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11p EST Thursday, December 2, 1999

Dear Friend of GATA and Gold:

Here's tonight's "Golden View from The Tower" at

Gold Anti-Trust Action Committee Inc.

* * *

The GOLDEN VIEW from The Tower

December 2, 1999

Traders and analysts are still attributing gold's
present weakness to a lasting sense of disappointment
over the UK auction held Monday, which was over-
subscribed by 2.1 times instead of the eight-times
level from the September auction.

Gold's $4.50 fall today occured while London was still
in session in overlap with New York. Reuters' London
market review quoted some dealers offering an

"It was fund long liquidation which has taken us down.
It came down through support at $286 and I think a few
stops were hit. It is just some stale fund long

Another dealer said, "There has been selling and I
think those people who bought it (before the auction)
are getting stopped out," while an analyst added that
this consolidation period in the wake of the third UK
auction is "being characterized by professional
disenchantment and consumer bargain-hunting."

More bargain hunting in all the wrong places?

It seems that value shopping has become a lost art.
Propelled by its fourth largest point gain in history
(99.07) on the seventh heaviest volume, the Nasdaq
Composite reached a new record by 5 points, last set
the day after U.S. Thanksgiving. The
suggested that it was "momentum players and daytraders
piling into Nasdaq stocks" that were largely
responsible for tech stock gains today.

Are these values stable and justified on sound
principles? Jay Suskind, head of institutional equity
trading at Ryan Beck, said, "It's momentum, momentum,
momentum. People don't want to miss the boat."

OK, so can another man on the scene offer more peace of
mind about the stock markets? We don't gain much
confidence from the words of Louis Todd, head of
equities trading at J.C. Bradford. "The Nasdaq is just
unbelievable. People are scratching their heads, 'How
far can these things go?'"

And finally, from Reuters we get a quote from James
Melcher, president of Balestra Capital, "No one seems
to be worried about anything. Inflation is moderate,
production growth is excellent. The country is growing
at a pretty good rate. The problem is: Markets are
supposed to look ahead. Happy days are here. It is late
in the party, though. (Investors) have lost all
hindsight. I just hope the party keeps going."

We're sure that will do it, James....Hope. (Sarcasm.)

Today's surge in home sales reported on earlier helped
inspire deeper losses for the long bond, losing 9/32 in
price to lift the yield to 6.316 percent. Treasury
market participants are also apprehensive about
tomorrow's November employment report. A consensus of
economists forecasts an increase in November payrolls
of 210,000 (down from October's 310,000 gain) and a
steady jobless rate of 4.1 percent. Earnings are
expected to maintain a trend at 0.3 percent gains.
Traders are not optimistic. "Any relief rallies should
be sold, still," a noted trader told Bridge News. "I'm
still negative, I still think we're going to higher

Back to gold.

Spot prices ended the day in New York at $284.70, down
$4.50, while the COMEX February futures lost $4.80 to
settle at $287.10. FWN attributed today's price decline
to the dollar's strength against the other major
currencies (yen excluded). As the dollar climbed versus
these other currencies, gold becomes more expensive
when priced in these other currencies, weighing on new
purchases and encouraging sales in those affected
nations. Heavy sales were noted by trades coming out of
Australia in particular.

As for today's COMEX totals, the significant but brief
recap is that an additional 237,100 ounces were added
to the previous two days of accumulated delivery
intentions, bringing the total that will be changing
hands to 602,900 ounces. Toward that end, 64,236 ounces
of new gold was added to COMEX registered stocks.

As for oil....

January crude continued its solid recovery from the
early-week selloff, settling up 82 cent at $25.82.
France has thus far failed in its efforts to push
forward a six-month rollover of of the Iraq oil-for-
food deal, but the United Nations is adopting instead a
one-week extension effective Sunday. Iraq's U.N.
ambassador Said Hasan said, "We will reject a week
immediately." Iraq would also continue its halt on oil
exports for at least another week, extending from the
halt on November 25 during Baghdad's rejection of an
earlier two-week extension proposal. One broker was
quoted by FWN: "If we know Iraq is going to keep
rejecting an extension, that's 2 million barrels per
day that are going to be desperately missed by the

On another front, Venezuela Energy and Mines Minister
Ali Rodriguez indicated that OPEC is 85-86 percent
compliant with its agreements on output cuts. He said
he wasn't worried about cheating, and boasted that
Venezuela had the highest compliance level at 98.7
percent. Confirming OPEC's commitments to curb supply
is an early report from Bloomberg that compliance in
November has improved to 90 percent, up from their
figure of 84 percent in October.

Higher oil is upon us. The Y2K proving ground is one
month away. The Fed is daily replacing lost reserves
from the banking system. The stock market is as
precarious as it ever has been. U.S. bonds aren't
getting any more popular with yields above 6 percent.
The dollar is seemingly at the mercy of continued
Japanese intervention to weaken their own currency and
prop the dollar. The euro share of new-issue
international bonds for the first half of 1999 was near
equivalent to the levels enjoyed by the mighty dollar.

And speaking of that mighty dollar, when translated
into history through the German mark, the dollar is now
at its highest level against this European benchmark
currency in more than 10 years ... since September
1989. With 291 million people living in the 11-nation
euro-zone, compared with 269 million people in the
United States, euroland GDP in 1997 of 5.55 trillion
euros compared with 6.85 trillion euros for the United
States, a second-quarter euroland annualized growth of
1.5 percent compared with 1.9 percent in the U.S., and
a key refinancing rate at 3 percent in euroland
compared to the Fed's key rate at 5.50 percent, you can
be sure that our peer group across the Atlantic will
continue to work for a level playing field as
currencies are concerned.

How does the future shape up? They have over 12,000
tonnes of gold while we have over 8,000 tonnes. They
will be adding a host of countries to their currency
union, while the United States has mildly entertained
the dollarization notion with Argentina.