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Gold/Mining/Energy : Gold Price Monitor
GDXJ 121.59+2.2%Dec 26 4:00 PM EST
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To: Rarebird who wrote (39396)8/22/1999 11:53:00 AM
From: Crimson Ghost  Read Replies (1) of 116825
 
Rarebird:

In the past you have downplayed the impact of CB leasing on POG. Have you now changed your mind?

Re that Red Baron article on leasing. He has it half right IMHO. The Fed and CBs are most certainly using leasing to help control POG. But it is a mistake to conclude that they will never let the gold price rise if they can help it. Reading between the lines of Greenspan's statements, he seems to be implying that the CBs will lease increasing quantities of gold if POG rises sharply and suddenly in an uncontrolled way.

In fact the recent strong jump in lease rates suggests the CBs are moving to reign in the gold carry trade. And this is almost certain to lead to higher gold prices before long. But if a slow and modest climb turned into a sharp advance or a major short squeeze, there is little doubt more CB leased gold would hit the market quicker than a flash.
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