You are here

Gold near a bottom? Ask the Western central banks

Section: Daily Dispatches

9:20p ET Monday, August 11, 2008

Dear Friend of GATA and Gold:

Your secretary/treasurer remarked last year at a meeting of the Committee for Monetary Research and Education that if a worldwide nuclear war broke out and only one financial market in the world was still functioning in a city that had escaped destruction, what remained of the U.S. Federal Reserve and Treasury Department would find that market and sell promises of gold, and gold would go down, at least for the day, lest any financial market people who had survived the war think that anything was wrong:

http://www.gata.org/node/5057

The war between Russia and Georgia isn't nuclear but it's a pretty good one with disturbing implications, including implications for the world's energy supply -- so of course today oil joined gold in declining.

Who is selling all that gold, or promises of gold? Apparently it's not the gold mining companies. Quoting Gold Fields Mineral Service, Mining Weekly reports that gold hedging by mining companies is at its lowest level in 20 years:

http://www.miningweekly.com/article.php?a_id=140413

The carnage in the gold market has drawn Resource Investor's Gene Arensberg away from vacation to produce a special edition of his Got Gold Report, which examines the panic and is headlined "Gold Near a Bottom?" If the question is more than rhetorical, it might best be put to a few Western central bankers, whose crucial meetings and records, unfortunately, are seldom public. In any case you can find Arensberg's report here:

http://www.resourceinvestor.com/pebble.asp?relid=45229

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

* * *

Join GATA here:

Hard Assets Investment Conference
Tuesday-Wednesday, September 9-10, 2008
Mandalay Bay Resort and Casino, Las Vegas, Nevada
http://www.iiconf.com/

Silver Summit
Thursday-Friday, September 18-19, 2008
Best Western Coeur d'Alene Inn
Coeur d'Alene, Idaho
http://thesilversummit.com

New Orleans Investment Conference
Thursday-Monday, November 13-18, 2008
New Orleans Marriott Hotel
http://www.NewOrleansConference.com

* * *

Help Keep GATA Going

GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at http://www.gata.org/.