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Gold/Mining/Energy : Gold & Gold Stock Analysis

GLD 399.29

+0.9%

Dec 17 4:00 PM EST

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To: TheBusDriver who wrote (15431)	10/7/2008 2:07:03 PM
From: Nevada9999	Read Replies (1) of 29622

Two facts (I think): 1. Increasing lease rates must mean increasing amounts of gold are being borrowed. I don't think there is any reason to borrow gold other than to (forward) sell it. 2. Gold lease rate spikes in 1999 and 2001 coincide exactly with the double bottoms in the gold price. Interpretation: I don't know who could be selling large amounts of gold forward other than producers. In 1999 and 2001 it was Barrick, Placer Dome and every producer in Australia and South Africa (except Goldfields). I guess the producers are beginning to panic again and hedge. If history rhymes, this is short term negative and longer term positive for gold. It is positive for gold producers that aren't hedging and negative for those that are. If mine supply is being sold forward even while it is already declining and projected to decline faster, central banks or any entity concerned about a rising gold price should be very afraid.

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