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Strategies & Market Trends : Steve's Channelling Thread

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To: Steve Lee who started this subject	4/27/2001 2:55:28 PM
From: Crimson Ghost	Read Replies (1) of 30051

Zeev: Well the rally is losing steam just as you predicted. On gold the situation today reminds me very much of early 1993. Lease rates up sharply signalling that the CBs are pulling liquidity out of the market. And with short-term rates down sharply there is very little incentive to hedge now. The risk/reward ratio for the shorts has shifted radically. Aggressive monetary easing has produced a very positive yield curve -- always a bullish factor for gold as well as stocks. Gold stocks acting extremely well as bullion lags. That is exactly what is supposed to happen at the beginning of a major gold bull. Very little gold exploration going on nowadays. So even though production has held up so far -- a steep fall is inevitable if prices remain depressed much longer. Last but not least we have a huge short position that is much bigger than 1993. This gives the "boys" more of an incentive to pull all the stops to keep POG depressed -- but raises the prospect of a huge move if (when) they fail. The above forces are heating the cauldron, but a big drop in the dollar probably will required to get POG going in a big way. I see this as just a matter of time.

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