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Gold/Mining/Energy : Gold Price Monitor

GDXJ 128.07

+0.7%

Jan 16 4:00 PM EST

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To: Greg Ford who wrote (4119)	12/10/1997 3:07:00 PM
From: The Vet	Read Replies (1) of 116892

Greg, I agree that one small producer closing out their hedge positions may not mean much but if a number of producers all start doing it there may be a significant move especially as they all produce real physical gold not "PAPER GOLD" so I expect that the combined loss of future supply of real gold plus the immediate demand on the spot that this could cause may be significant. If a number of the mining companies acted together then they might cause a sufficient squeeze to enable them to win both ways by making an immediate cash profit and increasing the POG back up to economic production levels. At least then we would see the real motives of the CB's as they would have to try much harder to depress the price in the face of what would be an effective short squeeze of physical metal. The other point that should be considered is that the banks and bullion firms who wrote the hedge contracts are now very substantially out of pocket if the POG fails to rise. Has anyone any idea who it is who is being fleeced by holding these contracts?

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