Hutch,, I will try to ignore your snarkiness, however I find very little difference between a forward and a future.
<<At a price above the spot. This is a key point (1). >>
Normally where futures trade.
<<there are companies that will
speculate and sell excess amounts of calls.>>
If gold should shoot up in size, then one could say that your "Forward sellers" were speculating, and not investing as you seem to insinuate.
<<BUT Forward selling acts to smooth out the spikes of excessive demand.
AND it also acts too smooth out excessive drops due to supply.>>
I'm sure that's the hew and cry of all derivatives traders...
For several years now I have never seen the stock market move in any direction without being preceeded by the futures.. The tail surely can and does wag the dog.
<<, and aren't
doing it in times of high volatility; >>
Except for a couple of blips which appeared to be stepped on aggressively one could say that gold has had very low volatility for quite some time..
<<Now: explain how moving the sale price from the future to the present depresses the price when you {in the best
interests of YOUR company and not gold speculator} receive a premium to the spot based on volatility and time.>>
By selling gold at or below your cost, or forcing you to highgrade to deliver.
I'm certainly not the expert you claim to be but your thinking and hair splitting is pushing it.. Furthermore , if I was to invest/speculate in a gold producer because I thought that the price of gold was to rise , and if that should happen, find that the company had sold all of it's gold (forward ) ,or got themselves into some convoluted hedge gold/currency/bond swap, I for one would be quite upset.
This bear has been eternal and ugly, and you can ride on it's back for all it's worth, but you speaka da horse s*it...
Ho ho ho
rr
PS: I read my post over --You said this <and not gold speculator>>
Well who buys a gold stock that is not speculating on the future/forward price of gold? Aye yeah yeah |
