World Gold Council chairman mentions gold as currency, not just jewelry


8:10p ET Monday, September 26, 2005

Dear Friend of GATA and Gold:

Below are two news stories distributed in the last
24 hours that provide contrary speculations about
the gold price.

In the first story, market analyst Alan Williamson of
HSBC Holdings says gold will fall to $440 next month as
central banks increase their sales. HSBC is one of the
nine London bullion market makers and Williamson seeks
to assure the world that there will be plenty of gold
for all.

Even if this isn't whistling in the dark and the usual
bullion bank disinformation, it is confirmation that
central banks work through bullion banks like HSBC
to control the gold price just as they rig the
currency markets, gold being another currency.

The second story comes from the gold conference in
Denver, where Pierre Lassonde, president of Newmont
Mining and chairman of the World Gold Council,
predicts that central bank gold sales will decline
as the gold price rises. Regardless of whether
Lassonde is right or wrong, there it is again --
the price of gold in the short term is determined
by central bank sales.

One thing is certain: If the central banks keep
selling gold, they will run out eventually. The
evidence of the steadily rising and yet fairly
subdued gold price is that the central banks are
attempting a controlled retreat with gold to
rig the currency markets while conserving their
reserves. If so, there are now two sure things
in the investment world: coins and bullion.

So consider sticking it to the Masters of the
Universe by trading some of their infinitely
reproduceable currency for the hard yellow kind.
The dealers cited below will be glad to help.

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

* * *

Gold Prices Likely to Drop, HSBC Says

By Bloomberg News Service
via The Financial Express, New Delhi
Tuesday, September 27, 2005

Gold, after reaching a 17-year high of $474.45 an ounce in London
last week, may fall to $440 next month as central bank sales
increase the supply of bullion, HSBC Holdings Plc analyst Alan
Williamson said.

Gold supply may exceed demand by 104 metric tons this year as
central banks, the largest holders of the metal, sell a record 672
metric tons, Mr Williamson said. Gold for immediate delivery is up
as much as 13% in the past two months, and on Sept. 22 rose to the
highest price since January 1988.

"A lot of people concentrated on the fact that physical demand
this year has been very strong," Mr. Williamson, 38, said in a Sept.
22 interview from London. "That's really just looking at one
side of the equation. The supply has been very strong because
central banks sell at a record level."

Central banks, mainly in the U.S. and Europe, hold almost 20% of the
world's gold as a reserve asset. Gold futures in New York have
rallied from a 20-year low of $253.20 in 1999, partly because 15
central banks in Europe, including Germany, agreed to limit their
annual sales to 400 tons through 2004.

The banks, under a second agreement that started last year,
increased the annual limit to 500 tons. "The net effect is the
physical market is pretty close to balance and doesn't justify
the move higher in gold prices that we've seen," Mr. Williamson

HSBC, one of the nine market makers in London's over-the-counter
bullion market, expects jewellers and other producers to have ample
supplies of gold available to them, he said.

Prices will average $436 this year and $460 next year, Mr.
Williamson said. Gold for immediate delivery in London fell as much
as $3.89, or 0.8%, to $459.36 an ounce, the lowest since Sept 19.
The precious metal traded at $461.80 at 11:31 am London time on

HSBC's outlook contrasts with that of Citigroup Inc., which said
on Sept. 15 that gold will rise to $500 before the end of the year
as supply from mines and recyclers falls short of demand by 14%, or
459 metric tons.

Deutsche Bank AG said on Sept. 20 that gold may average $470 an
ounce next year. Merrill Lynch & Co in July predicted the metal
would rise to $725 an ounce by 2010.

* * *

Central Bank Gold Selling
Likely to Fall, WGC's Lassonde Says

By Heather Draper
Dow Jones Newswires
Monday, September 26, 2005

DENVER -- Gold sales by central banks will likely decline in the
near term as gold prices continue to climb, the chairman of the
World Gold Council said Monday.

"There has been a turnaround in attitude," said WGC Chairman Pierre
Lassonde, who is also the president of Newmont Mining Corp. "There
will probably be less central bank selling going forward ...
especially in Europe."

Lassonde was speaking at the Denver Gold Forum, being held in
downtown Denver Monday through Wednesday.

Central Banks hold about 19% of above-ground gold supplies, he said.

About one-third of the global gold supply each year is from gold
recycling or gold that moves in and out of the market, he said, and
the gold industry needed to find a strategy to better control that
portion of gold supplies.

In 2003, the World Gold Council developed a marketing strategy aimed
at curbing recycled gold sales and boosting demand.

Those efforts, which included promotions in Asia to encourage buying
gold as an investment and developing the gold Exchange-Traded Fund,
helped boost global gold demand by nearly 200 tons last year,
Lassonde said.

He noted that every 100 tons of additional demand equates to a rise
of about $10 an ounce in the gold price during a bull market.

Lassonde, who is often cited for his gold price forecasts, told the
gold forum audience that because he was representing the World Gold
Council, he couldn't make any gold price forecasts Monday.

On the sidelines of the conference, he reiterated his earlier
prediction that gold would hit $525 an ounce by early next year and
hinted that he would revise that forecast during a Newmont Mining
presentation at the forum on Wednesday.


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