THE WINDY CITY TRADER

P.O. Box 1673, Chicago, Illinois

(December 2, 1997) METALS: PRECIOUS METALS–Believe it or not, gold may be getting close to a bottom. The market has dropped on a number of factors. One key factor contributing to the downdraft were rumors of central bank selling of gold on the world market. The World Gold Council however has a different version. They claim that the market is artificially oversold due to the central bank rumors. They have stated (facts do back it up) that this past quarter saw record demand for gold at 705.3 tons. You may want to hold off on any futures contracts but an April or June call option might be a way to probe this market. The silver market however is a total opposite scenario. There is absolutely no fundamental basis for its recent rally. It has moved higher on an artificial tight supply situation. Look for a continuing drop back to $4.75 in silver. Soon!

Stephen Connell and William Frejlich

Consensus National Futures and Financial On Line Index

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