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

To: IngotWeTrust who wrote (89996)	9/26/2002 6:14:44 AM
From: Zardoz	Read Replies (1) \| Respond to of 116820

Damn.. Now I have no reason to be here... missed by minutes Good 4 u

To: IngotWeTrust who wrote (89996)	9/26/2002 6:57:09 AM
From: E. Charters	Read Replies (1) \| Respond to of 116820

Another clue that gold is probably not going down short or long term is the nature of the big boys (the commercial's actions) in unwinding their hedges which will fail in a rising gold market. They (the producers) that they can make more on production funded at low interest rates and bank on the price of gold rising, than to put gold or sell forward. In the past they have finance by selling gold which they borrowed at ultra low rates. It made sense for producers to sell gold which paid 1.5% interest at the most, rather than borrow money or underwrite at 8% to 15%. The borrowing of gold drove its price down. It was an attempt by the banks to create a two tier price system, like the EMGMA in Canada of the 1940's 50,'s and 60's. This is where the government bought gold at a higher price than street, off the miner. But ultimately the borrowing of gold worked against them. In order to finance, they had to sell the twice as much gold as they did normally. The game caught on in Japan and Europe where millions of ounces were sold to buy T-Bills which paid well above the gold interest rate. All this selling of gold by beyond arm's length financiers has been registered as central bank sales, a fait accompli in hindsight. In order to pay the banks the miners or financers gave them shares they had bought at low prices, either their own, or some tech bubble stock. Again bad business. When that paper got compared to gold's value at an English bank recently the devaluation was horrendous. There was a loss of 80% of the asset value of the bank. Hardly good economic sense. All the selling and hedging has worked against the gold price, ultimately punishing the miners and particularly the explorationist. Large companies frequently depend on small companies to do their exploration for them, so this has worked against them in that sphere too. No more flow-through funded juniors doing explo to flip the properties to the big boys. This was always a huge source of new discoveries. Peirina was a case in point and so was Argentina Gold. A large part of Barrick's new capacity came from junior exploring mining companies and was not generated internally. When this dries up, apparently so will new mines. Two things might clue one to the inexorable gold price rise. One the Russians have invested heavily in gold recently and two, the miners themselves have a steady upward path of price and investment. They have to see where the metal is going if we don't. EC<:-}