Precious Metals mutual funds (gold, silver, PGMs) Message Board

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Strategies & Market Trends : Precious Metals mutual funds (gold, silver, PGMs)

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To: Dan P who wrote (676)	7/15/2002 11:09:50 PM
From: Larry S.	Read Replies (2) of 972

Dan, et al, Dines may be right, even if he was a little early. I suspect that today's rebound is signaling that we have seen the low for a spell even if it was computer generated. However, I don't think we have heard the last of companies discovering that their books were cooked and, even though I believe the economy will do OK, it is unclear that the market will have a reason to do more than hold its present level until next year. The inflation situation is also interesting. The lower dollar alone will cause some inflation. I didn't find any mention of PMs in Barron's this week except in market statistics and I didn't hear any significant mention of PMs on the financial shows I watched this weekend. However, the action in lease rates is interesting. Every rise in the price of gold has been accompanied by a reduction in the one-year lease rate. Today, the rate was driven down to 0.65%. When the price moves down, the rate moves up. It strongly suggests that leased gold is being sold to move the price down. The very low rate also suggests that are willing to give it away to hold the price down but finding it harder to find willing takers. The rate for silver is also below 1% but I haven't tried to correlate its movement with the price of silver. FWIW, I suspect your prediction that we won't make a strong move until August is still good even though we had a strong move today. If the broad market moves up a bit from here, the pressure on the dollar will be reduced and the price of PMs may drop a bit. However, the fundamentals haven't changed. The GMI/POG ratio: On 07/11, the Barron's GMI was 450.66 up significantly from the previous week's 425.15. With the POG also up at 316.70 (07/12), the ratio was up at 1.42. The ratio a year previously was 1.15. Cheers, Larry

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