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

To: Ken Benes who wrote (70430)	5/26/2001 10:59:21 AM
From: Paul A	Read Replies (2) \| Respond to of 116759

Boy- arnt we a wee bit confident? Wish you the best.. Just a lurker.. but I always get a big kick out of folks with big egos/confidence.. They usually serve as excellent cont. indicators.. I think in the next few weeks your going to be reposting a similar message at a higher level.. and so the story goes with confidence :)

To: Ken Benes who wrote (70430)	5/26/2001 2:07:26 PM
From: russwinter	Read Replies (3) \| Respond to of 116759

Couple points about your post: Using the 16,000 tonnes as a data point, a large portion of the unleased remainder in CB vaults is likely to NEVER be leased or sold. Selling or leasing gold is not a universal policy or sentiment among all CB's. It's a rather old shop worn practice now. Is somebody new going to graduate from the "rocket scientist" school of finance at this late date? I doubt it, and if anything some CB's may be worried about losing loaned out gold FOREVER. After all, much of it is on people's ears or has been sold by miners (how about Centaur?: siliconinvestor.com who may never mine what they've sold forward. Some CB's who engage in this practice, may now realize that a 1% lease rate doesn't properly compensate them for the risk of loaning to financial institutions. In fact doing so kind of defeats the whole purpose of having a currency reserve. I would argue that 2% doesn't either, and once you get in this new territory the incentive to borrow at 2% (or higher right now), to buy treasuries at 4%, and risk gold rallies to boot is simply no longer a promising carry trade. In fact it's an outright dangerous one. On the other hand you can now buy a forward contract at only a 1.6% contango or interest rate. That looks like a great bet for speculators. The specs may have lost this round, but watch for them to try it again (and again). At some point the commercials (and the bulls on this thread will be watching for that one)will jump on board too. The evidence is that the demand- supply gap is widening, so ever increasing amounts of accelerated supply are required to quell the price. See last paragraph: Message 15856243 As a gold bull I don't even need decelerating supply to win my bet, although I think it's likely (from short (of gold)covering and production decline). One could possibly argue that CB sources may be maintained (I doubt it) but increased? There simply isn't the demand for borrowing gold anymore.