lower

Great! But gold dropped $5 today and didn't recover
immediately. If the fundamentals and demand are as good
as we are told, then gold should recover immediately --
not a day or even an hour after the drop.

I hear talk about weak longs and speculators being
flushed out, but surely the huge buying from Eastern
countries should outweigh these mere individuals. If
not, then this is a negative factor in gold
fundamentals, which shouldn't therefore be described
as perfect.

Regards, S.

* * *

Some observations in reply....

At, GATA Chairman Bill Murphy
observes that the gold price is recovering much faster
from its regular trashings by the cabal. This quicker
recovery in the price implies strong physical demand
overcoming the supply of paper gold. For the moment
let's avoid predictions and look only at the past:

1) In the last 52 weeks the gold price has gone from
$310 to $360, a 16 percent increase. You can find the
graph for this at the lower right of the Kitco home
page here:

2) In the last 52 weeks the HUI gold share index has
gone from 103 to 183, a 77 percent increase. You can
find the graph for this at Yahoo here:^hui&d=c

3) Even in a bull market for gold, the gold price may
decline on most days -- because gold seems to
accomplish most of its gains in a few leaps and then
to sag for many days until the next leap. So you're
either in the market on the day of the leap or you
miss the big gain. If you don't know when the next
leap is going to be but are confident that it is
coming, you position yourself and wait, if not
entirely patiently.

GATA is in the free-market advocacy business, not
the investment advice business, but perhaps this
much encouragement can be offered as a means of
helping to beat those who have been suppressing
the gold price.

There's more encouragement this week: trader
Rick Ackerman's commentary from Thursday,
citing this week's brilliant essay by Marshall
Auerback at, to which you were
alerted by another GATA dispatch:

Here's the relevant excerpt from Ackerman:

"DEC GOLD (361.80): The futures backed sharply away
from $370, which I still expect to act as a catapult
to at least $395.90 if touched. Is the Fed responsible
for the pullback? Perhaps, if an essay by Marshall
Auerback is on the mark. He has inferred that the
central bank may be targeting $350 as a way to keep
the public from getting jittery. If so, it behooves
us to load up on gold shares while bullion prices
remain suppressed."

We're winning on the gold price and we're winning on
the shares. It just may take a little longer before
we win EVERYTHING. Besides, we don't really WANT
everything -- just a free market in gold.

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


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Centennial Precious Metals
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1-800-494-4149, 480-820-5877

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15018 North Tatum Blvd.
Phoenix, Arizona 85032
Dr. Fred I. Goldstein, Senior Broker



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