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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: John Dally who wrote (68307)	9/27/1999 7:48:00 PM
From: Henry Volquardsen	Respond to of 132070

Hi John, what are your thoughts on the 1.3% rate increase in 1-yr gold rates? I disagree with their rates, I have the 1 year gold rate significantly lower. The rest look close. That said there has been a lot of nervousness the past month or so and lease rates have been trending higher. There most important recent factors: 1) the announcement by the European CBs included a commitment not to increase their gold leasing. reduced supply 2) with the price rise a number of producers have been looking to lock in hedge sales. increased demand In addition there has been some year end pressure, this is why the 3 and 6 month rates are the highest points on the curve. Part of this is the normal reticence to lend over year end and some is Y2K related. Also, last week, short-term rates were higher than long-term rates. Now it's suddenly the opposite? the current shape is highest at 6 month with the one year about the same level as 2 month. the normal shape for the gold lease curve is lowest at 1 month and rising further out. Henry