Commodity Watch:


The Financial Express, New Delhi
Monday, March 14, 2005

http://www.financialexpress.com/fe_full_story.php?content_id=85174

By Our Commodities Bureau

MUMBAI, March 13 -- The price history of the last boom in
commodities suggests that gold now should be priced
between $591 and $647 per ounce even without adjusting
for the dollar's loss of purchasing power in the last 25
years.

According to the Gold Anti-Trust Action Committee (GATA),
considering the price comparison of gold with the
Commodities Research Bureau (CRB) Index, the gold price
is much lower than it should actually be.

Gold's failure to keep up with exploding commodity prices, as it did during the last commodities boom in 1980, is more powerful evidence of surreptitious intervention by central banks in the gold market, GATA said in a press release.

Drawing on the work of its consultant, Dan Norcini, a
futures trader in Houston, GATA compared 1980 monthly
closing levels of the Commodity Research Bureau Index
with the monthly closing spot gold price at the time.
The last five months of 1980 were the only times prior
to this year when the CRB Index was above 300, GATA
said.

The lowest gold price during these months was $591.30,
and that price was registered as the CRB Index and was
falling in response to an increase in interest rates
arranged by the Federal Reserve Board to attack
inflation.

Every other time in 1980 when the CRB Index was above
300, GATA said, gold was above $600 per ounce, more
than $150 above where gold is priced today. Wednesday's
close on the CRB Index was 313.70 but the London PM
spot gold price was only $437.25 and the New York Comex
gold price was only $441.10.