Front - although I am usually more than happy to take whatever credit comes my way I cannot, in all honesty, except the praise accorded to me in your recent post. The forecasts you referred to were extracted from info received from Princeton Economics. I generally try to state the source of my information - in this case I obviously forgot. My apologies.

BTW, I tend to rely on fundamental analysis only and take long term positions as I believe it is impossible to predict short term market movements with enough reliability to build substantial wealth. How Princeton is able to do so well for their clients ( including myself ) through the trading of futures and options is a complete mystery to me.

TTFN, Milhouse

To : Vieserre

A Special Report on gold and silver issued by Princeton in Jan 97 stated that critical support for gold was in the 325-331 price range and that gold would likely test this support in 1997. Further info issued in May stated that the most likely timing for a low in gold was early July ( ideally the week of the 7th ) or Q1 1998. If we get a monthly close on spot gold below 334 AND penetration of 320 AND a yearly close below 341, then the low in gold will be during Q1 98 in the 255-275 area. I should receive some more info from Princeton next week and will post a summary of their forecasts.

Note - Martin Armstrong is very bullish about the medium term prospects for gold, but is very negative on silver. He refers to silver as the commodity from hell and sees a greater probability of $3.25 before $6.00. He has been calling for gold to decline ahead of silver for some time with gold then recovering and the gold/silver ratio going over 100 during 1998.

My own opinion is that the fundamentals for silver are worse than those for gold. Digital cameras will take a significant amount of the market and this may be why large commercial buyers of silver are not concerned about falling inventories. Also, silver does not have the huge volume of forward sales above the current market which will be covered on a rally. There are many gold forward sales contracts which were established at prices above $400 and which would be closed out to continue the forward momentum of any substantial gold rally. Additionally, silver is not widely accumulated as money anymore and would not benefit to the same extent as gold with a loss in confidence in paper money.

Best regards, Milhouse

I had just posted my agreement with NotaGOldbug about the supply demand thoughts and went back and there you were saying I was wrong! Well actually, ( :- ) you said he was incorrect and therefore by extension, I was wrong. NOT! ( :- ) You're right of course about the car companies not being shorted like the Gold market is at the moment. The problem is for me, that the two markets are totally separate. From the point of view of the creators ( companies ) of cars/gold etc. if there is too much output and nobodies buying, then the production line stops until the market catches up with the goods already produced. Of course they can't short the items already produced since that would entail taking back already produced goods from the market and would be most uneconomical. They also cann;t reduce production below zero so that also would back you feelings of non-shorting the items. When you refer to shorting though, we're talking about a different area. We're talking about the feelings of people about the future of a company. Sure we can sell Ford short ( and sometimes when my Taurus stops working, I will! ) and we can also sell Barrick Gold short of course. But that still doesn't eliminate the necessary distinction between the items price of conceivement and the wantings of individuals taking a flier in the stock market re shorts. Two different worlds I would venture to say. Is it possible we're both right?

TTFN

Donald ( @Home ) :

BRAVO!

nuf said.

The Markets....

Alan, mid -air refueling is ok with fighter jet but... what do we do with our hot air balloon ?

Well Rubin better to find a trick before it hits the fan...below.

COMMENTS OF THE DAY: Commodities, including precious metals, were lower on Thursday, with gold hitting the remaining sell stops and facing a frenetic new round of speculator short selling to briefly touch $323 per troy ounce, its lowest level since early December 1985. For the day, gold futures were down $7.10, with silver dropping 7.5 cents, platinum lower by $2.00, and palladium declining $1.50. Australia has reduced its official gold reserves from 247 tonnes to 80 tonnes, and has declared that it is done with its gold selling. Since COMEX gold futures open interest data for today's trading will not be available until Monday, it cannot yet be officially established, but it is likely that the commercial net long position is the highest ever and that the speculator net short position is also a record. Since the market was created for the benefit of the commercials, they will have the final decisive say. Gold mining shares were only slightly lower as the implications of the inevitable speculator short covering become increasingly apparent. Nearly unanimously bearish analysts' commentary combined with heavy gold equity put buying is also continuing to provide support for the shares.

Question: What do you do when fake gold watches are worth more than real gold watches?

I reckon that a visit to Asia and buy all fake things you can because the world has gone insane and they will soon be worth more!!!!!!!!

Oh yeah, my gold stock did not drop any from yesturdays king hit mmmn ?

Eventually they'll print so much that inflation will start to consume peoples life savings. Now most people are not fools. When they see their saving becoming worth less and less due to inflation they'll trade their cash in on something that will hold it's value ( gold, silver, etc ) .

Basically it all boils down to whether you trust politicians or not. I do not.

So let the bottom fall out of the price of gold. I'll still be buying it as fast as I can.