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

To: Alex who wrote (40289)	9/14/1999 3:59:00 PM
From: long-gone	Read Replies (2) \| Respond to of 117024

<<COMEX Gold and Silver Warehouse Stocks-sep 14>> Do I note some massive drawdowns at Republic? Hmmmm? sniff? smell that? Is the "report that broke" just today from Gold Fields Mineral Services smelling a little funny(but I hear no laughter)?

To: Alex who wrote (40289)	9/14/1999 10:56:00 PM
From: Tomas	Read Replies (1) \| Respond to of 117024

GOLD: Forward sales hit price - Financial Times, September 15 By Gillian O'Connor, Mining Correspondent Massive forward sales by mining companies were one of the main reasons for the fall in the gold price in the second quarter of this year. Producer hedging sales (where mining companies sell against their future production in order to lock in a price and take advantage of interest rate differentials) soared to 252 tonnes, nearly six times as much as in the first half of 1998, according to consultant Gold Fields Mineral Services' update of its annual gold survey. GFMS suggested "it was the enormous growth in supply from producer hedging and short selling in the wake of the UK Treasury's gold sales announcement on May 7 that forced the gold price down to historic low levels". The companies sold heavily both as the price was rising and as it was falling, but for different reasons. In March, producers, many of which were under-hedged, sold forward because the gold price rose briefly above $290 an ounce and provided the opportunity to lock in a relatively good price. The second wave of hedging sales came after the UK Treasury announcement, with spot prices standing at 20-year lows, and "in some cases could only be described as panic-hedging". The surge in activity was the result of "sustained hedging by numerous producers in most of the major producing countries in both the first and the second quarter". For example, over the six months Anglogold added 55 tonnes to its hedge book, Barrick 56 tonnes, Placer Dome 36 tonnes and Ashanti 118 tonnes. Also, although Newmont stuck to its policy of not hedging in the first half, in July it announced its intention of initiating a hedging programme. GFMS predicted that the metal price, which was fixed at $256.75 per ounce yesterday afternoon, is more likely to weaken further over the rest of this year than recover ground lost in the first half. It suggests a range of $240 to $270 per ounce, compared with an average of $273.91 in the first six months, as official sales pick up and producers continue to hedge.