DAILY QUOTES & GOLD MARKET REPORT
The world's largest gold miner, Anglogold of South Africa, today confirmed its indications Monday that it would begin delivering into its hedges to reduce the position going forward. It also announced that it had reduced its net hedge position by 10 tonnes since the start of the fourth quarter, 1999. One Swiss dealer told Reuters "We expect one or two major mining companies to issue similiar statements reflecting the industry's market confidence," and in fact, another South African gold miner said that it had closed out the next two years of its forward sales. Nice work, Western Areas, Ltd. Meanwhile, the hedging/gambling inspired woes of Ghana's Ashanti Goldfields continues to plague Africa's third-largest gold miner. The Associated Press today reported that analysts have said a failure by Ashanti would force its bank creditors into trying to buy back approximately 10 million ounces of gold to settle Ashanti's outstanding position. In commenting on this latest rise in gold, and notably the producer buybacks, Bill O'Neill, senior futures strategist for Merrill Lynch, told the AP that he remained cautious about calling this the start of a super bull market: "I don't think this rally in gold is a monetary or economic event, or a proxy for inflation, or is being driven by concerns about some financial houses. This is a structural gold issue." Well, we think that's just fine...imagine the additional fireworks when the market DOES finally get around to pricing in various monetary events, inflation, and those concerns about the stability of some financial houses. Thanks for that good perspective, Bill.
We also have word from Bridge News that Deutsche Bank is calling for a more optimistic outlook for the price of the yellow metal. Deutsche mining and metals analyst Don Maclean told an African mining conference that "$350 seems necessary to encourage further growth," otherwise further reductions in companies' budgets for exploration would be likely. "Gold is rarer than we thought," Maclean said, noting that growth of mine supply was nearing zero as "most new projects' output will simply offset declines in existing production," which looks set to fall after 2002.
More >>.
usagold.com |
