GATA''s international conference supports Mexican silver coinage plan


By Myra P. Saefong
Thursday, August 18, 2005

SAN FRANCISCO -- Gold futures closed modestly lower Thursday as
strength in the U.S. dollar squashed traders' attempts to recover
part of the more than $6-an-ounce drop prices suffered in the
previous session.

December gold fell 50 cents to close at $444.70 an ounce on the New
York Mercantile Exchange. But the contract traded as high as $447.70
earlier after dropping more than $6 in Wednesday's session.

Silver for September delivery closed up 0.5 cent at $6.998 an ounce.

"As far as today's trading goes, gold's early rebound is an
indication that the bull market trend is intact, and that the
contribution of higher energy prices to the metal's rally was
marginal, at best," said Brien Lundin, editor of Gold Newsletter.

The "speculative froth in oil and copper was adding some near-term
risk to the gold market," and that was proven true on Wednesday, he

But now, "the underlying support for gold has been outside of the
speculative arena, with physical demand emanating from buyers with
longer-term views," he said.

"Oil money from the Middle East as well as seasonal demand from
India are certainly strong contributors to the recent surge in gold
buying," said Lundin.

Even more demand stems from investors who are looking six months to
a year down the road and "seeing a slowing U.S. economy and the end
of the Fed's rate-hike campaign," he said.

In that scenario, the investors "don't see gold trading for anywhere
near today's prices," he said.

In the meantime, disappointing European economic data and demand for
U.S. Treasurys spelled strength in the dollar against the euro on

And strength in the dollar usually eases investment demand for gold.

Earlier Thursday, the dollar and interest rates played a "tug of war
(i.e. lower rates but a higher dollar) with lower equities," said
Charles Nedoss, an analyst at Peak Trading Group, noting that the
lower equities and lower rates implicate a lower dollar to come.

Also with equities struggling, the market sees "some money moving to
bonds which put pressure on rates -- this can be bearish the dollar
down the road," he said.

Dale Doelling, chief market technician at Trends In Commodities,
also expects weakness in the dollar.

"Trend in the dollar is still down and the market is just testing
the resolve of the dollar bears at this time," said Doelling. Given
that, "the long-term trend remains positive for the precious metals
and traders will eventually see that [Wednesday's gold-price drop]
was nothing more than a tremendous buying opportunity," he said.

Some traders on Wednesday "suggested the rise in the dollar was
making it clear that gold wasn't the best instrument to capitalize
on the potential for flight to quality conditions," said Nell
Sloane, an analyst at in daily commentary.

And with oil falling back sharply off new highs, there were a number
of reasons for traders to reduce flight to quality holdings of gold
on Wednesday, she said.

There was minor support overnight at $443.40, "but there is little
preventing the market from sliding lower over the coming sessions,"
she warned.

For now, "the gold market has lost its bullish buzz" and about the
only positive about the recent price setback "is that lower gold
prices might help improve Indian demand ahead of the coming festival
season," she said.

Indeed, for the moment, "gold continues to find good demand from the
physical sector which will no doubt increase as we head into the
festival season in India and the Middle East," James Moore, an
analyst at London-based, wrote in a note to

Elsewhere in the metals market Thursday, copper prices climbed,
recovering a tiny part of the more than 3% they lost in the previous

September copper closed at $1.659 a pound, up 0.2 cent, or 0.1%.
Prior to Wednesday's price drop, the contract had marked five-
straight winning sessions.

Taking a look at the bigger picture, however, "with the dollar
climbing again and with the equity markets also under pressure,
funds may be more interested in taking profits off the table rather
than taking on more exposure," said William Adams, an analyst at

Rounding out the Nymex action, October platinum rose $3.50 to close
at $893 an ounce while September palladium closed at $183.85 an
ounce, down $1.30.

Tracking inventories, copper supplies were up 108 short tons at
8,112 short tons as of late Wednesday, according to Nymex. Silver
stocks were unchanged at 111.2 million troy ounces, while gold
inventories stood at 5.90 million troy ounces, down 1,608 troy
ounces from the previous session.

In equities, metals-mining shares closed mainly lower following
weakness on Wednesday.

Tracking the sector as a whole, the CBOE Gold Index closed at 86.29,
down 0.3%, with a 1.1% fall in shares of Placer Dome leading the

The Philadelphia Gold/Silver Index declined by 0.2% to close at
95.84 points, and the Amex Gold Bugs Index ended the session at
208.19, down 0.4%.


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

To unsubscribe, send an e-mail to:



Free sites:
(Korelin Business Report -- audio)
(In Spanish)
(In English)

Subscription sites:

Eagle Ranch discussion site:

Ted Butler silver commentary archive:



Blanchard & Co. Inc.
909 Poydras St., Suite 1900
New Orleans, Louisiana 70112

Centennial Precious Metals
3033 East First Ave., Suite 807
Denver, Colorado 80206
Michael Kosares, Proprietor

Colorado Gold
222 South 5th St.
Montrose, Colorado 81401
Don Stott, Proprietor

El Dorado Discount Gold
Box 11296
Glendale, Arizona 85316
Harvey Gordin, President
Office: 623-434-3322
Mobile: 602-228-8203

Gold & Silver Investments Ltd.
Mespil House
37 Adelaide Rd
Dublin 2
+353 1 2315260/6
Fax: +353 1 2315202

Investment Rarities Inc.
7850 Metro Parkway
Minneapolis, Minnesota 55425
Greg Westgaard, Sales Manager
1-800-328-1860, Ext. 8889

178 West Service Road
Champlain, N.Y. 12919
Toll Free:1-877-775-4826
Fax: 518-298-3457
620 Cathcart, Suite 900
Montreal, Quebec H3B 1M1
Fax: 514-875-6484

Lee Certified Coins
P.O. Box 1045
454 Daniel Webster Highway
Merrimack, New Hampshire 03054
Ed Lee, Proprietor

Lone Star Silver Exchange
1702 S. Highway 121
Suite 607-111
Lewisville, Texas 75067

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

Missouri Coin Co.
11742 Manchester Road
St. Louis, MO 63131-4614

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

Swiss America Trading Corp.
15018 North Tatum Blvd.
Phoenix, Arizona 85032
Dr. Fred I. Goldstein, Senior Broker

The Moneychanger
Box 178
Westpoint, Tennessee 38486
Franklin Sanders
1-888-218-9226, 931-766-6066



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

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

By GoldMoney:
Gold Anti-Trust Action Committee Inc.
Holding number 50-08-58-L

Donors of $1,000 or more will, upon request,
be sent a print of Alain Despert's colorful
painting symbolizing our cause, titled GATA.

Donors of $200 or more will receive copies
of "The ABCs of Gold Investing" by Michael
Kosares, proprietor of Centennial Precious
Metals in Denver, Colorado, and "The Coming
Collapse of the Dollar" by James Turk and
John Rubino.

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.