Strictly: Drilling II Message Board

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Strategies & Market Trends : Strictly: Drilling II

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To: isopatch who wrote (3332)	10/30/2001 12:52:53 AM
From: Roebear	Read Replies (2) of 36161

isopatch, A contrary view of lease rates, from kitco: Date: Tue Oct 30 2001 00:38 John Disney (lease rates) ID#24387: Copyright © 2001 John Disney/Kitco Inc. All rights reserved for newphys .. who asked .. "Can anyone explain to me why gold bullion prices are rising today ( and tonight ) with gold lease rates at near one year lows? " ************************************************ IMHO lease rates are low because no one in their skull would borrow gold .. the contango is minimal at this interest rate level. People borrow gold IF they can pay it back . They can pay it back IF they get a miner to sell gold forward to them .. A miner sells gold forward IF he will receive a reasonble margin ( say 4 % and up above current spot ) a year forward on the gold now in the ground. Add to the the qualitative input that selling gold near what appears to be a bottom makes a lot less sense than near a top. short answer .. Miners have stopped selling forward. there is no demand for leased gold. Best Regards, Roebear

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