Reuters picks up CFTC gold inquiry story


11:10p EDT Thursday, August 5, 1999

Dear Friend of GATA and Gold:

This story made the Reuters wire today thanks to GATA
Chairman Bill Murphy, in whose "Midas" commentary a few
days ago at appeared the first
word of the inquiries being made by the Commodity
Futures Trading Commission.

GATA is making a big difference. We are leading the
gold cause in the world against the manipulators, and
with your help we can win.

Please post this as seems useful. U.S. members, please
contact your congressmen.

With good wishes.

Gold Anti-Trust Action Committee Inc.

* * *

CFTC gives battered gold market more scrutiny

NEW YORK, Aug 5 (Reuters) -- The Commodity Futures
Trading Commission is keeping a closer eye on the gold
market after the hair-raising fall in the gold price to
20-year lows since May, the regulatory body said.

"We are aware of the market and we are staying on top
of it, but I don't think it is anything out of the
ordinary," said John Phillips, a spokesman for the CFTC
in Washington.

Spot gold bullion prices on June 20 hit their lowest
level since May 1979, quoted at an intraday nadir of
$252.20 an ounce. Gold prices have fallen more than
$37, or 12 percent, since Britain's May 7 announcement
that it would sell most of its 715-tonne gold reserve.

On Thursday, spot gold was around $256. In the futures
market, gold for December delivery last traded at
$258.80 on COMEX, a division of the New York Mercantile
Exchange. "Any time you have that kind of price
movement, you pay a little more attention to it. I
think that's true of existing contracts, as well as any
increase in volume or increase in price," Phillips

The gold market has been staggering under enormous bets
by bullion banks, hedge funds, and gold miners that
prices would continue to decline. The CFTC last Friday
released its biweekly commitments of traders report,
showing that net non-commercial, or speculative, shorts
positions in COMEX gold futures as of July 27 totaled
about 7 million ounces, or roughly 220 tonnes.

Though smaller than in recent reports showing short
positions of more than 8 million ounces, the data still
reflect overwhelming bearishness. While some central
banks and other institutions have in recent years
sought to enhance portfolio returns by direct sales of
their low-yielding gold reserves, or by loaning gold to
finance short sellers, the metal's plunge has fanned
conspiracy rumors and talk that bullion dealers and
others may be manipulating prices to ensure these short
positions remain profitable.

Large traders report their positions to the CFTC daily.
Phillips said such monitoring does not necessarily mean
the CFTC will be in contact with all or any of these
market makers during periods of unusual price action.
"Whether or not there has been any contact with any of
these large traders or they have been in contact with
us, I couldn't tell you the answer to that," he said.
"From time to time with this large trader reporting
system, it does happen that it is possible to have
contact with these large traders. That is simply this
normal, routine stuff as well."