Not quite. Cb's can make gold available for leasing, it is up to the producer or the speculator to avail themselves of that gold and take out a new contract.
One of the reason lease rates are at their current lows, there is little demand for leased gold. Relative to outright sales, how much of the 30,000 tonnes held by the central banks is available for sale. Currently the deficits between supply and demand is over 1000 tonnes per year. This is a persistent drain from the cb's reserves. Factor in how much gold has been leased, (estimates of approximately 10000 tonnes), and how much gold will not be sold under any circumstances, and you get a feeling the market for gold is tight. Should barrick and the other producers delay new production, they will further stress the markets, which is needed at that current time.
It is no surprise that demand is faltering above 300. Buyers are expecting gold to be available for less in the near future. The producers should be supporting the market thru this transition phase by reducing supply rather than increasing it. Increasing supply helps only one group of persons, those short gold, it certainly has not helped the producers in the past, nor will it help them in the future.
Ken |
