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Strategies & Market Trends : Strictly: Drilling II -- Ignore unavailable to you. Want to Upgrade?

To: ms.smartest.person who wrote (13790)	6/4/2002 8:31:35 AM
From: Roebear	Respond to of 36161

Merryfield, An interesting article, but the derivative idea has been talked about in gold bugdom for years. I would feel better about their figures if they had got this correct: Ashanti had to call in a rocket scientist from Goldman Sachs just to figure out how deep they were in a financial hole when gold crossed $325 in the summer of 2000. This golden crossing of 325 in fact happened in late September early Ocotber of 1999, NOT the summer of 2000. If they can't get simple, public historical fact right, how am I going to have any confidence in their back of the matchbook cover guesstimates of what is going on in the shadow world of gold derivatives? Having said that, the fact remains that something for sure is going on NOW, as opposed to the previous five years when the articles suppositions were equally true and nothing good happened to the price of gold, except for some brief bear market rallies. Dr No and Hung Fat are as dated as Dr NO/Goldfinger Bond movies. I would offer an alternative view as a more likely explanation. Whatever has happened since 97 with derivatives/hedge funds, a few facts can be deciphered. One, the gold carry trade is obviously dead. It's obituary can be read in the lease rates and interest rates. Two, whatever fun and games the hedge funds have been having with gold/silver since 97, those games are concluding and a new game is afoot. The fact that the Fed may be cornered on interest rate policy, via the very fragile post 911 economy, adds zest to this game of theirs. Three, the new game is indicated by entirely different TA parameters being demonstrated by the pm stocks. Conclusion, if the hedge funds are the sharks, the dead gold carry trade, whatever derivatives are left, and the Greenspan put which has been cornered are the blood in the water, there is no telling how far the feeding frenzy, and therefore the POG, will go. One thing with hedge funds is they tend to go to extremes. Best Regards, Roebear