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

To: Enigma who wrote (49113)	2/15/2000 10:16:00 PM
From: lorne	Respond to of 116762

PRECIOUS METALS Wednesday, February 16, 2000 Gold awaits miner's payment move " Standard Bank said that with poor demand, gold might have to fall to less than $300 to maintain interest. " More >>> scmp.com

To: Enigma who wrote (49113)	2/16/2000 9:06:00 AM
From: Ken Benes	Respond to of 116762

In a forward sale that has been used widely by the producers, the company leases gold from a banker and sells the goods on the market. The monies received thru the sale are then invested in us bonds. When those positions are closed out, they will close out their positions with newly produced gold and pocket the cash from the sale of the bonds. This process allows the company to maintain a cash flow, reduce their hedged positions, and reduce the supply available to the market. I realize that some forward sales have been used to construct mines etc, these positions can be more problematic for the reason you mentioned. Your second question is a fair one. I believe the best answer to it is, when their is a change in direction(companies hedging), it will take a certain amount of time to work its way into the market particularly in situations where demand is not very elastic. I had always expected that the buyers of bullion would resist paying over 300.00 for gold waiting for an inevitable retraction in price to enter the market. With the fall off in demand, the bankers are given an opportunity to further depress gold prices with the issuance of short derivative instruments. I believe it is essential, during this period of adjustment, for the producers to limit supply by closing out their hedge positions where ever possible during this period. At some point buyers will return to the market adjusting to higher prices. Ken