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Strategies & Market Trends : Waiting for the big Kahuna -- Ignore unavailable to you. Want to Upgrade?

To: re3 who wrote (62197)	1/11/2003 12:50:51 PM
From: Real Man	Read Replies (1) \| Respond to of 94695

Maybe not in one day - I forgot exactly how many days, but rather quickly, after limited sales announcement by 15 European banks. I think gold bugs are shouting too much about JPM exposure. Basically, they don't pay more than 1% gold interest, there is virtually no physical demand at these prices (according to WGC), so commercials are trying to sell in the futures market, which, of course, results in higher COMEX gold stocks. 125,000 contracts is 12,500,000 Oz, which means, if all of that is JPM's exposure, they lose $12.5M for every $1 of gold rise. It is probably useful to understand that investment demand in physical gold has been virtually nonexistent so far, while jewelry demand has obviously "felt" the price level that is $30 higher. Also, we are going into relatively weak physical demand period after February, and extremely weak during Summer. Short term the situation is a bit dangerous for the gold bulls, imho, since funds playing gold futures normally don't buy physical gold - they sell when their black box tell them to do so. Small specs may not have the black box, so they are usually the last ones to sell. A bit of a dollar bounce may do the trick, or some new CB sales, or whatever. Kind of like skiing in avalanche zone. I'm looking to buy gold when/if it has a large drop. Not touching my physical gold here, since it is low risk, but I think hedging is prudent at these levels. Note also huge call positions on the XAU index. This does not reflect anything but sentiment, since XAU is governed by real stock purchases, not puts and calls (unlike nasdaq or stock indices), but it calls for caution at these prices.