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Gold/Mining/Energy : Gold Price Monitor

GDXJ 90.35

+0.4%

Nov 6 4:00 PM EST

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To: long-gone who wrote (61349)	11/27/2000 10:53:18 AM
From: lorne	Read Replies (2) of 116753

PSU banks not keen to hedge price risk on gold sale. Economic Times 27 November 2000 " However, the sales tax still continues in states. Like time and demand deposits, gold collected through deposits by banks have to be deployed in various avenues to earn a spread. "Ideally, banks should buy and sell gold in the market continuously, and hedge the price risk through derivative contracts. So, if the bank has mobilised 100 tons of gold, it will sell 40 tonnes and hold on to the remaining 60 tons. In case the price of gold rises, the bank buys more stock in anticipation of future increase in price. Conversely, it sells if the price falls. Derivative products offer an ideal option to work out hedges," said experts. Banks can also deploy the gold for loans to bullion exporters. " Full story >>> 203.197.64.234

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