Published on Gold Anti-Trust Action Committee (http://www.gata.org)

Greenspan, Treasury playing games with gold

By cpowell
Created 2000-02-07 08:00

10:15p EST Monday, February 8, 2000

Dear Friend of GATA and Gold:

GATA Chairman Bill "Midas" Murphy tonight dispatched
this brief commentary to his subscribers at
www.LeMetropoleCafe.com [1] and graciously, again, has
allowed me to pirate his work to you.

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

* * *

By Bill "Midas" Murphy
www.LeMetropoleCafe.com [2]
Monday, February 7, 2000

My information over the weekend that Barrick Gold would
make an announcement today and that it would include
buybacks was right on the money.

Barrick made that announcement and still the gold
market dropped $8.50. I will do my best to try and sort
this out as simply as I can.

No matter how you slice it -- at the end of the day --
this market is explosive. As GATA's Chris Powell says,
today's setback was actually a gift. The market is
telegraphing us where it wants to go, and that is much,
much higher in price. Markets do not spike sharply
higher as the gold market has these past few months for
no good reason.

This is what Barrick had to say today in a Bloomberg

"Barrick Gold Corp., the world's No. 4 gold producer,
said it reduced the amount of gold it arranged to sell
forward by almost half in the fourth quarter, though it
remains committed to its hedging strategy.

"The Toronto-based company said the amount of
gold it sold for delivery later at prearranged prices
was reduced to 9.8 million ounces in the fourth quarter
from 18.8 million ounces at the end of the third

"Barrick also said it bought call options that cover
100 percent of its production from March 2000 to 2001."

To the great novelist and LeMetropole Cafe member
Arthur Hailey: I have a vintage red wine breathing on
the dinner table and several of us are toasting you
tonight. Congratulations on what you were able to
accomplish through your letter to Barrick Gold that
received so worldwide attention. A wink and a smile go
with that toast.

In addition to Barrick's announcement, Australia's
largest gold miner, Normandy Mining Ltd., said today it
had not entered into any new hedging contracts in
almost two months.

Anglogold announced today that is has been lightening
its hedge book during the past four months and would
continue to do so.

Agnico-Eagle today publicly confirmed its policy of not
selling any of its future gold production forward.

If all these producers were not selling forward and
Barrick covered a significant part of its hedge
exposure, who was selling last gold these past months
to keep the gold price below $290?

Time and time again the press said it was producer
selling. Midas said nonsense, and these announcements
prove me right. How often did you hear me say it made
no sense for the heavily hedged producers to remain so
short and that shareholder pressure would prevail, not
the least of which would arise from the Ashanti blowup?

From the very visible and widely quoted Andy Smith of
Mitsui in a Reuters comment today: "We have the
shareholders' pressure now, people power against
hedging that we did not have in October."

Andy, I know you disagree with a great deal of what
GATA believes, but part of that people power pressure
came about as a result of the GATA army and some of our
tactics, like the surprise fax attack on the big
hedgers at the Denver Gold Group Conference in October.

TV commentary today said Barrick's announcement was a
disappointment. That, TV said, is why the market went
down. How so? For few people even knew that Barrick was
going to make an announcement.

If a birdie had said last week that Barrick was
covering half its hedges in some manner, accompanied by
all these announcements by other major gold producers,
almost anyone would have said the price of gold would
be streaking for the moon by now.

There is only one explanation why gold is not $350 or
$400 bid now. It's clear as day. Some sector of the
United States government and a small clique of bullion
dealers will not let it take its natural course, so
they (or clients they advise) are massively short and a
sharp rise in the gold price would devastate their
manipulation game, causing economic ruin to some.

The producers are buying, or at least not selling. The
open interest on Comex went up 10,000 contracts, which
suggest that the specs have come in on the long side.

So who is keeping the price of gold from exploding?

Who has been selling these past months while the
producers buy back their shorts or deliver into their
hedges, thereby reducing selling pressure?

The lack of producer gold supply pressure is why
the least rates sank to the lowest levels in memory
these past months. Interestingly, they shot up today,
with the one-month rate doubling overnite to .85
percent, which is still low.

In earlier emails today www.LeMetropole [3] Cafe.com was
extremely pleased that we were able to bring you a
window into the mind of Frank Veneroso, who I believe
understands the gold market's fundamentals better than
anyone else. Each of his clients pays him $8,000 per
year for that window. He can grasp the big picture and
the essence of what is going on behind the scenes in a
market better than anyone I know. I have seen Frank win
the day again and again over the last 21 years.

If you have been able to read his commentaries, you
know how bullish he is and why. (Frank believes that
the natural equilibrium price of gold is $600 per
ounce.) You also know that we agree a powerful is
trying to hold the gold price down. Yes, MANIPULATING
the gold price to suit its interests.

The respected broker Keith Goode of Bell Securities
in Australia told Reuters today, "Everyone's trying
to work out just why gold is running up."

Cafe members know why! We also know the free-market
gold price is hundreds of dollars higher than the price
gold is being ALLOWED to trade at.

The producers are covering (or not selling), the
European central banks are restricting selling, the
specs are going long. So it is of the highest
probability that certain bullion dealers and a segment
of the U.S. government, desperate to hold down gold, is
doing the dirty deed of capping that price.

In my opinion, a financial scandal of epic
proportions will be revealed in the not too distant
future because so many people in the gold industry have
been made to suffer at the expense of a faction of the
U.S. government and a cabal of bullion banks in New

Long-time Cafe members: Remember "Scandale Gold"
written 15 months ago. Little by little that
"scandale" is surfacing.

Bottom line: I love the junior, smaller gold companies.
But even the seniors are a steal as the XAU at 65 plus
is not that far off lows with gold ABOVE $300. Wow,
even Rodney Dangerfield would be embarrassed at the
lack of respect the shares of gold companies get today.

That will change. Buys of a lifetime are staring
at us in the face.

By the way, if you check the last gold spike, in late
September, you will notice that the market sold off
after its first big runup, as it did today, and then
roared up to make new highs at $339 basis the lead
futures contract.

Peter Munk, chairman of Barrick Gold, will be on CNBC
Tuesday morning.

Sweet dreams.

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