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Gold/Mining/Energy : Gold and Silver Mining Stocks

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To: goldsheet who wrote (2291)	9/21/2001 2:02:19 PM
From: russwinter	Read Replies (1) of 4051

<it will show up as primary mine production in 2001 regardless of when or how they sold it.> I understand that, but I'm evaluating influences on prices, and that would be sales and purchases not simple deliveries. If the sale was made as a hedge or forward contract back in 1997, and delivered today it will not affect the markets, which are transaction oriented. Therefore when we look at supply and demand for say the third and fourth quarters, we need to also account for accelerated supply (additional forward sales above normal production), or accelerated demand (early close out of forward sales to take advantage of current prices and the extremely low contango). Neither is static, as producers don't just uniformly hedge according to production. In the past (until last year) they've hedged MORE than production thus accelerating supply. In the future, I expect them to reverse this practice so much so, that they not only just deliver into their contracts, but actually buy back (accelerated demand)their forwards (right now all the way out to 2003 would be opportune). That would have a profound effect on gold demand.

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