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Strategies & Market Trends : Buy and Sell Signals, and Other Market Perspectives

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Dec 15 4:00 PM EST

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To: GROUND ZERO™ who wrote (23891)	8/21/2011 9:44:31 AM
From: mazel-tov	Read Replies (1) of 220187

Bears out your comments: (Kitco News) -- If President Hugo Chavez of Venezuela actually takes delivery of an estimated 10 metric tons of gold, there could be an unusual development of backwardation in the futures markets, says Dennis Gartman, editor/publisher of The Gartman Letter. Chavez wants gold held in Venezuela’s name in the Bank of England and the New York Federal Reserve transferred to Caracas. Gartman says gold normally is not supposed to backwardate, but he notes that interest rates are not supposed to go to zero and they have. He says if Chavez takes delivery of what is supposed to be 10 metric tons of the metal, “gold will backwardate, wreaking havoc along the way.” If that happens, Gartman says, it may be prudent to buy nearer gold and to sell deferred gold futures. “The margins required to hold these positions are inordinately small, and if Chavez really does stand for delivery of ‘his’ gold, we can imagine that October and December gold will trade to premiums over February and beyond.”

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