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More attention from The Globe and Mail for Sprott report on price suppression

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  • GATAComm@aol.com
    Gold Slips on Lower Oil, Firmer U.S. Dollar By Wendy Stueck The Globe and Mail, Toronto Wednesday, August 25, 2004
    Message 1 of 1 , Aug 26, 2004
      Gold Slips on Lower Oil,
      Firmer U.S. Dollar

      By Wendy Stueck
      The Globe and Mail, Toronto
      Wednesday, August 25, 2004

      http://www.theglobeandmail.com/servlet/ArticleNews/TPStory/LAC/2004082
      5/RGOLD25//?query=gold+slips+lower

      VANCOUVER -- Gold retreated from
      four-month highs yesterday as a
      lower oil price and a firmer U.S.
      dollar appeared to break the
      metal's momentum.

      "What we have is a slightly weaker
      oil price, coupled with a slightly
      stronger dollar and equity markets,"
      said James Steel, assistant
      vice-president with Refco Group
      Ltd. LLC in New York. "And the
      combination has hit just when it
      would not be unusual to see some
      profit-taking."

      Gold futures for December delivery
      fell $7.80 (U.S.) or 1.9 percent
      to close at $405 an ounce on the
      Comex division of the New York
      Mercantile Exchange. The December
      futures contract hit a four-month
      high of $416.80 on Friday.

      Even as gold gave up some of its
      recent gains, a well-known Canadian
      fund manager released a report
      alleging that the gold market is
      manipulated and that the metal
      would trade at much higher prices
      if prices were not deliberately
      tamped down by governments and
      central banks.

      In a report entitled "Not Free,
      Not Fair: The Long-Term
      Manipulation of the Gold Price,"
      John Embry, chief investment
      strategist for Toronto-based
      Sprott Asset Management Inc.,
      and research associate Andrew
      Hepburn say they agree with gold
      market commentators who believe
      the gold price is "actively
      managed."

      The report echoes opinions put
      forward by the Gold Anti-Trust
      Action Committee, a group formed
      in 1999 to lobby against what it
      describes as "illegal collusion"
      in the gold market.

      Among the new report's conclusions:

      The world's central banks intervened
      in the late 1990s to prevent a gold
      derivatives crisis that threatened
      the stability of the global financial
      system, and the U.S. Exchange
      Stabilization Fund and Federal
      Reserve Board have been active in a
      scheme to depress gold prices.

      Such opinions have been routinely
      put forward by GATA, and just as
      routinely shot down by gold
      producers and financial experts --
      a reality acknowledged by the
      report's authors when they write:
      "As significant gold owners
      ourselves, we firmly side with the
      alleged lunatic fringe on this
      contentious topic."

      Mr. Embry manages the $272.3-million
      (Canadian) Sprott Gold and Precious
      Minerals Fund.

      In addition to alleged price
      manipulation, another common theme in
      current gold market commentary is the
      role of the U.S. dollar and the United
      States' twin deficits -- the budget
      deficit and the current account deficit.
      This theme holds that rising deficits
      in the United States, along with
      political jitters and rising oil
      prices, bode well for gold.

      In a recent report, John Ing of Maison
      Placements Canada Inc. said foreign
      investors, including China, are likely
      to reduce their holdings of U.S.
      dollars and increase their stores of
      other major currencies and gold.
      "Don't look now, but gold is rising,"
      Mr. Ing said in his report. "To repeat,
      $510 an ounce is only an interim
      target."

      A recent update by the industry-backed
      World Gold Council focused primarily
      on consumer demand, highlighting
      strong jewellery sales in Asia in the
      second quarter. The council's chief
      executive officer, James Burton, said
      the council's activities have helped
      boost jewellery demand in major
      markets. About 2,600 tonnes of gold
      was mined last year around the globe,
      the council said, while gold scrap
      added 945 tonnes to total supply and
      central bank sales accounted for 617
      tonnes. Consumer demand, including
      jewellery, was 2,804 tonnes last
      year, the council says.

      Earlier this year, U.S. lobby groups
      Earthworks and Oxfam America launched
      "No Dirty Gold," aimed at changing
      consumer opinions about gold. Industry
      players dispute the campaign's claims
      about waste and gold mining's impact
      on indigenous people.

      The S&P/TSX gold index fell 4.45
      points yesterday to close at 193.61
      on the Toronto Stock Exchange.

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