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

To: Ken Benes who wrote (70819)	5/30/2001 4:56:37 PM
From: yard_man	Read Replies (1) \| Respond to of 116764

interesting, but contradicting sets of theories you have said it is all market forces -- then you post 4. make up your mind, Ken -- preferably before you post

To: Ken Benes who wrote (70819)	5/30/2001 5:10:51 PM
From: long-gone	Read Replies (1) \| Respond to of 116764

Gold Has Biggest Drop in 1 1/2 Years on Selling by Speculators By Claudia Carpenter New York, May 30 (Bloomberg) -- Gold had its biggest loss in 1 1/2 years on selling by speculators whose purchases sparked a weeklong rally to a 15-month high on May 21. A report Friday from the Commodity Futures Trading Commission showed speculators last week had bought almost four times more gold futures contracts than they had sold. Speculators began reversing their bets on further price gains by selling contracts when the rally stalled, traders said. ``There was no fundamental reason for prices to go up in the first place,'' said Donald Eckert, head of precious metals trading at J.P. Morgan Chase & Co. in New York. ``Then we got the CFTC report, which was extremely negative. It means there is nobody left to keep buying.'' Gold for August delivery fell $7.70, or 2.8 percent, to $267.40 an ounce on the Comex division of the New York Mercantile Exchange, the seventh straight loss and biggest one-day decline since Nov. 1, 1999. Gold futures have now fallen 10 percent from the intraday high of $298.60 on May 21, erasing the weeklong gain and leaving prices 3 percent lower than at this time last year. Hedge funds and other speculators had bought 53,505 futures contracts as of May 22, compared with sales of 14,569, the CFTC report showed. The difference, 38,936 contracts, was the biggest net long position since February 1996. Gold had similar speculator-driven rallies in February 2000 and September 1999 that soon collapsed. The gain earlier this month was partly sparked by a decline in sales of borrowed gold by producers, analysts said. Lease Rates Rise The cost of borrowing gold for one-month, at 2.08 percent on an annual basis, has doubled in the past three months. That's also discouraged some jewelers from replenishing inventories with borrowed gold. Michael Anthony Jewelers Inc., the biggest gold jewelry manufacturer in the U.S., has slowed such borrowing as lease rates rose. The gold supply held by the Mount Vernon, New York-based manufacturer has dropped 10 percent in the past year to 180,000 ounces, said Allan Corn, the company's chief financial officer. ``Higher lease rates have definitely made us look much more carefully at our inventory,'' he said. Gold has lost a third of its value since 1996, as sales of bullion by central banks added metal to the market at a time when tame inflation gave investors little reason to buy.