ALEXANDRA OLSON, Associated Press Writer Friday, June 6, 2003
(06-06) 20:14 PDT CARACAS, Venezuela (<a href=www.sfgate.com>SFGate.com-AP) --

Meeting in a downtown park to avoid their rivals, lawmakers loyal to President Hugo Chavez adopted parliamentary procedures that allow them to swiftly pass several new laws, including one that would tighten restrictions on the media.

The lawmakers, gathering in tents in a poor neighborhood of hard-core Chavez supporters, adopted new debate rules intended to make it more difficult to block legislation supported by the president. Opposition members of Congress said they did not recognize the legitimacy of the vote.

The bickering boded more turmoil for Venezuela, a major oil exporter to the United States convulsed by a brief coup in 2002 and a ruinous general strike earlier this year. It threatened to further delay efforts in Congress to choose election officials who would run a possible referendum on Chavez's presidency.

Under a recent pact brokered by the Organization of American States, Venezuela's opposition may seek to hold a referendum later this year on Chavez's mandate, which runs to 2007.

The president's supporters hold a slim majority in the 165-seat Congress, but they wanted to cut the opposition out of the debate by meeting Friday in a hostile neighborhood. They argued they were forced to do so after a shoving match with opposition lawmakers disrupted a session at the legislative palace Wednesday.

"I ask Venezuelans to applaud these legislators who have assumed their responsibility with courage and continued legislating," Chavez said of Friday's unusual outdoor assembly.

Opposition lawmakers called the session illegal and said it was a Chavez-sponsored attempt to undercut Congress. They tried to convene a separate session at the legislative palace, but the president's supporters ordered the doors locked.

"If the government persists in the progressive dissolution of the legislature, there will be no path left except popular rebellion," said opposition lawmaker Leopoldo Puchi.

The new parliamentary procedure would make it easier to move legislation through a key 21-member committee in Congress that is dominated by the opposition. Chavez supporters claim that the opposition has used this committee to block legislation.

The opposition plans to ask the Supreme Court to declare Friday's vote illegal.

The new media law would ban "rude" or "vulgar" language, prohibit depiction of sex or alcohol or drug use, and ban violence during daytime.

It would also require that 60 percent of programming be produced within Venezuela, half of which would have to be created by "independent producers" approved by the government.

Broadcasters, who tend to oppose the president, say the law will give too much influence to censors hand-picked by Chavez to crack down on the mostly opposition news media.

<a href=cbs.marketwatch.com>THOM CALANDRA'S STOCKWATCH By Thom Calandra, CBS.MarketWatch.com Last Update: 12:48 PM ET June 6, 2003

SAN FRANCISCO (CBS.MW) - When executives from 15 or so gold mining companies gather in San Francisco next week, fund managers will be asking searching questions about the metal.

Can gold build upon a two-year rally that took it as high as $390 an ounce earlier this year? Will gold mining stocks join the rally that has propelled shares of both small-cap growth mutual funds and individual companies, largely in the technology sector?

Which exploration companies are most likely to be scooped up by the industry's giants in the never-ending balance-sheet quest to increase provable reserves of bullion? Most importantly, analysts, executives and money managers will be debating whether several new forms of "paper gold" scheduled for release this summer can lead investors to stake part of their stocks-dominated portfolios to bullion.

Gold these days resembles a critically acclaimed Hollywood film that's barely breaking even at the box office. Investors are counting on the sequel for the real fireworks.

The Denver Gold Group, one of several organizations that host mining forums in North America, is stepping up its schedule of shows aimed at professional investors. This year, as gold prices rallied from multi-year lows, the Denver trade group staged a Switzerland conference for the first time.

With the San Francisco show scheduled for next week, the trade association is attempting to enhance gold's image among hedge fund managers, mutual fund professionals and the financial press. Right now, the metal could use a nudge.

With the stock market rally dominating the attention of investors, gold this year has been on the back burner. The metal's dollar price, $363 an ounce, and slow-moving gold mining shares as measured by the XAU Index (XAU: news, chart, profile), can't compete with the price leaps of small-cap companies that are enjoying a rush of investor interest.

Yet gold mining stocks slowly are perking up, with many large companies exceeding profit expectations and dramatically improving their operating cash flows, thanks to the highest average gold prices in more than six years. Small producers, such as Wheaton River Minerals (WHT: news, chart, profile) and Iamgold (IAG: news, chart, profile), meanwhile, are trying to prove they deserve to be considered growth stocks in a world where most investors steer clear of anything related to natural resources.

