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Gold/Mining/Energy : A to Z Junior Mining Research Site
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To: 4figureau who started this subject1/8/2003 9:41:18 AM
From: 4figureau  Read Replies (1) of 5423
 
UBS Warburg:

Gold succumbed to profit taking yesterday after the market digested the Comex COTR data and the recent changes in open interest but the decent bounce from the lows of $345 may indicate that the weak longs have been flushed from the market. Further volatility looks assured, however.

Gold: News: Placer Dome chief executive Jay Taylor said on Tuesday the rise in the gold price meant the company would reassess projects that were previously uneconomical at a lower gold price. He said the higher price gave Placer new confidence to spend money on technically difficult deposits like the Getchell gold property in Nevada, suspended in 1999 because of low prices, and the Pueblo Viejo asset in the Dominican Republic. Taylor told Reuters in an interview that Placer was on target to reduce its hedgebook by 20 percent to under 7 million ounces in 2002, and was aggressively looking to cut the hedgebook of newly acquired AurionGold, the Australian company Placer bought in a hostile takeover.

Trading: Gold opened around the $350 level in New York with one large US investment bank a noted buyer, lifting the metal buy a dollar. Bank and speculative selling was seen into this investment bank buying and gold quickly lost a couple of dollars once the buying interest dried up. With crude oil falling and the XAU gold equity index in negative territory gold couldn’t sustain the $348 / 349 levels and quickly dropped down to the $345 before finding good bids and the metal rallied to $347 into the close. In Asia, gold
opened in line with the New York close before Tocom liquidation was seen, which dropped gold a dollar. Support was found around the $346 level and gold edged higher into the close and it has remained just below $347 in quiet early European trading.

View: The current levels of speculative long position held on Comex are almost unprecedented but in light of the recent additions to the net longs, it seems likely that new money has been attracted into the gold market. Since the size and durability of these flows are unknown and there are few obvious sellers of gold in evidence then gold could hold these levels or even make further gains. We would caution, however, that speculative-led rallies could end as quickly as they have started; physical demand is not supporting the gold price at the current levels.

1m 3m 6m 1y 3y 5y 10y
USD/XAU Impl Opt Vol (Mids) 21 20 18 17 14.5 13.46 13
Gold Fwd Rates 1.30 1.25 1.08 0.89 1.18 1.74 2.86


Silver: Trading: In New York silver opened on the highs with evidence of speculative buying seen but then the metal came under pressure as gold slipped lower. Sell-stops were triggered below $4.81 but once these had been executed silver spent the rest of the day in a range of 4.79 / 4.81.

View: Silver’s catch-up rally has been almost entirely driven by Comex-trading speculators. With a much higher proportion of industrial applications, silver’s prospects looks uncertain at these high levels.

thebulliondesk.com
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