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

To: Ken Benes who wrote (57917)	9/7/2000 6:30:08 AM
From: Alex	Respond to of 116756

Punjab National Bank adds gold business to its product range PRESS TRUST OF INDIA -------------------------------------------------------------------------------- Chennai, Sept 6: The leading public sector Punjab National Bank (PNB) has added gold business to its product range taking advantage of the 1997-2002 exim policy's provisions allowing import of gold by banks. The scheme was formally launched here on Tuesday by the bank general manager PK Gupta, who also conducted the first sales to the bank's leading customers. Speaking on the occasion, Gupta said the bank's gold import scheme would now be available in selected branches in seven centres in the country for the benefit of exporters, NRIs, returning Indians and the bank's domestic clientele. He said initially, the business would be conducted on consignment basis for which supply arrangements had already been entered into withCommerz Bank, Luxemburg. The seven centres include Delhi, Mumbai, Ahmedabad, Jaipur, Ludhiana and Amritsar, besides Chennai, where international qaultiy gold bars would be available for sale in the banks selected branches. Highlighting the bank's latest performance on the occasion, Gupta said the gross profits of the bank during the first quarter of the current fiscal registered a growth of 49.9 per cent to touch Rs 331.39 crore as compared to Rs 221.14 crore during the same period last year. The total business of the bank touched Rs 71000 crore at the end of the first quarter, he said, adding that the targets for 2000-01 have been aimed at Rs 85000 crore. The total forex turnover of the bank reched Rs 13700 crore in 1999-2000 and the target for the current financial year was Rs 18500 crore he said. BM Sharam, zonal manager, southern region in his address said the zone spread over the four southern states and the union territorry of Pondicherry was targetting a business of Rs 3900 crore during the current fiscal as agaist Rs 3300 crore atpresent. The Mint Street branch in Chennai is the first branch in the southern zone designated for handling the newly launched gold business scheme. Copyright © 2000 Indian Express Newspapers (Bombay) Ltd.

To: Ken Benes who wrote (57917)	9/7/2000 1:15:27 PM
From: Zardoz	Read Replies (1) \| Respond to of 116756

When a producer of a commodity sells forward, he is locking in a price today for delivery of the commodity sometime in the future. At a price above the spot. This is a key point (1). What is unique among the gold producers, a forward sale can be structured in a way that additional amounts of the commodity are available immediately at the spot market. There are NO additional amounts of gold. You can't create additional amounts of gold from thin air. It either exists, or doesn't exist. If it didn't exist you'd expect a short squeeze on the sellers. But by forward selling you shift the amounts of gold from points of presumed low prices to points of perceived high prices. And with the added volatility {ahhh that key point 2} you achieve a much better price. Now, as mentioned before, there are companies that will speculate and sell excess amounts of calls. This is done under the idea that gold may fall and that they are unlikely to delivered. This is speculation on their part. The increase in supply can and in the case of gold has had a depressing effect on the price of the metal. Well there is no increase in supply... BUT Forward selling acts to smooth out the spikes of excessive demand. AND it also acts too smooth out excessive drops due to supply. The hedging techniques employed by the gold producers contains considerably more risk than the hedging techniques used by the producers of most other commodities. Not so. The risk of the hedge is depended on the amount of commodity as a percentage of production, and the ability to deliver. What the margins of the hedge are invested in is irrelevant to the hedge. So an oil producer is at just as much risk as a sugar producer, or gold. Only accidents, which effect production, are a concerned. When factoring in the cost of the mine, the company can easily be relegated to the unenviable position of depleting their reserves at a low price that places the company at risk. Really... look up to key points 1 & 2. If they aren't making money by hedging on a forward or future, and aren't doing it in times of high volatility; then they sure aren't going to be making a profit as the price drops lower. Lower then productions costs. YES, it is possible to miss some opportunity on the upside, but that is the risk of hedging. Hedging: A secure income. Now: explain how moving the sale price from the future to the present depresses the price when you {in the best interests of YOUR company and not gold speculator} receive a premium to the spot based on volatility and time. Hutch