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Gold/Mining/Energy : Gold Price Monitor

GDXJ 99.85

+6.2%

Nov 24 4:00 PM EST

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To: lorne who wrote (65292)	3/10/2001 11:07:37 AM
From: Zardoz	Read Replies (5) of 116764

I posted this a bit earlier today but no one responded to it, what do you think? Trading- In New York, 2 banks were seen as visible buyers of gold with some decent volumes changing hands No-one responded to it earlier because they are hoping more then thinking.... The article itself in neglecting their own opinion and commenting on the intent. The key word was Backwardation... Under the theory of normal backwardation, futures prices will tend to rise over the life of a contract because hedgers tend to be short the futures market. Hedgers tend to be short the futures contract as insurance against their cash position. The hedgers will pay the speculators a return to hold long positions in order to offset their risk. This is known as normal backwardation. e-analytics.com Worth a read. Point is it's a bubble brought on due to cascading covering or longs. It'll burn itself out as people rotate from spot to forwards or vice versa. But either way if no dramtic rise breaks, then the trend will quickly fade. The point you made about large volumes is compounded by "Trend Reversal Patterns" {which is Bottoms and top are build in due to large volumes}. But that said: it neither places a top or bottom on a commodity. The Key to this is not whether lease rates are rising, but more over, why the Price of gold is not rising faster. Did not a previous rise in lease rates result in a $329 run after the EU announcements? It's likely that one large contract from $329 run is being paid back while a second one is being created. The large transverse of volume without spot rise is a possible indication of contract closings. Funny how the article you posted suggests a run on Gold... But the point about a lender no longer lending seems reasonable. Maybe theEnglish have decided to call in some gold for the next sell off? A substantial rise in Spot is required soon. Don't forget: It's possible to be short Gold and long gold stocks as a hedge. Hutch

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