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Gold 'rush' pricing
threatens banks
Short trading, manipulation
to blame, charge some
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By Jon E. Dougherty
WorldNetDaily.com
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Gold 'rush' pricing
threatens banks
Short trading, manipulation
to blame, charge some
--------------------------------------------------------------------------------
By Jon E. Dougherty
from his article (paragraph)today
"As of June 30, West Africa's Ashanti Goldfields was hedged 11 million ounces of production -- or roughly 50 percent of its reserves -- vs. 8.75 million on March 31, according to a report by John Hathaway of Tocqueville Asset Management. Using "conservative assumptions," the value of the "hedged book," he wrote, was $290 million.
However, that asset would become worthless "if gold traded at $325; at $350, the company would begin to face margin calls," Hathaway wrote. "The Ashanti hedge book is a bet that the gold market will remain quiescent and trouble-free. Ashanti's sanguine view is not unusual. Few in the industry are prepared for a spike in the gold price, especially one which does not retrace."
"Ashanti's U.S. banker is Goldman Sachs, according to market sources, perhaps explaining why Goldman was rumored to be a big buyer of gold options last Wednesday, following gold's explosive two-day move," said a report from TheStreet.com. "" |
