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Gold/Mining/Energy : Gold Price Monitor

GDXJ 121.17

-7.0%

Feb 5 4:00 PM EST

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To: Rarebird who wrote (51811)	4/21/2000 4:13:00 PM
From: Crimson Ghost	Read Replies (1) of 116972

Rarebird A lower dollar is important. But my take is that the chief negative for POG is the huge supply of cheap leased gold available from the CBs -- mainly the allegedly "pro-gold" European CBs. When the shorts can borrow gold at less than 1% and invest the proceeds in riskless T-bills yielding 6%, gold will have a very hard time rallying. The returns to the CBs from these gold loans are so low that there has got to be a hidden agenda here. Not only that, but these gold loans greatly depress the price the European CBs will receive for the gold they want to sell. If the CBs were to simply cut the amount of gold available for lease enough to hike lease rates to 3% instead of the current average of around 1%, POG probably would jump 30-40 bucks even if the greenback remained strong. But the bullion banks would scream bloody murder. And keeping these fat cats growing ever fatter seems to be a key objective of those calling the shots at the CBs.

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