"I think gold companies like Wheaton River will show investors they can consistently lower costs and raise production levels, and money managers will start to view them as true growth vehicles at bargain prices," says Frank Holmes, chief executive of $1.2 billion asset manager and gold specialist U.S. Global Investors.

There are some, including this writer, who see the gold group doubling in price, and more, in the second-half of 2003 -- even as the small-cap stock rally continues to thrive. For more on the small-cap rally, complete with Watch and Recommended Lists, see: The Calandra Report.

"The XAU hit 152.70 on Feb. 5, 1996, the day gold hit its last high of $414.80," says John C. Doody of Gold Stock Analyst. "Now the XAU is around 77. While the stocks in the index (Newmont Mining (NEM: news, chart, profile), Gold Fields (GFI: news, chart, profile) and so on) have changed, I still expect the XAU to double when gold climbs to around $415. So I expect the XAU will much more than double in 2003."

The mining stocks, of course, depend on the gold price to boost their returns. After reaching $390 an ounce in February, gold took a dive. Investors fled the metal after the successful invasion of Iraq. Talk of deflating economies, and global prices for goods and services, also took the wind out of gold's sails.

John Hathaway, a New York City-based mutual fund manager, has become one of the metal's strongest Wall Street believers in an explosive rally for bullion's price.

"The title of my talk is Gold for Dummies," Hathaway of Tocqueville Gold Fund (TGLDX: news, chart, profile) told me about his appearance next week at the San Francisco gathering. "The premise is that the bull market in gold is nearly 5 years old but a well kept secret thanks to the financial media."

Hathaway believes gold will rise sharply as the Federal Reserve dilutes the value of America's currency, the dollar, in a bid to alter deflationary expectations and boost U.S. exports. He also sees an upcoming exchange-traded fund for gold, Equity Gold Trust (GLD: news, chart, profile), adding hundreds of tonnes of demand for the metal when it lists this summer on the New York Stock Exchange.

The upcoming listing of the exchange-traded fund, a first for a commodity in North America, has hedge funds (and individual investors) licking their chops as they anticipate a flood of interest for owning gold directly through a NYSE-traded stock. See: Paper gold to spark investment demand.

The first gold trust to list as an exchange-traded fund, Gold Bullion Ltd. (AU:GOLD: news, chart, profile), trades in Australia and has sold almost 100,000 ounces of the metal since its listing earlier in the spring. Exchange-traded funds, like the Nasdaq 100's QQQs, change hands in real time and represent a basket of holdings. In the case of the new wave of commodity ETFs, those holdings are physical gold held in sanctioned vaults.

Institutions are bringing other paper-gold products to market as well. One of them, Central Gold Trust, would trade in Canada as a closed-end fund -- at a premium or discount to its gold holdings. "Investors pay a premium to purchase gold, typically receive a discount upon disposition, have delivery and storage charges as well as potentially facing assay charges if selling physical bars," says J. C. Stefan Spicer, the Canadian executive who would help to manage Central Gold Trust.

Central Gold Trust would resemble Central Fund of Canada (CEF: news, chart, profile), a closed-end gold and silver fund that trades in Toronto and on the American Stock Exchange. Spicer is the chief executive of Central Fund of Canada.

For the hedge funds that have been taking early positions in gold mining companies, the search these days is for companies whose stocks could triple and quadruple if gold's price were to rise $60 from its current level.

Some of those companies, such as Crystallex International (KRY: news, chart, profile) and Canyon Resources (CAU: news, chart, profile), face uphill battles in Venezuela and Montana, respectively, where they are vying to mine rich bullion deposits that could improve their financial results dramatically.

Others, such as Wheaton River, which mines gold and silver largely in Mexico, are steadily raising their production levels. And still others, such as Nevsun Resources (CA:NSU: news, chart, profile), are trying to convince investors their exploration efforts in far-flung corners of the globe, in Nevsun's case in Mali and Eritrea, Africa, will bear fruit.

"Nevsun's Bisha project, in Eritrea, has delivered results to rival any high-grade project currently under way in the world," says Robert Bishop of Gold Mining Stock Report. Nevsun was the world's biggest gold-stock gainer in 2002 but has seen its shares stall on the Toronto Stock Exchange after one of its geologists was murdered in April.

For more on the San Francisco Gold Forum, see www.denvergold.org.

For more on the small-cap stock rally and the latest additions to The Calandra Report, see: The Calandra Report. Thom Calandra's StockWatch is CBS MarketWatch's flagship column. The regular report is in its eighth year at CBS.MarketWatch.com. Thom Calandra is also author of subscription service The Calandra Report.

