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Gold/Mining/Energy : Barrick Gold (ABX) -- Ignore unavailable to you. Want to Upgrade?

To: nickel61 who wrote (1977)	1/18/2000 2:57:00 AM
From: Zardoz	Read Replies (2) \| Respond to of 3558

Me Sez: Now how much of the LBMA gold trades actually in the form of the physical? You'se reply:You and I basically agree on this point. I don't think anyone knows but 1% physical verssus 99% paper dirivatives is probably as good a guess as any. Oh man that was easy. I post a question, add a snark comment at the bottom, and you automatically say that 99% is paper. Well here's a answer that you can take to you Futures Test. ALL the GOLD, even if it's paper, is transferable into physical gold at delivery under the terms of the contract. So of those tonnes trading each day, they are potential tonnes of solid Gold. Take that to your central bank. And what is backing that, Barricks' grade 'A' credit rating. This rating is better then most countries get, and the off-balance sheet items back their contracts. This is the way it works when ABX writes contracts, and that's the way it works if they bought contracts, or LBMA gold. I feel they{ABX} understand the significance of the European Central banks deciding to ban together and sign a formal agreement to stop the downside pressure that gold leasing has brought to bear on the price of gold over the last four years. As said elsewhere, by me, just a short time after the ECB signing. The agreement means LITTLE. What it did was give the Professional Hedgers like ABX & PDG another opportunity to hedge at a HIGH delta and a HIGH gamma. In this case it allowed them to hedge short-term futures, and options. Did they not add to their positions? In fact I stipulated it several times that the ECB played right into the hands of the shorter {all this said when the POG was above $310} And what happened after the announcement. Demand dried up. And now we are back to the mid 280's. So it was up $70 and now backs down $50. Hutch