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Gold/Mining/Energy : Gold Price Monitor

GDXJ 93.98

+0.6%

Nov 21 4:00 PM EST

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To: Enigma who wrote (38247)	8/3/1999 3:47:00 PM
From: Ken Benes	Read Replies (1) of 116764

I understand the mechanism very well. When you talk about futures markets you are talking about paper transactions. Whether the gold actually moves from warehouse to warehouse is not important, the perception of additional gold being available creates the downdraft on prices. Should the producers alter the tactic, and instead of selling forward, cut production and draw on the cb hoard for supply, the environment would have an immediate change. The cb's would actually have to produce the gold, if they hedged, supply would fall and prices would rise. In the current situation, whether the gold hit the spot market or not, the perception is that it has and their is more supply than demand and prices fall. Perception is everything. Ken

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