Gold Editorials & Commentary

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

Sector shifting from the NYSE to the NASDAQ market . .

The 4th quarter market action was simply amazing. Despite some of the most aggressive valuations in financial history the popular high-tech stocks and indices rose in breathtaking fashion. It's hard to know what to make of something like this.

The absence of an international monetary order rooted in gold makes the century now ending unique. Professor Robert H. Mundell emphasized this point in accepting the 1999 Nobel Prize in Economics a couple of weeks ago. See R. L.

Murphy's Law will be at full strength when the clock strikes midnight on Friday. For the guidance of investors and market-watchers, here are my predictions of the top U.S. news stories in 2000 as Millennial insanity threatens to lurch into high gear:

Holiday focuses . .

I would like to dedicate my end of the millennium crystal gazing to the Gold-Eagle Forum, its managers and faithful contributors, to Harry Schultz, Frank Veneroso, Bill Murphy, Ted Butler and the many others, who are doing so much to bring present on-goings in

Introduction

The manipulation continues unabated. The Dutch central bank has announced it intends to sell 300 tons of its gold reserves over the next five years. Nederlandsche Bank will sell 100 tons initially and then 200 tons over five years.

In the 1970's a very courageous gentleman named Edward Durrell claimed that substantially all of the US Gold Reserve being stored at Ft. Knox was gone. Only 1,000 tonnes or so of the 8,500 tonnes supposedly being stored there remained.

Huge, almost neurotic, volume and swings . . . are in harmony with our call for Wednesday's action, but belie the underlying nervousness that increasingly is prevailing in the stock markets.