Wheaton transfers silver production to new company, complicating takeover bid

Section:

By Jim Hawe
Dow Jones Newswires
Thursday, July 15, 2004

http://sg.biz.yahoo.com/040715/15/3lpm6.html

TOKYO -- Gold's safe-haven appeal may
become a little tarnished among
Japanese investors if a proposed merger
between two banking giants brings about
some needed stability to the nation's
financial sector.

Still, many industry insiders believe
Japanese investors won't be giving up
their gold any time soon as bullion
still offers other appealing qualities.

Wednesday, UFJ Holdings Inc. proposed
a merger with rival Mitsubishi Tokyo
Financial Group Inc. in a deal that
would create the world's largest
lender.

Such a move is seen by many as
signaling a close to Japan's banking
crisis as UFJ, the weakest of the
nation's four "mega-banks" would be
merging with the strongest of the
lot.

"Such a merger would likely reduce
the immediate need for safe-haven
assets arising from a possible
banking crisis," said Itsuo Toshima,
the Japan-Korea regional director
for the World Gold Council.

However, Toshima isn't expecting a
rush to sell gold as he sees the
banking problem as just one part
of a broader economic landscape
that has driven Japanese investors
to embrace the yellow metal.

"There are still two distinct
uncertainties hanging over the minds
of Japanese investors, namely a
possible collapse of the pension
system and an unprecedented level of
public debt, which now stands at
around 700 trillion yen," said the
council's Toshima.

A dealer of precious metals futures
with one of Japan's largest
commodities houses said he has yet
to see a shifting of funds out of
gold futures.

"There is no firm correlation
between commodity markets and stock
markets in Japan as there is in
other countries. They are just not
seen as alternative investment
instruments to Japanese investors,"
he said.

The dealer said investors holding
shares in Japanese mining stocks
may sell to buy banking shares if
the proposed UFJ-MTFG merger heats
up the banking sector, but a shift
from gold futures to bank shares
seems doubtful.

In fact, the benchmark June 2005
gold contract traded on the Tokyo
Commodity Exchange was up Y6/gram
at Y1,422/gram Thursday morning,
adding to Wednesday's Y4-gain.

The World Gold Council's Toshima
expects gold will remain an important
fixture in the portfolios of many
Japanese investors.

"Our latest research shows that the
No.1 reason cited for buying gold,
at 56 percent, is the fact that
'gold does not become a worthless
piece of paper', which confirms
that investors here still regard
gold as a good risk-management
tool," he said.

Toshima added signs that the
Japanese economy is working free
from its prolonged deflationary
spiral is another reason to hold
onto gold.

"In our survey, 'inflation hedge'
was sighted as the third most common
reason for buying gold," he said.

Spot gold was quoted at $404.50 a
troy ounce Thursday morning in Asia,
up from $404.15/oz late Wednesday.

----------------------------------------------------

To subscribe to GATA's dispatches, send an e-mail to:

gata-subscribe@yahoogroups.com

To unsubscribe, send an e-mail to:

gata-unsubscribe@yahoogroups.com

----------------------------------------------------

RECOMMENDED INTERNET SITES
FOR DAILY MONITORING OF GOLD
AND PRECIOUS METALS
NEWS AND ANALYSIS

Free sites:

http://www.jsmineset.com

http://www.cbs.marketwatch.com

http://www.mineweb.com/

http://www.gold-eagle.com/

http://www.kitco.com/

http://www.usagold.com/

http://www.GoldSeek.com/

http://www.capitalupdates.com/

http://www.DailyReckoning.com

http://www.goldenbar.com/

http://www.silver-investor.com

http://www.thebulliondesk.com/

http://www.sharelynx.com/

http://www.mininglife.com/

http://www.financialsense.com

http://www.goldensextant.com

http://www.goldismoney.info/index.html

http://www.howestreet.com

http://www.depression2.tv

http://www.moneyfiles.org/

http://www.howestreet.com

http://www.minersmanual.com/minernews.html

http://www.a1-guide-to-gold-investments.com/euro-vs-dollar.html

http://www.goldcolony.com

http://www.miningstocks.com

http://www.mineralstox.com

http://www.321gold.com

http://www.SilverSeek.com

http://www.investmentrarities.com

http://www.kuik.com/KH/KH.html
(Korelin Business Report -- audio)

http://www.plata.com.mx/plata/home.htm
(In Spanish)
http://www.plata.com.mx/plata/plata/english.htm
(In English)

