All this was sweet music for gold even though the relationship between higher inflation and higher gold prices has become somewhat hazy. Greenspan further warned that rising imbalances could bring the "economic expansion, its euphoria, and wealth creation to a debilitating halt". This was just the tonic gold would be looking for to change its fortunes. It bordered on Greenspan's earlier "irrational exuberance" statement made in the last millennium, which had gave a fillip to gold prices then. But the fallout of Greenspan's comments was disappointing for gold.

The dollar took its cue and rose to a seven-weekhigh of near 106 against the yen. Even the Dow did not falter and continued its onward march to well over 11,700 points. Gold did cross the $284 per ounce mark on Friday, but that was more due to short-covering in anticipation of the Friday options expiry in New York. In fact, the yellow metal fell once again to end at $283.30 per ounce in London.

If the `good news' was not discouraging enough there was a flip side for gold as well. Michel Camdessus stepping down as IMF chief after 13 long years means that within a year there have been changes at the top in three bodies which hold a hefty chunk of the official gold reserves. The other two being the US treasury and the Bundesbank. Analysts warn that a change of guard could spell trouble for gold given that changes in Argentina and Australia were followed by the changes in the gold reserve policies in the respective countries.

Even in UK, the major decision to go for the option route may be linked to the replacement of John Major by Tony Blair.

Thepessimists warn that a new IMF chief may reopen the issue of selling IMF-gold to pay off debts of poor countries. They also remind all that Greenspan has not always been gold's friend. In fact, his main concern is to curb inflation. Dealers warn that gold would slip back to $279 per ounce if it did not crack the $285 per ounce barrier. Most importantly, gold's fortunes now hinge on the outcome of the January 25 round of UK auction.

The country cousin, silver, was largely inactive and remained range bound near the 510 cents per ounce. Fears of Chinese silver causing a glut in the markets have undermined silver and poured cold water over silver's rise just before the year end.

The CEO of the world's largest platinum mine, Amplats, believes that higher jewellery demand would offset Russian exports. In fact, Amplats plans to increase its output by 400,000 ounces over the next two years. Strangely, even news that the first batch of palladium exports from Russia failed to cause much of a dent in palladiumprices. Although much below its all-time high of $454 per ounce, it still continues to rule the roost at $440 per ounce.

Even as the debate on uniform sales-tax rages on with strikes galore, the Maharashtra state government could do well to introspect on what caused most of the bullion and diamond industry in particular, to leave the state. The state needs to look not only at sales-tax but also at the octroi duty and turnover tax.

A start could be to bring duties and taxes at par with centres like Delhi and Ahmedabad. Then, if need be, steps could be taken to ensure the return of the traders who left the city. It is about time the authorities realise that merely increasing taxes does not mean increase in revenue. Elsewhere, standard gold improved from Rs 4,470 per 10 gms to end at Rs 4,475 per 10 gms while .999 silver vacillated between Rs 8,120 per kg to Rs 8,055 per kg before closing lower at Rs 8,025 per kg.

Meanwhile, industry consultants Gold Fields Mineral Services (GFMS) have in their Gold UpdateII stated that gold should average $280 per ounce in the first half of 2000. GFMS also pointed out that official sector sales aggregated 441 tonnes during 1999, of which 399 tonnes were in the second half. This was against 375 tonne sold during 1998.

The survey also put forth an interesting sidelight to the whole official sector sales, producer hedging soared to 445 tonne during 1999 as compared to just 88 tonne in the previous year.

Thus sharply bringing into focus the fact that central banks alone cannot control gold prices. It also underlines another fact. In terms of gold, cartels are passe!