GATA plans presentation at Vancouver conference June 12 and 13

Section:

Intervention against Gold Rising Sharply,
GATA Says, Citing New Derivatives Report

GATA press release
via Business Wire

Monday, May 23, 2005

http://home.businesswire.com/portal/site/google/index.jsp?
ndmViewId=news_view&newsId=20050523005408&newsLang=en

DALLAS -- Government intervention against the gold price has risen
sharply since the middle of last year, the Gold Anti-Trust Action
Committee reported today.

The increase in intervention, GATA said, was disclosed last week in
the Bank for International Settlements' semi-annual report on the
issuance of derivatives by major banks and dealers in G-10
countries. The report was studied by GATA's consultants -- James
Turk, founder of GoldMoney and editor of the Freemarket Gold & Money
Report; Michael Bolser, editor of the Interventional Analysis
newsletter; and Reginald H. Howe, gold market analyst and principal
of Golden Sextant Advisers.

The new derivatives numbers from the BIS are "stunning" in regard to
gold, Turk said, summarizing GATA's research. "In major banks and
dealers in the G-10 countries, the total notional value of gold
derivatives rose from $318 billion at mid-year 2004 to $369 billion
at year-end.

"That $51 billion increase -- a 32-percent annual rate of growth --
occurred while gold miners were reducing their hedge positions.

"The reduction in hedge positions by mining companies should have
resulted in a decrease in the aggregate position in the BIS report.
That it didn't happen suggests that the international economist
Frank Veneroso is right. Here's what Veneroso had to say in the
March issue of Gold Newsletter:

There is only one possible explanation for why purchases of
thousands of tonnes of gold in the futures and forwards markets do
not blow the price of gold sky-high: The official sector must step
in on gold price rallies as an offsetting forward seller.

How much more gold can governments dishoard to throw at the gold
market to keep the price down?

"The answer," Turk says, "is of course unknowable, both to us as
well as to the governments intervening in the gold market. At some
point the banks executing the government positions are going to
reach the tipping point, when the free-market demand for gold
overwhelms government price capping. I think that moment is near for
one important reason.

"Price capping in gold can be prolonged only by continually
supplying the market with physical metal. Right now the demand for
physical metal is strong. So governments can sell all the paper
derivatives they want, but it isn't going to stop people from buying
metal. In fact, the low price of gold resulting from government
price capping is causing the demand for physical gold to increase."

GATA's findings on the latest BIS gold derivatives report can be
found on the Internet here:

http://www.goldensextant.com/Charts.html

GATA Chairman Bill Murphy said this new evidence of government
intervention against the gold price should compel mining companies
to be represented at GATA's Gold Rush 21 conference in Dawson City,
Yukon, Canada, on August 8 and 9.

"Gold Rush 21 will hear presentations from gold and silver market
experts from around the world," Murphy said, "and will develop a
plan of action to restore free markets to the precious metals."

Information on Gold Rush 21 can be found on the Internet here:

http://www.goldrush21.com/

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

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Ted Butler silver commentary archive:

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

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

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