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Strategies & Market Trends : Precious Metals mutual funds (gold, silver, PGMs)
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To: Larry S. who wrote (872)8/24/2004 2:52:55 PM
From: Larry S.   of 972
 
Dan, et al,

I missed another week so I will post the GMI info for the past two weeks below. Barron's Commodities Corner this past week was devoted to a discussion of hedging with the thrust being that, while it is still unpopular, it should be considered since the rise in gold prices has ended (sense of Victor Flores quote). I was surprised at the Flores comment but he is now with HSBC.

Lease rates continue to fascinate me. The one year rate was at an all time low last week but rose a bit with the drop in the POG, again suggesting that gold is being leases to sell into the market and drive the price down.
Of course, if Flores is right one might say it is being sold with expectation of buying if back at a lower price. In any event, lease rate moves continue to support the view that CBs are interested in motivating the leasing to gold to hold the price down.

The GMI/POG ratio:

On 08/12, the Barron's GMI was 547.40, essentially unchanged from the previous week's 548.55. With the POG down at 396.75 (08/13), the ratio was up slightly at 1.38.

On 08/19, the Barron's GMI was 601.30, up significantly from the previous week's 547.40. With the POG down at 410.55 (08/20), the ratio was up significantly at 1.46.

The ratio continues in the middle range where it doesn't suggest a rise or drop in the POG.

The ratio a year ago was 1.59. The GMI was 569 while the POG was below 360.00.

Larry
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