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Gold/Mining/Energy : Gold Price Monitor

GDXJ 101.44

+3.5%

Nov 12 4:00 PM EST

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To: Bobby Yellin who wrote (41800)	10/1/1999 3:30:00 PM
From: Henry Volquardsen	Read Replies (4) of 116758

Hi Bobby, I believe gold didn't fly today because the gentleman is mistaken. If there is a problem with finding gold for delivery then why have 1 month lease rates eased back to 5-6%? Even at their high of 13% it was pretty tame compared to rate moves we have seen during currency crisis. Lease rates have declined because most the specs and a lot of producers have covered their positions. The sense I get is that the speculative component of the gold market is now slightly long, the carry trades have been almost all covered and the producers are underhedged. Interesting. All things considered I think for the very near term the equilibrium range will be 290-315. Btw did you see the Swiss central bank statement today? Very interesting market reaction. They started by saying they would do nothing to disturb the gold market. This was taken as bullish and gold rallied. But as the market digested the statement they got to the last paragraph where the Swiss said they still intend to liquidate half their gold reserves because gold plays no role in international currency management. They didn't give a timeframe so it is quite possible this liquidation will be beyond the 5 years covered by the earlier statement. The market then eased to close lower. This is the same language the Swiss used earlier this year. The next couple of weeks will be interesting and instructive. :) Henry

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