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Reg Howe: Gold derivatives -- options galore

Section: Daily Dispatches

1:30p ET Friday, November 30, 2007

Dear Friend of GATA and Gold:

Reginald H. Howe, proprietor of Golden Sextant Advisors and consultant to GATA, has reviewed the Bank for International Settlements' semi-annual derivatives report and finds explosive growth in gold options. Howe also notes that foreign-owned gold has started to be withdrawn from the the New York branch bank of the Federal Reserve.

So, in his new essay, "Gold Derivatives: Options Galore," Howe writes: "Both the explosion in gold options and the resumed exports of foreign-earmarked gold suggest that managing the gold price is becoming an ever-more-difficult task. No surprise, then, that gold prices have turned sharply upward during the second half of the year. However, the price managers still have one thing operating in their favor: the apparent willingness of hedge funds and other supposedly sophisticated large players to make their bets on gold through paper derivatives, not the acquisition of physical metal."

Howe's new essay can be found at Golden Sextant here:

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

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