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

To: long-gone who wrote (65192)	3/9/2001 1:05:58 AM
From: paul ross	Respond to of 116779

InfoBeat Precious Metals Report - 03/08/2001 COMEX gold jumped Thursday as borrowing the metal became harder on world markets, thus eliminating the usual forward sales benefit and making it costlier to fund the oversold position of the market, dealers said. Conditions in other precious metals also tightened up, lifting prices. ``They´re hitting silver too, borrowing the short end in silver and that brought silver up also,´´ said one trader. Dealers said one-month gold lease rates rose to 5.5-6.5 percent on Thursday, from 3.0 percent late Wednesday. That exceeded the high rates last week, when borrowing costs first spiked and gold's rally from February's 17-month lows topped out. Lease rates are determined by supply from central banks and dealers, who loan bullion that would otherwise sit in vaults, and demand from speculators and mining companies, who sell borrowed gold forward to hedge the price of unmined metal against further price falls. Ian MacDonald, chief bullion dealer at Commerzbank, said the gold leases in nearby maturities are inching above U.S. deposit rates, a condition called backwardation that signals extreme tightness and makes it costlier to buy bullion for immediate delivery than in forward market. Gold typically trades at a contango, where deferred prices are higher than spot, encouraging forward sales. Longer-term lease rates were also moving up, dealers said. (Reuters)