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Gold/Mining/Energy : Gold Price Monitor
GDXJ 92.99+2.9%Nov 7 4:00 PM EST
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To: Bill Murphy who wrote (35276)6/14/1999 11:32:00 AM
From: Ron Everest  Read Replies (1) of 116753
 
Bill

I am interested to know if anyone has done an indepth analysis as to the characteristics of/and total gold sold forward?

There is continuous inferences that there are significant naked shorts out there of substantial amounts. Like up to 10,000 tonnes.

It would appear to me that the majority of the forward sales involve covered positions ie:
- Central Banks loan gold to Gold Banks
- Gold Banks sell the gold and owe lease rate to the Central Banks and the deals have a specific time when the gold must be returned
- Producers commit with Gold Banks for their future production at times which match the times when the Gold Banks must return the gold borrowed from the Central Banks.
- There appear to be wild card terms and conditions which allow the producer to cancel with penalties or defer. My assumption is that these conditions will flow back to the Central Banks.

There are persistent rumors that the total sold forward or short are in the 3,000 to 10,000 tonne range. What portion of these are forward sales with agreements for future production from producers? Is this thinking accurate or?

There are other rumors that the US can't withstand a gold audit as the gold may simply not be there. I am wondering if the US is also playing the strategy of forward selling and covering of risk by contracting future production.

Frankly, there is so much bs about these things that it is difficult to form an accurate opinion. The notion that shorts will have to cover en masse is bogus IMO. Can you refute that thought? Does GATA have any numbers on this?

Best regards,
Goldnerd
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