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

To: Enigma who wrote (55557)	6/30/2000 9:47:29 AM
From: Ken Benes	Read Replies (1) \| Respond to of 116759

The derivatives used by the oil producers can be distinquished from those used by the gold producers in one significant way. Their forward contracts do not increase supply at the spot by one barrel of oil, whereas the gold producers frequently use derivatives that include the borrowing of gold from the central banks and then selling it immediately into the market, undermining the price of gold produced down the road. Oil hedges are designed to smooth out prices while gold hedges have the effect of smoothing out the pog to a lower equilibrium level by artificially increasing supply at the spot. Ken