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Gold/Mining/Energy : Gold Price Monitor

GDXJ 120.19

-1.4%

4:00 PM EST

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To: GTC Trader who wrote (64246)	2/23/2001 8:21:50 AM
From: russwinter	of 116844

Backwardization occurs when spot or very short future maturities trade at higher prices than longer dated maturities. Yesterday we saw the spot (physical trade done as it sounds on the spot, now, pronto) trades oh so briefly over or close to the futures. I consider this bullish given my rather extension arguments here that physical gold is now extremely mismatched with paper gold (futures, derivatives, etc.). If physical shows strength to the point of going into backwardization then it is in short supply, and a squeeze may be developing. The increasing lease rates means essentially the same, but unlike some observers, I believe this is more related to supply of leased gold from CB's to the bullion dealers. I think a credit rerating is underway. For further explanation, glean my prior posts over last month or so.

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