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Gold/Mining/Energy : Gold Price Monitor -- Ignore unavailable to you. Want to Upgrade?

To: Enigma who wrote (38247)	8/3/1999 2:57:00 PM
From: Stephen O	Read Replies (2) \| Respond to of 116764

There are CBs providing gold for selling into spot. They charge the borrowing cost, and the gold is repaid from production. Of course the next chunk of production could also be sold spot as the CB loan of gold is rolled forward.

To: Enigma who wrote (38247)	8/3/1999 3:47:00 PM
From: Ken Benes	Read Replies (1) \| Respond to of 116764

I understand the mechanism very well. When you talk about futures markets you are talking about paper transactions. Whether the gold actually moves from warehouse to warehouse is not important, the perception of additional gold being available creates the downdraft on prices. Should the producers alter the tactic, and instead of selling forward, cut production and draw on the cb hoard for supply, the environment would have an immediate change. The cb's would actually have to produce the gold, if they hedged, supply would fall and prices would rise. In the current situation, whether the gold hit the spot market or not, the perception is that it has and their is more supply than demand and prices fall. Perception is everything. Ken