More THOM CALANDRA'S STOCKWATCH •Crystallex, gold miner, to see light of day 1:19pm ET 06/13/03 •Crystallex executive says shares are cheap 2:15pm ET 06/10/03 •Small-cap rally to get boost from liquidity, low costs 12:07pm ET 06/09/03 •Price swings have investors itching to buy small-caps 11:13am ET 06/04/03 •Thom Calandra: Events and why they move stocks 12:01am ET 06/02/03

Latest Industry News   Get Alerted on News in this Industry •Canadian stocks close lower on disappointing data 4:52pm ET 06/13/03 •Gold closes up on the session, but down for the week 4:13pm ET 06/13/03 •Insider trading, fragrance industry, gold and more 1:46pm ET 06/13/03 •Crystallex, gold miner, to see light of day 1:19pm ET 06/13/03 •Mining and coal stocks on top of this week's heap 12:19pm ET 06/13/03 Get the Hulbert Financial Digest Newsletter Honor Roll 2002. Learn which investment newsletters earned an above-average grade in performance during both up and down financial markets with The Hulbert Financial Digest Newsletter Honor Roll 2002.   Get your copy today! Sponsored Links List your site here Over 60? Cut Taxes and Have More Income - Free newsletter on cutting taxes, picking mutual funds, cutting cost of long term care insurance, stock selection, IRA distributions and more for those ready to retire or already retired. Consumer Credit Counseling Service - Non-profit Christian agency can help stop late and overlimit fees, reduce interest and you only have to pay to one place. No collateral needed, you cannot borrow your way out of debt. Personal Budgeting System That Works - This revolutionary personal budgeting system will help you manage your current spending and save more money for investments, retirement or whatever matters most. Free starter pack and free trial. Regain Control of Your Credit and Debt - Looking for solutions to get out of debt? The Credit Counseling Foundation is a Non-Profit 501(C)(3) agency that will drastically reduce your debt! Find out more with a free debt analysis!

Friday, June 6, 2003 Posted: 1240 GMT ( 8:40 PM HKT)

What a sad sight these opposition deputies are! -- President Hugo Chavez

CARACAS, Venezuela (CNN-AP) -- President Hugo Chavez accused opposition legislators on Thursday of using violence to "sabotage" the discussion of pending laws. His accusation comes a day after a scuffle broke out between rival lawmakers.

"What a sad sight these opposition deputies are! They go to parliament to sabotage a session when patriotic deputies are trying to approve laws necessary for the country," said Chavez.

Pro-government and opposition lawmakers exchanged insults, shoved each other and some even traded punches in the National Assembly on Wednesday. Meanwhile, a crowd of "Chavistas," as the president's supporters are known, staged a rowdy protest outside the legislature.

Opposition lawmakers accused the ruling party, which controls 84 of the unicameral assembly's 165 seats, of attempting to amend the debate rules without taking the opposition's observations into account.

The change in rules, they argued, was meant to speed up approval of a law to regulate what television and radio stations can and cannot broadcast. Critics say the legislation could be used to quash freedom of expression.

Ruling party lawmakers convoked a special congressional session to be held in El Calvario, a park in a poor and dangerous downtown Caracas district, on Friday.

The opposition said they will not attend the session because it was not approved with a required simple majority but decided unilaterally by assembly president Francisco Ameliach, a close Chavez ally.

'An ambush'?

Pedro Alcantara, a member of the Democratic Action opposition party, said the ruling party was planning "an ambush" against the opposition by armed Chavez supporters during the session in El Calvario.

The district is generally considered pro-Chavez.

Opposition leaders are occasionally harassed, and sometimes even attacked, by radical Chavez backers as they enter and leave the legislature. On Wednesday, two dozen opposition lawmakers chose to wait for police escorts and an end to the protest before leaving the building.

The ruling party plans to vote to amend the debate rules on Friday.

In a related development, ruling party lawmaker Nicolas Maduro said government opponents are planning to bribe a pro-Chavez lawmakers in an attempt to break the "Chavista" majority.

"We have information they are offering one million dollars so a deputy leaves the country," said Maduro. He refused to give details of the alleged plan.

June 6 (<a href=quote.bloomberg.com>Bloomberg) -- Venezuela's ruling majority moved congress outside into a sunny Caracas park, convening the legislature on folding chairs under a hastily erected canopy, after accusing opposition lawmakers of provoking fights in the assembly hall.

