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Black Box Forecasts salutes Midas Murphy
10:10p EST Friday, February 4, 2000
Dear Friend of GATA and Gold:
Here's some brief but delicious news and commentary
dispatched tonight by GATA Chairman Bill quot;Midasquot;
Murphy to his subscribers at www.LeMetropoleCafe.com.
Please post this as seems useful.
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
* * *
By Bill quot;Midasquot; Murphy
Friday night, February 4, 2000
The Cafe is loaded with plugged-in members as to what
is going on behind the scenes in the gold industry. They
live in South Africa, Australia, Canada, and Europe,
as well as the United States.
One is close to Barrick Gold and has been giving the
company untold grief about its excessive hedging. He
was the one who told me about Barricks survey of
buy side/sell side analysts and that Barrick had put out
a powder-puff version of the results; that is, the results
were a great deal more negative toward the companys
hedging than it let on.
As I reported today, Placer Dome is curtailing its
hedging activities to some degree. This announcement
was a HEADLINER. Another one MIGHT come Monday.
For this Cafe member tells me that he understands
that Barrick Gold is will announce that it will not be
rolling over its hedges as it has been doing for a
zillion years. Instead Barrick will deliver gold into
them as they expire.
That means is that Barrick will no longer be selling
into the gold forward market!
First Placer, then Barrick, if our info is correct.
Will the Australians be far behind, or will they be
asleep at the switch?
This is very very bullish news. The bullion dealers can
no longer feed the press with their usual
disinformation that it is producer selling that is
holding down the gold price. That kind of market
pablum talk is history.
The Gold Anti-Trust Action Committee has been urging
producers to take this sort of action for months now.
We have been saying it makes no sense for producers to
be short the gold market now. GATA told producers that
they were shooting themselves in the foot by hedging so
much, that if they did not show belief in the own
product, who else would? They were turning off
investors for their shares.
The market agreed, as gold share prices have been
sinking like a submarine. Today the XAU finally
reversed course and rose 14 percent, much of that
rise coming AFTER the Placer news.
If Barrick gold does make this sort of announcement on
Monday, I propose that all of us Cafe members get a
glass of wine or champagne and toast Arthur Hailey,
the great Canadian novelist who sold all his Barrick
stock in protest of the company's hedging policies.
That came about because of GATA's request that
Internet gold share investors send faxes to Barrick
gold at the Denver Gold Conference last October to
protest the company's hedging policies and urge them to
cover their hedges. We called it quot;Tora! Tora! Tora!quot;
and we announced this suprise fax attack at exactly
7:50 a.m. on a Sunday morning as the conference was
starting. That time in the morning was when the
Japanese surprised the U.S. fleet at Pearl Harbor.
I did not even know that Arthur Hailey was a Cafe
member at the time. I was stunned when he sent me a
copy of the letters he had sent to Barrick Gold and to
Chris Thompson, chairman of Gold Fields, the world's
second-biggest gold producer. Hailey praised Thompson
for taking Gold Fields' stand against hedging.
Hailey stepped up to the plate and took action. It
caught the attention of the press outside the United
States and many highly regarded journalists reported
what Hailey had done and interviewed him.
As a result, Barrick was besieged by irate
shareholders. Many of them had read about Hailey press
and agreed with him. Hailey had been a Barrick
shareholder for many years.
Other shareholders began to sell. Barrick's share price
made 52-week lows yesterday.
One reason Barrick's share price did so well today was
that the rumor of this Monday announcement was
circulated among gold fund managers this afternoon.
If Barrick was going to cut back on its ridiculous
hedging policies, big-time investors wanted in on its
plentiful gold assets in the ground.
Monday will be an interesting day, to say the least.
But Hailey goes into the Gold Hall of Fame regardless
of what Barrick announces.
Placer Dome heard him loud and clear.
I will be toasting to you, Arthur, on Monday and
winking to you at the same time.