Gold Editorials & Commentary

Final Part

Birth of the Euro

Inversion strategies. .

It was a particularly unsettled and ominous week for the financial markets.

The price of gold exploded on Friday (02/04/00) when Placer Dome announced that it was planning to stop its hedging program.

The final market top we have all been waiting for has arrived. The great millennial bear market, which remained elusive in scope and timing, is about to ravage investors with gut-wrenching violence. Is this a certainty?

[Note: The following is of a multi-part installment examining the debt phenomenon, based on the book,"A World in Debt," by Freeman Tilden.]

Upward price behavior ahead of the FOMC decision . .

“ [It] has helped to create a vast new audience of a magnitude which was never dreamed of… This audience, invisible but attentive, differs not only in size but in kind from any audience the world has ever known.

Gold is poised to make its second significant move to the upside in less than a year.

It was a bearish week on Wall Street as dislocations developed in the credit market and the stock market faltered. For the week, the Dow and S&P500 dropped 3%.

We turn our attention now to an examination of the long-term outlook for gold prices. This is a subject of great importance since it concerns not only many of our favored investments, but more importantly, the state of health of the world economy itself.

Background

Four features that can be used to distinguish a bubble, were discussed in Parts 1 and Part 2. These are:

A defensive market was the call . . . again for Wednesday action, and we weren't disappointed in the outcome.

Stock market action has been particularly choppy and disjointed, not atypical for option expiration week.

A little break in the Dow Industrials . .

At no other time in history has the supposedly almighty dollar been easier to come by.

Overview

Bonds – nearing an intermediate-term low.

Stocks – nearing a major top. A severe correction is likely to commence very soon.

The gold market has just completed the trough phase of its latest cycle and is due for a rise in the coming days, based on our cycle analysis.

A "Coming of Age" . . by the Internet, likely summarizes much of what the Street is fearing now, as suggested immediately here in the wake of the largest "new & old media" merger Monday.

The purpose of this report is to correlate the inter-relationship between Gold, Interest Rates and Commodities.

Look out, gold bugs! The attack upon the precious metal is going to escalate. Your metal mettle will be tested.

The headline in my January 2000 issue, which is scheduled to go to press this coming Monday is " Enjoying the Party and Getting Home Safely".

1999 was a successful year for the Tocqueville Gold Fund, which produced a return of 20.6% compared to a negative 7.8% for the benchmark Philadelphia Stock Exchange Gold/Silver Index, an outperformance of 28.4%.

Snapback behavior could not be sustained . .

The extraordinary two-tiered market we have witnessed for the past three months continues to astound market neophytes and long-time observers alike. We ourselves must confess we've never seen anything quite like this.

GENERAL COMMENTS: A decade ago most Russians would have regarded all KGB agents as thugs. Now it looks as though one of them, Prime Minister Vladimir Putin, hand-picked by Boris Yeltsin as his successor, is about to ascend to the presidency.

Today was day 43 in what continues to be an historic period of absolutely destructive speculation.

It would seem appropriate for a review, at this, the dawn of a new calendar age.

"We learn from history that we do not learn from history."

Dr. Milton Friedman, Nobel laureate in Economics