Blog

July 26, 1999 – In Letter No. 246, ‘Is Gold Cheap and therefore Good Value?’, I presented a detailed case that Gold is cheap and good value, and that it should therefore be accumulated. My analysis and conclusions resulted in many questions and comments from readers, which I would like to address. In doing so,Read more

July 12, 1999 – One of the most basic axioms of trading and investing is that every market has a story to tell. Traders, generally speaking, need to know what that story is telling us about the short-term prospects for a market. In contrast, investors are more concerned by the longer-term implications of that story.Read more

June 28, 1999 – The price of Gold ended Friday at $260.40. One year ago the price was $293.80, so over the past twelve months Gold has lost $33.40, or 11.4% of its purchasing power. However, this simple calculation tells only part of the story about the change in Gold’s purchasing power. During the pastRead more

June 7, 1999 – Many things in finance and economics are counter-intuitive. In fact, many things in life are counter-intuitive. For example, when standing on a beach and looking out over the ocean toward the horizon, the earth really does seem to be flat. It takes a discerning individual to ferret out the truth aboutRead more

May 17, 1999 – For months it has been my contention that central banks are manipulating the Gold price. More proof came on May 7th. The British government, through the Bank of England, announced that it intends to dishoard 415 tonnes of its 715 tonne Gold reserve. In contrast to the other governments(e.g., Belgians, Dutch,Read more

April 26, 1999 – In the last letter I laid out the case that Gold in recent years was being increasingly mobilized. It is being borrowed today in weights never before imaginable, and by implication, it is also being loaned today more frequently than ever before. The desire by mining companies to sell today aRead more

April 12, 1999 – If you could borrow Dollars at 1% and invest them in another asset (e.g. T-Bills) yielding 4%, would you do it? Of course you would because there is very close to no risk in this transaction. As long as the federal government continues to pay you the 4% interest you areRead more

March 22, 1999 – In the last Letter I wrote that it is the physical market that drives the price of Gold, not the other way around. The paper market for Gold, namely, futures, options, etc., is not the most important factor determining the Gold price for the simple reason that the longs can askRead more

March 1, 1999 – Every once in awhile there is some heated discussion and contentious debate within the Gold market about the relative impact on the price of Gold by two opposing forces. We are at one of those times. On one side of the equation are the speculators, who generally deal in the paperRead more

February 8, 1999 – Several months ago I put forward a very simple proposition. In Letter #233 (“Grist for the Conspiracy Theorists”, October 26, 1998), I first speculated that central banks are attempting to control the Gold price, and then explained analytically the reasons why they may be pursuing such an activity. I also providedRead more