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

To: Merritt who wrote (68368)	9/29/1999 10:47:00 AM
From: AurumRabosa	Respond to of 132070

Higher gold lease rates seen luring central banks LONDON, Sept 29 (Reuters) - Higher gold lease rates should draw fresh lending into the bullion market, adding to scarce liquidity, London Bullion Market Association Chairman Martin Stokes told Reuters on Wednesday. "With yields for gold at between five and nine percent, depending on loan period, it's surely attractive for central banks and other official institutions to consider placing fresh metal on deposit," Stokes said. Gold prices surged to two-year highs above $300 an ounce after Sunday's pledge by 15 European central banks to limit reserve sales and derivatives activity for the next five years. Gold lease rates swung wildly through early Wednesday trade, snapping out at times to more than 10% for one-month loans, up from the 0.5% rates of earlier this year. Stokes said it was not for the LBMA, an association of 12 market-making banks and several dozen ordinary members, to ease the pressure on lease rates. Stokes, who heads the London bullion operations of bankers JP Morgan, added, "The LBMA has no gold itself. The role of the association is to ensure that the market continues to function smoothly and that conditions remain as orderly as possible. "Market-making members by their status have an obligation to quote to customers and other members in a timely fashion in spot and forward bullion. "Though the market has seen an extreme of volatility this week, conditions have not become unstable," he added. (I doubt this gold rally has legs.)