Vital analysis of impending gold, silver booms

Section:

7:55p EDT Sunday, October 3, 1999

Dear Friend of GATA and Gold:

From this further dispatch from the Karachi newspaper
Dawn, it seems that the suspension of the gold market
there is due to the bankruptcy of the forward sellers
and that they are looking to be bailed out. My guess is
that they called the Federal Reserve in Washington but
Alan Greenspan was already on the phone, arranging a
similar bailout for former Treasury Secretary Robert
Rubin's old firm, another big gold short, Goldman Sachs.

Any GATA members in Kentucky? Keep an eye out
for any tractor-trailers around Fort Knox.

Today Karachi, tomorrow ... the world?

Please post this as seems useful.

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

* * *

Trading in gold remains suspended

By A Staff Reporter

Dawn

KARACHI, Oct. 2 -- Forward trading in the local bullion
market could not be resumed after about a week's
suspension as the traders failed to reach a settlement
on the pricing formula.

The office-bearers of Karachi Sarafa Jewellers Group
(KSJG) have been in session on Saturday to reach an
amicable solution with a view to resume trading but
failed to reach a positive outcome.

A spokesman of the KSJG said that another meeting will
be held on Monday so that trading can be resumed either
on the same day or in the same week. The Group last
quoted the official rate at Rs 4,732 per 10 grams on
Sept 25, 1999 and till then the forward trading in
bullion market has been in turmoil owing to spiralling
international prices.

Sources said that bullion traders are not inclined to
disclose the actual reason of suspension in trading
since last one week.

In the meantime, a massive heart attack led to the
death of a senior bullion dealer who could not sustain
the shock after suffering heavy losses in forward
dealing.

Some dealers, market sources said, were optimistic that
international prices would come down but their
anticipation proved wrong and the prices touched above
$300 per ounce from $255-260 per ounce in the last 20-
25 days, resulting in huge payment default.

These sources said that outstanding payments have
reached over Rs two billion from the blank sale of gold
but the amount is too high to clear by the defaulters.
There is no immediate confirmation of the actual
default figures. "This is for the first time in the
history that physical trading has remained suspended
for a week in a row just to bail out some of the
speculators who refused to follow the rules of the
trade," they added.

Suspension in trading has caused a stir in the gold
market and the traders have resorted to quoting higher
prices on their own, ranging between Rs 5,500-6,200 per
10 grams.

A bullion dealer said that skyrocketing prices have
affected the sales in the jewellery shops and buyers
are anxiously waiting for the price fall.