Why are gold and the gold shares running so well amid a general market rally?

10:28p ET Sunday, June 15, 2003

Dear Friend of GATA and Gold:

While the financial world speculates about gold,
GATA consultant Reg Howe once again digs
out the source material and reports the facts.

In his new commentary tonight, titled quot;Not
Your Father's Gold Market,quot; Howe analyzes the
latest figures on gold derivatives as reported
by the Bank for International Settlements and
the U.S. Treasury Department's Office of the
Comptroller of the Currency.

He concludes that gold derivatives -- paper gold,
promises to pay gold -- are exploding even as
mining companies are sharply reducing their
hedging positions.

Howe writes: quot;At over 30,000 tonnes, total gold
derivatives are now approximately equal to total
reported official gold reserves. Yet, although the
data on gold derivatives reported by the BIS
represents the only publicly available information
compiled on the global gold market according
to a published methodology by a presumably
reliable source, neither the World Gold Council
nor Gold Fields Minerals Services appears to
make any effort to try to reconcile their statistics
on global gold flows with the BIS figures.quot;

There's only one way to read the data: That the
central banks have thrown most of their gold at
the market in a desperate effort to suppress the
price, to channel investment demand for gold into
paper gold rather than the real thing, and to
prevent people from escaping the bank-controlled
paper economy, and that the banks don't have
much gold left.

Howe's new commentary is bound to be the most
important examination of the gold market for
some time. It is admirably complemented by
charts drawn by GATA consultant Mike Bolser.
It is the antidote for the disinformation that
surrounds the gold market. You can find it at
Howe's Golden Sextant Internet site here:

a href=http://www.goldensextant.com/commentary25.html#anchor168813http://www.go...

Or try this abbreviated link:

a href=http://ls.shapebyforce.com/sbf/203http://ls.shapebyforce.com/sbf/203/a

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

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