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

To: Real Man who wrote (89413)	9/8/2002 8:57:14 PM
From: goldsheet	Read Replies (3) \| Respond to of 116796

<Producer de-hedging in the first 2 quarters was 365 tonnes, which can be called "investment demand" by mining companies, and which is about twice greater than the total for Indian imports for the period. Perhaps, that explains the price rise so far. > ABSOLUTELY CORRECT !!! I commented some time ago (years?) that production, scrap and central bank sales were remaining at strong historical levels, while jewelry demand was declining. This was making for a continued negative gold situation (stuck around $275) There were two ways out - investment demand and covering hedges, both of which have happened. 1999 was the last year gold miners provided additional gold supply (445mt) by hedging. The October 1999 squeeze was the handwriting on the wall that the trend had changed. Miners began to cover and were net consumers of 14.5mt in 2000 and 147mt in 2001. I was thinking they might be good for up to 500mt in 2002 (probably will be more) Meanwhile, investment demand by individuals has been very impresive percentage-wise but just does not compare to what producers have done. Another point I have tried to make was that the so-called hedging crisis would be self-correcting by the marketplace. As interest rates have declined over the last few years the basic economics of hedging have changed and made it less attractive. Hedges are being unwound in a nice reasonable orderly fashion by the miners. Every day the amount of gold hedged goes down, the amount of gold in the marketplace goes up due to production, and the relative ratio declines making a derivative crisis less likely. I want to see gold miners get back to mining, find lots of ounces, produce lots of ounces, sell them at higher prices, and make lots of $$$$, so we can make lots of $$$$