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Gold/Mining/Energy : Gold Price Monitor

GDXJ 109.23

+3.7%

Nov 28 4:00 PM EST

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To: bambs who wrote (64604)	2/26/2001 7:27:33 PM
From: russwinter	Read Replies (3) of 116786

Leonard Kaplan is perhaps the only important gold analyst that is not clueless about what is happening. His comments tonight are worth reading. In particular I would direct attention to the point about a bullion banker in the market as a consistent buyer. This suggests to me that a hedger is engaged in a buyback. This is a double whammie on the bears for two reasons: it's a buy, AND after the gold is bought back it is returned to the vaults of a CB, thus drying up physical gold and liquidity. It signals that the same forces that drove gold to twenty year lows are now going into reverse. His second observation concerns the shorts, who he believes have not yet begun to cover. I've seen some claim that a short covering rally will not be enough. I agree, but given the extreme level of shorting in a dangerously illiquid market, it is important fuel for the fire. There are more fundamental changes occurring in the liquidity of the market however. Credit risk is being rerated, producers are rethinking their hedging approach, the carry trade is about to be obliterated. And that's just what's obvious. Should be fun. thebulliondesk.com

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