[NYTr] Citigroup gold report getting around; MineWeb disparages BoE gold quality issue

[All the News That Doesn't Fit]

Gold Anti-Trust Action Committee - Oct 1, 2007
http://www.gata.org

Citigroup gold report getting around; 
MineWeb disparages BoE gold quality issue

Citigroup's market research report acknowledging that central banks
have been manipulating the gold price is rapidly gaining attention
in the investment world.

The latest recognition comes in an essay titled "Why Should You Buy
Gold?" at MoneyWeek.com by John Stepek, who writes:

"In the absence of a reliable paper money to take up the baton of
world reserve currency, the prospects for gold only look better and
better. And it seems central banks know it. Central bank bullion
sales earlier this year were 'clearly timed to cap the gold price,'
reckon [Citigroup's] Hill and Wark. That's the kind of conspiracy
theory chatter that has had gold 'bugs' of all stripes condemned
as unhinged for years -- and yet now it's coming from a major
investment bank.

"Why would central banks fear a strong gold price? It's simple. The
gold price is essentially an indicator of confidence in paper money.
The higher it is, the less confident people feel about the worth
of their fiat currency. And if people lose faith in paper money,
then effectively they're losing faith in our entire economic system.
When you think about it like that, you start to see why central
banks might want to keep a lid on the bullion price."

You can find Stepek's commentary here:

http://www.moneyweek.com/file/35758/why-should-you-buy-gold.html

Meanwhile, MineWeb's Lawrence Williams contends that the problem
encountered by the Bank of England in meeting the "good delivery"
standards for gold at the London Bullion Market Association is a
"storm in a teacup" and "an irrelevance."

GATA will disagree, considering the issue evidence that the Bank
of England, a big seller of gold, is running out of the better stuff
with which it can manipulate the market -- which is not to say that
the bank has run out of all gold or that the troublesome gold can't
be melted and refined into deliverable grade.

After all, the gold quality issue would not have come to the attention
of the LBMA and then the attention of the world if the bank had not
tried  to push the inferior metal into the market and if enough
other central bank gold necessary to the central bank price-suppression
scheme had been available.

But at least Williams acknowledges that the central banks "are
perceived to be manipulating the gold market" to keep the price
from rising and that many monetary authorities "regard gold as an
anomaly which should no longer form a part of world currency
reserves."

You can find Williams' commentary, "Storm in a Teacup over Central
Bank Gold Holdings Quality," at MineWeb here:

http://www.mineweb.com/mineweb/view/mineweb/en/page33?oid=37636&sn=Detail

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

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