Gold/currency analysts quoted on Friday''s action by CBSMarketWatch


8:11p ET Friday, February 20, 2004

Dear Friend of GATA and Gold:

After GATA Chairman Bill Murphy's "Midas" commentary
at, you'll want to read Jim
Sinclair's commentary for tonight, "Intervention
Triggers Massive Short Covering" here:

Appended is a Reuters story quoting comments about
currency intervention by the governor of the Austrian
Central Bank, a member of the European Central
Bank's Governing Council.

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

* * *

ECB's Liebscher Says Intervention Never Ruled Out;jsessionid=4GBUQAT4QFD0SCRBAE

By Jonathan Gould and Marcus Kabel

VIENNA (Reuters) -- European Central Bank Governing
Council member Klaus Liebscher said on Friday that
foreign currency intervention by the ECB could never be
ruled out but would not be discussed in public ahead of

Asked in an interview with Reuters whether the ECB
would be reluctant to intervene on its own to stop the rise
of the euro on the foreign exchange markets, he replied:

"It (intervention) is something which is never excluded.
But don't talk about it beforehand, only talk about it

Liebscher's comments were more cautious than remarks
attributed to Belgian central bank deputy governor Luc
Coene in the financial weekly Trends on Thursday that
it would be naive to think unilateral ECB intervention
could change the tide.

The euro rose by 20 percent against the dollar in 2003
and this week hit a record high against the U.S. unit
at $1.2927.

Current ECB interest rates at 2.0 percent are appropriate,
he said. Asked if rates set last June should be changed
given the ECB's expectation that inflation will diminish
over the coming two years, he said "It is still appropriate."

Liebscher played down the impact of the euro's external
value on the 12-nation currency bloc, pointing out that
about 80 percent of the region's trade is with other bloc

"The focus on the exchange rate is important but one
should not overdo it."

Liebscher added that Austria would consider selling
gold under any new central bank gold agreement but
declined to say how much.

The current five-year agreement among 15 European
central banks to limit sales from their gold reserves is
due to expire in September this year. A number of
central banks have expressed interest in renewing
the agreement.

Liebscher, who is also Austria's central bank governor,
repeated the ECB's forecast for a gradual recovery,
supported by rising foreign demand and favorable
financing conditions at home.

Domestic demand should also be supported by slowing
inflation, which is on course to fall below two percent this
year in line with the ECB's definition of price stability.

"There are, up to now, no real concerns that we won't
see that development," Liebscher said.

Annual inflation rates will probably hover around 2
percent for the next few months, but the reasons for this
"slight postponement" in the expected decline are well
known, he said, citing the lingering fallout from last
year's hike in food prices and tax increases in some
euro zone countries.

Liebscher said he is optimistic about the improving
prospects for euro zone growth.

"The mood is much better than a couple of months ago,"
he said, referring primarily to euro zone business

Consumers too are getting back to reality after reacting
with uncertainty and pessimism to structural reform plans
in a number of European countries. People recognize the
need for reform, he said.

Asked if the latest economic developments made a revision
to ECB staff economic projections more likely when they
are next published in June, Liebscher said: "A revision is
always possible. I do not dare yet to say in what direction
and to what extent."

"On the one side we have had an appreciation of the euro
which was not in December's projections at this level.
On the other hand the global economy recovered much
stronger than probably foreseen in this forecast."

The ECB's staff economic projections published last
December showed the mid-point of the forecast growth
range at 1.6 percent for 2004 and at 2.4 percent for 2005.
The mid-point for inflation was seen at 1.8 percent this
year and at 1.6 percent for 2005.


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