Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: J.E.Currie who wrote (48496)	2/8/2000 12:44:00 AM
From: Enigma	Read Replies (1) \| Respond to of 116762

I must be on the ignore button I guess I should be grateful.

To: J.E.Currie who wrote (48496)	2/8/2000 7:27:00 AM
From: long-gone	Respond to of 116762

Edited by Ryan Troup with MoneyNews.com Staff For the story behind the story... Monday February 7, 2000 11:12 AM EST Gold Spikes Higher Spot gold prices on the COMEX rallied $23 on Friday to $310 dollars an ounce, its first close above $300 since the European central banks' joint announcement in September that they would sell no more from their reserves. The recent action was fueled by an announcement from the third largest gold producer, Placer Dome (PDG), saying that they would no longer hedge their production in the futures market. Gold futures were already looking bullish with rumors circulating about a meltdown at a major Wall Street trading firm. Rumor has it that the firm was borrowing gold at 1 percent interest from central banks, including the United States. Apparently, they were selling the gold to fund a treaury market position. They were hoping to make the spread between the 1 percent they were paying for the gold and the 6+ percent they were earning on the treasury position. It appears that several firms may have been involved in similar transactions. This trade began to unravel last week as many were short the long dated treasuries while being long the shorter dated bills and notes. The Treasury Department's announcement that it would be reducing the amount of future treasury bond auctions while buying many of the long dated maturities back sent the long end rallying violently. Some called it a panic. Because the big firms began liquidating their losing treasury market positions, they needed to buy back the gold they had sold as their hedge. Through all of this, you can still borrow gold from central banks at rates of 1 percent or below. However, with the price of gold rising, the actual cost to the borrower could end up being much higher when they (cont) newsmax.com