Representatives supporting President Hugo Chavez moved outdoors midmorning, two days after legislators from both parties began throwing paper and wrestled each other on live television. The fights broke out after pro-government congressmen, who hold a slim majority, sought to bypass an opposition-controlled committee that decides which laws reach the floor for a vote.

We were forced to move congress out to the people,'' said pro-government congressman Juan Barreto. The coup-mongering and fascist opposition congressmen tried to provoke violence.''

The congressional donnybrook may delay approval of a new elections board needed to hold a binding referendum on Chavez's rule later this year. Government and opposition leaders signed an agreement last week to let the board set the date of the referendum and allow international observers to monitor voting.

``It's quite clear that Chavez is intent on gaining power at all costs in all aspects of Venezuelan life,'' said VitaliMeschoulam, an analyst with political risk research company Eurasia Group in New York.

He has control of international reserves. He has control of PDVSA,'' the state-controlled oil company, Petroleos de Venezuela SA, said Meschoulam. He's basically shut the opposition down by signing an agreement that says let's do what's in the constitution.''

Trading Accusations

Chavez's supporters say the opposition is obstructing legislation from being passed while opposition leaders say the majority is trying to illegally change procedural rules.

``If we have to, we'll have congress wherever, whenever,'' said National Assembly President Francisco Ameliach in a televised speech at the beginning of the session in El Calvario park.

Opposition congressmen met, without a quorum, at the capitol building, a few blocks from El Calvario.

The desperate and irresponsible opposition tried to sabotage congress,'' Chavez said in a televised speech yesterday. The patriotic deputies are trying to approve laws necessary for the country.''

Chavez opponents agreed to a binding referendum after the August midpoint of his six-year term, following a two-month national strike that failed to force a vote on the president's rule in February.

Polls have indicated that Chavez, who was ousted by the military for two days last year during a failed coup attempt, would lose a referendum. After the strike crippled oil production and consumer spending, the economy fell 29 percent in the first quarter and unemployment rose to 20 percent.

Two Venezuelans died and at least 16 were injured last month after gunmen fired on two marches of Chavez opponents.

Reuters, 06.06.03, 12:10 PM ET NEW YORK, June 6 (Reuters) - NYMEX crude oil held steady at midday Friday after retreating from an early move above $31 as oil ministers from Saudi Arabia, Venezuela and Mexico gathered in Madrid to discuss oil output policy prior to OPEC's June 11 meeting, traders said. Prices hit $31 in ACCESS, met resistance under $31 in the early going today, and then retreated from resistance in the $31.13 area after finally topping $31 this morning. At 1204 EDT (1604 GMT), NYMEX July crude was 8 cents firmer at $30.82 a barrel after retreating from an early peak of $31.15. Traders had said they would watch any rally that challenges the double top of the $31.25 set on April 21 and the $31.30 and $31.32 peaks scaled on March 31 and April 1, respectively. Technical analysts on Friday were expecting nearby resistance for NYMEX July crude at $31.25, with support slated at $29.65 [nL06604353]. In London, the International Petroleum Exchange (IPE) July crude traded 18 cents higher at $27.62 a barrel. Venezuelan Oil Minister Rafael Ramirez said on Friday OPEC was prepared to make output cuts if necessary to keep prices within OPEC's $22-$28 price range [nL06588529]. Ramirez was speaking in Madrid shortly before the meeting with Saudi Oil Minister Ali al-Naimi and non-OPEC Mexico's Oil Minister Ernesto Martens. He said he expected Mexico, Norway and Russia to contribute to any future OPEC cuts needed to support oil prices. The one-day talks [nL06566136] in Madrid, set for 1600 GMT, will have the ministers representing the three countries that were architects of drastic oil curbs that helped revive depressed prices in 1998 and 1999. The return of Iraq exports will also be on OPEC's agenda. The U.S. advisor to the Iraqi oil ministry said on Friday he expected exports to reach about one million barrels per day (bpd) by the end of June [nL06557069]. However, analysts said on Thursday recent high prices could have made OPEC reluctant to cut output [nL04178763]. Iraq's State Oil Marketing Organization announced a tender on Thursday to sell crude from storage, lifting in the second half of June. But a return to prewar production levels must overcome the post-war looting that has damaged the infrastructure. NYMEX July gasoline was 0.08 cent higher at 88.60 cents a gallon, off its high of 89.50 cents that was just below resistance expected at 89.60 cents. NYMEX July heating oil futures were 0.13 cent lower at 77.10 cents a gallon, having moved in and out of positive territory.