Investors,

Personally, I am in agreement with Jim Willie on why Bear Sterns was bought out. A collapse of any of the major banks now would lead to a financial melt down as markers are called that can not be repaid. This is why Northern Rock in the UK was bailed out by the British Government and why Bear Sterns was just taken over.

Now, whether they have been selling off their gold positions in an attempt to remain solvent, I do not know. I do know that if Bear Sterns still has a large long position in gold, then JP Morgan certainly would like to have it to help offset their very large short position in gold. They no doubt would be doing everthing in their power to make sure that Bear Sterns did not sell any more of it into the market untill the take over is complete.

Now for the recent down turn in gold, perhaps Bear Sterns did start the ball rolling by selling their gold positions. More likely someone, perhaps JP Morgan, planted the rumor that they would have to do so. This in conjuction with some heavy shorting in the futures market, perhaps by JP Morgan, along with no doubt, some more dumping of bullion on the physical market by a central bank would have been enough to keep the price of gold going down.

The end of the first quarter is almost upon us and it is actually the fiscal year end for the TOCOM. With the large run up in the first quarter in the commodity markets, mangers who were looking to window dress their funds were no doubt getting nervous and looking for any excuss to take profit. The pressure to do so would have been very great this year since the commodity markets are for the most part the only market anyone has made money on this quarter. These profits would be needed to offset loses in other area's and when the slightest downturn occured, everyone jumped for the exits.

I am very confident that the bottom has been put in for the gold price and that we should rebound strongly near the end of March and going into April.

Regards,

F.F.