Listening in on gold bugs gives clear signal that
In restaurants and clubs near Threadneedle Street in the City of London, men meet and whisper about the big buyers and sellers of the day; in Zurich, still other men confide to one another on the Bahnhofstrasse; and in New York city it's at such places as Michael I or Michael II. In all of the conversations, the subject is gold.Skip to next paragraph
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Always the same questions are asked: Who were the big buyers and sellers? Where will the price be tomorrow? What are the Russians doing?
One man who has been traveling this gold circuit, listening to the whispers, is Ted J. Veenendaal, whose company, Ofir, is about to mint a gold coin for a country that wants to have $250 million of its currency in gold. (Until the deal is as good as . . . well, you know what, Mr. veenendaal doesn't want to name the country.) What he hears is . . . wait a minute. Before we say what Mr. Veenendaal is hearing, let's talk about what gold is actually doing.
At the close of business on Friday, the price stood at $619.75 per troy ounce in London. This is down from the high of $850 per troy ounce, set at the end of January, but up from the low of $583 set about six weeks ago. Recently, prices have been fluctuating between $600 ounce and $650 an ounce.
Now, back to Mr. Veenendaal. In London he hears . . . wait a second, it's important to know that trading in gold futures (promises to buy or sell gold at a fixed price sometime in the future) has gotten so big that the Comex commodity exchange in New York has established higher margins on gold futures. Futures trading got sort of a tarnished reputation when the Hunts decided to default on a bunch of silver contracts they owned. It took a while for the commodities markets to sort themselves out, but since then, everything is back to its normal level of chaos.
Also, we might mention that the high price of gold has not made friends with US jewelers and dentists. The price is making it tough to sell bracelets and increasing the theft of gold chain necklaces. As for the dentists, they would love to fill teeth with something cheaper. One chap claimed to have invented a substance that had all the same qualities of gold and was made from copper, a fairly common mineral. Its only problem was that it is red. You know, the boys and girls at the office will call you "good old red mouth."
Well, as the chaps in London were saying the other day when Mr. V. was there, the price has no where to go but . . . oops, I almost forgot to mention that Mr. Veenendaal's company has had no problem selling gold flatwear despite, the rising gold price. Right now, in fact, he's waiting to sell a place setting for 12 for $1,998,000 (including serving utensils). The thing that makes this place setting special, aside from the fact that it requires you to hire a Pinkerton's guard to watch over your dinner guests, is the fact that it won't bend. Most gold is malleable. It may be valuable but it's soft. Offir has a patent on a process that makes gold hard while not lowering its purity. How does that work? Well, that's a different story.
It took Mr. Veenendaal three days of hard whispering in London to find out that he should be in Zurich. In Zurich, the London gold traders assured him, he would be able to confirm what he heard in London.And what did he hear in London? He heard that Harrods had stopped serving tea. Oh, you knew that. He also heard that the Russians were building submarines out of titanium and were buying silver like crazy. But what about gold? Are the Russians selling? Move a little bit closer to the page . . . is someone reading over your shoulder? Maybe you should put this away until it's safe to read. The Russians, the London traders said are . . . on the Polish border. Yes, this makes the London traders edgy. Very anxious. More anxious than the Iranian-Iraqi war makes them.