CFTC economist tells mining group that silver market is not manipulated

Section:

By David Elliott
Dow Jones Newswires
Friday, December 10, 2004

http://money.iwon.com/jsp/nw/nwdt_rt.jsp?section=news&news_id=dji-
00058920041210&feed=dji&date=20041210&cat=INDUSTRY

LONDON -- Gold bars held by the StreetTRACKS
gold-backed exchange- traded fund may be
stamped with the same number but such a move
is standard practice, Johnson Matthey PLC said
Wednesday.

In a letter to the World Gold Council, which is
behind the launch of the fund, Johnson Matthey
said that prior to 2002 all bars it produced were
stamped with a two-letter code, representing the
year, followed by a number. After 2002 the
company said it stamped the bars with a year,
such as 2003, followed by a number.

"Therefore, some bars will have the same number
but with different prefixes," David Grimwood,
Johnson Matthey customer services manager,
said. "Both the letter and the number combination
need to be taken into account to identify the bar."

The letter follows suggestions by James Turk,
editor of the Freemarket Gold and Money Report
and founder of the GoldMoney gold depository
and gold payment system, that 2.2 percent of the
inventories held by StreetTRACKS were "called
into question."

He said on Dec. 5 that out of the 6,981 gold bars
on the fund's list, 78 had duplicate bar numbers.
Johnson Matthey's explanation for some of the
bars having the same numbers didn't change
his opinion.

"It would appear from their letter that the prefix
to the bar was not recorded in the bar list
reported on the StreetTRACKS Web site," Turk
told Dow Jones Newswires. "The problem is
that without having the ability to audit all of
the assets of GLD (StreetTRACKS), there is no
way of verifying whether this error was a simple
bookkeeping error or whether other factors
were at work."

Industry analysts said the sharp fall in the price
of gold on Wednesday may have been linked in
a small extent to the comments on StreetTRACKS'
inventories.

"It's possible it (the fall in the gold price)
may be related to an allegation that was put out
questioning the inventories," said an analyst.

Spot gold in Europe fell nearly 4 percent
Wednesday to a four-week low at $433.30 a troy
ounce, primarily on a stronger dollar against the
euro and heavy long position profit taking.

The total net asset value of gold in the trust
dropped from 103.56 metric tons to 88.02 tons
from Monday to Tuesday before climbing again
to 91.13 tons Wednesday. The latest gold bar
list, updated each Friday, shows 8,306 bars or
3,326,797.97 ounces.

StreetTRACKS gold shares were launched Nov.
18 on the New York Stock Exchange to track the
price of gold. Each share represents one-tenth
an ounce of gold.

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