Gold off 5.5. The scenario is unfolding as planned. Demand dries up over 300.00. The speculators enter the market forcing the price under 300. The news stream starts, Ashanti deal, new production, reports that the producers will be forced to hedge because gold will not see 300.00 anytime soon. The remedy, simple, reduce supply, and penalize the hole digging crowd, the most prominent barrick. ABX down to 16.43. Drive it below 16, pull the rug out of the gang that gave sophistry new meaning. Barrick does not need 1.6 million ounces of new production, nor does any other gold company need additional production, particularly when considering the source of funds needed to build the mines. The bankers, the same group supporting the speculators, the guys with a huge short position. It is music to their ears, new production = forward selling, increasing supply before the mine operates, after the mine begins producing, using the inground reserve to collateralize new gold loans. Life is good, so good in fact, hold it a minute, we got to call the producers, I can't hear the sound of shovels chipping away.
Ken |