Subscription site:

http://www.lemetropolecafe.com/

http://www.hsletter.com

Eagle Ranch discussion site:

http://os2eagle.net/checksum.htm

Ted Butler silver commentary archive:

http://www.investmentrarities.com/

----------------------------------------------------

COIN AND PRECIOUS METALS DEALERS
WHO HAVE SUPPORTED GATA
AND BEEN RECOMMENDED
BY OUR MEMBERS

Blanchard & Co. Inc.
909 Poydras St., Suite 1900
New Orleans, Louisiana 70112
888-413-4653
http://www.blanchardonline.com

Centennial Precious Metals
3033 East 1st Ave., Suite 403
Denver, Colorado 80206
www.USAGold.com
Michael Kosares, Proprietor
US (800) 869-5115
Canada 1-800-294-9462
European Union 00-800-2760-2760
Australia 0011-800-2760-2760
cpm@usagold.com

Colorado Gold
222 South 5th St.
Montrose, Colorado 81401
www.ColoradoGold.com
Don Stott, Proprietor
1-888-786-8822
Gold@gwe.net

El Dorado Discount Gold
Box 11296
Glendale, Arizona 85316
http://www.eldoradogold.net
Harvey Gordin, President
Office: 623-434-3322
Mobile: 602-228-8203
harvey@eldoradogold.net

Investment Rarities Inc.
7850 Metro Parkway
Minneapolis, Minnesota 55425
http://www.gloomdoom.com
Greg Westgaard, Sales Manager
1-800-328-1860, Ext. 8889
gwestgaard@investmentrarities.com

Kitco
178 West Service Road
Champlain, N.Y. 12919
Toll Free:1-877-775-4826
Fax: 518-298-3457
and
620 Cathcart, Suite 900
Montreal, Quebec H3B 1M1
Canada
Toll-free:1-800-363-7053
Fax: 514-875-6484
http://www.kitco.com

Lee Certified Coins
P.O. Box 1045
454 Daniel Webster Highway
Merrimack, New Hampshire 03054
www.certifiedcoins.com
Ed Lee, Proprietor
1-800-835-6000
leecoins@aol.com

Miles Franklin Ltd.
3015 Ottawa Ave. South
St. Louis Park, Minn. 55416
1-800-822-8080 / 952-929-1129
fax: 952-925-0143
http://www.milesfranklin.com
Contacts: David Schectman,
Andy Schectman, and Bob Sichel

Missouri Coin Co.
11742 Manchester Road
St. Louis, MO 63131-4614
info@mocoin.com
314-965-9797
1-800-280-9797
http://www.mocoin.com

Resource Consultants Inc.
6139 South Rural Road
Suite 103
Tempe, Arizona 85283-2929
Pat Gorman, Proprietor
1-800-494-4149, 480-820-5877
Metalguys@aol.com

Swiss America Trading Corp.
15018 North Tatum Blvd.
Phoenix, Arizona 85032
http://www.swissamerica.com
Dr. Fred I. Goldstein, Senior Broker
1-800-BUY-COIN
FiGoldstein@swissamerica.com

----------------------------------------------------

HOW TO HELP GATA

If you benefit from GATA's dispatches, please
consider making a financial contribution to
GATA. We welcome contributions as follows.

By check:

Gold Anti-Trust Action Committee Inc.
c/o Chris Powell, Secretary/Treasurer
7 Villa Louisa Road
Manchester, CT 06043-7541
USA

By credit card (MasterCard, Visa, and
Discover) over the Internet:

http://www.gata.org/creditcard.html

By GoldMoney:

http://www.GoldMoney.com
Gold Anti-Trust Action Committee Inc.
Holding number 50-08-58-L

Donors of $750 or more will, upon request,
be sent a print of Alain Despert's colorful
painting symbolizing our cause, titled "GATA."

GATA is a civil rights and educational
organization under the U.S. Internal Revenue
Code and contributions to it are tax-deductible
in the United States.