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: long-gone who wrote (64760)	2/28/2001 7:19:40 AM
From: re3	Respond to of 116871

maybe but his list of sells are not exactly the first gold stocks i'd load up on...

To: long-gone who wrote (64760)	2/28/2001 10:52:16 AM
From: E. Graphs	Respond to of 116871

Gold/PM Mutual Funds......the trend is turning up! finance.yahoo.com .....and it's just the beginning.... finance.yahoo.com

To: long-gone who wrote (64760)	2/28/2001 11:16:34 AM
From: bambs	Respond to of 116871

DJ Gold Lease Rates Ease, But Supply Crunch May Not Be Over By David Bogoslaw Of DOW JONES NEWSWIRES NEW YORK (Dow Jones)--Although gold lease rates fell sharply Tuesday afternoon on evidence of substantial lending into the market by a central bank, it's not clear whether borrowers have fulfilled their needs or will be back for more, dealers said. The injection of lending into the market spurred selling into the morning fixing of the spot price in London Wednesday morning, said Frank McGhee, a dealer at investment house Alliance Financial LLC in Chicago. Comex gold futures prices followed suit, shedding more than $3 before finding support and rebounding. Gold lease rates started to climb sharply late last week and by Tuesday morning had reached a crescendo, with one-month rates between 4.5% and 5%. That represented a two percentage-point surge Monday night and stood in stark contrast to rates under 0.5% in early February. After inching up from depressed levels for more than a month, short-term lease rates, those for six-month periods and less, suddenly caught up with longer-term rates and then surpassed them. The spike in the shorter end of the lease curve was seen as a major factor prompting Comex futures to rally more than $8 since Friday. "The question is whether there's still more borrowing to be done which would raise lease rates again," said Bernard Penner, bullion dealer at Enron Metals in New York. "We've only had a one-day respite from the squeeze and we have to wait to see if any further developments occur." He said he suspected the tightness in the lending market wasn't over yet. McGhee at Alliance Financial agreed. "I don't think what's going on in the market is over by any means," he said, adding that he hadn't yet identified which central bank had done the lending. "That type of spike with the front end (of the curve) inverted couldn't be sustained unless we were ready to be significantly higher (in futures prices) and we aren't yet." The lease curve going into backwardation, where the nearby rates are at a premium to longer-term rates, was guaranteed to attract lending into the market, McGhee noted. Liquidity Crunch Due To Expiration Of Central Bk Loans Many market watchers traced the liquidity crunch back to the fall of 1999 when some central banks issued longer-term loans with maturities of up to two years in order to lend structural stability to the market. That was after 15 European central banks had signed an accord limiting their sales over the next five years to no more than 400 metric tons a year. The problem was that those loans were one-time-only loans and central banks were not replacing them with other long-term loans as they started to come due. "If there's still some hold on lending by central banks, borrowers (are likely) shoring up positions for the short term," said Enron's Penner, who said it was difficult to know when the longer-term loans were coming due and hence, when borrowers would be forced to cover their commitments by going to the short-term lease market. "They may have bitten the bullet early when the squeeze was on and are done (borrowing)," he said. Another question was whether rates had surged more on expanding demand than on tightening of supply. Alliance's McGhee said he suspected producers were trying to buy back metal they had previously hedged as forward sales at lower prices once gold prices had bounced from a test of 20-year lows two weeks ago and seemed to be heading higher. Standard Bank London Ltd., in its daily report on Tuesday, had echoed that notion, saying that "prominent Aussie names seen in the market would suggest a producer buy-back was the catalyst for the move higher." Indeed, various investment firms mentioned a restructuring of producer hedge books as possibly triggering a tightening of liquidity in the short-term lease market. But Leonard Kaplan, president of Prospector Asset Management in Evanston, Ill., said he doubted producers were buying back output they had previously sold forward. "Producers buying back would mean paying higher prices for forwards and upward pressure on forwards to make them wider," he explained. "The wider the forwards, the narrower the lease rates." Lease rates are derived by subtracting forward rates from the current or average London Interbank Offered Rate. The bounce in gold prices from the low $250s area two weeks ago made analyst Rhona O'Connell at Canaccord Capital, a London investment firm, think the market's downside potential was greatly reduced. That would make not only borrowers, but large speculators who had put on a massive amount of short positions in the last few weeks, more likely to seek to borrow metal to cover those positions rather than roll them forward, she said. -By David Bogoslaw, Dow Jones Newswires;