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Will the real Goldman Sachs please sit down?

Section: Daily Dispatches

4:56p ET Wednesday, May 29, 2002

Dear Friend of GATA and Gold:

GATA's friend John Hathaway, manager of the
Tocqueville Gold Fund (TGLDX), has just published
at the Tocqueville Internet site a wonderful new
essay that complements the recent essay by
Robert K. Landis about Barrick Gold at, and echoes what you
have been hearing from GATA Chairman Bill

An excerpt from Hathaway's latest:

quot;What is happening in the gold market currently is
that the hedged mining companies, after having taken
a pasting in the form of share underperformance and
vocal criticism from the investment community, are
beginning to capitulate. Recently, Durban Roodeport,
a South African mining company, raised cash through
a new share issue. The use of proceeds was to
purchase gold on the open market in order to close
out its hedge book. Other miners have been quietly
writing puts at strike prices below the market, in the
hopes that they will become long gold on pullbacks.
However, the proliferation of puts only serves to put
a floor beneath the market. Several prominent
hedgers, including Anglogold, have reduced their
hedge books and numerous others have stated that,
at the very least, they will not increase their hedge
books and are in the process of reviewing their
hedge exposure. The intellectual case for hedging
appears to be in tatters and there appear to be very
few who would advocate it vociferously. The recent
rise in the gold price has all the appearance of a
slow-motion short squeeze, which could well get out
of hand if too many rush for the exits.quot;

You can find Hathaway's essay here:

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CHRIS POWELL, Secretary/Treasurer