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Politics : Dutch Central Bank Sale Announcement Imminent? -- Ignore unavailable to you. Want to Upgrade?

To: long-gone who wrote (8094)	10/7/1999 7:42:00 PM
From: Ahda	Read Replies (1) \| Respond to of 81093

Richard i might not be thinking straight but i think it has to do with the US dollar too. As the yen started to gain strenght there might of been some concern on the part of the CB'S that the US dollar was no longer as the rock of gibralter in comparison to the yen. Just which dollar would be strong might of been the question and what do you do if all dollars are tumbling mass debt all over and what nation looks solvent? Money money all around me and none of it is truly worth a silver dime. It could of been too that gold would not give the return they wished so they decided to stop sales increase price. The former makes more sense to me however. Did do one proved that forward leasing and play with paper gold can be hazardous to one's health.

To: long-gone who wrote (8094)	10/7/1999 8:09:00 PM
From: Hawkmoon	Read Replies (4) \| Respond to of 81093

A short position? Let me get your scenario straight. Let's say I'm short gold from $450/ounce and I want to hedge my risk in case my short position goes against me and gold spikes. So I see Barrick is hedging their forward sales at $300/ounce and either selling "covered" calls or buying puts against their forward production. I, the shorter, go out there and buy one of their call options or sell a put (obligating me to buy their gold at $300), but my short position is hedged against a spike in the price of gold and I can deduct the premium I pay for that protection from the gains I'm making on my short position. But wait.. gold spikes up past my protective strike price and Barrick tells me they have the right to defer delivery of their hedged gold for 15 years and essentially sell their production at spot market price. So here I am, the shorter, with no way to obtain delivery of that gold to cover my short position because Barrick can negate their obligation, to deliver gold to me at $300/ounce, tell me to screw off for 15 years, and sell that gold on the spot market. Just why the heck would I be willing, as a shorter, to purchase such an option. Sorry Richard, I need something more in depth as an explanation. Anyone? Regards, Ron