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Gold/Mining/Energy : Gold Price Monitor

GDXJ 93.98

+0.6%

Nov 21 4:00 PM EST

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To: long-gone who wrote (34619)	5/28/1999 12:39:00 PM
From: Ken Benes	Read Replies (2) of 116764

Richard: The above ground inventory of the producers is negligible. The gold they are selling forward are their reserves in the ground deliverable at a future date when they are mined, milled, and cast. To sell this future production today, there is one and only one place that the bullion is coming from, the central banks. Selling inventoried gold does nothing for a companies balance sheet. Selling reserves today converts discounted gold in the ground to the market value it will command on the spot market. Even if companies had a significant amount of inventoried gold, their balance sheets would look dramatically better with the gold remaining on the books, shown as a current assest, and discounts reserves moved up the asset chain to cash equivalents. Inventoried gold is insignificant at best. Ken

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