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Gold/Mining/Energy : A to Z Junior Mining Research Site -- Ignore unavailable to you. Want to Upgrade?

To: 4figureau who wrote (3378)	2/21/2003 9:38:55 AM
From: 4figureau	Read Replies (1) \| Respond to of 5423

UBS Warburg: Gold is attracting interest from investors prepared to look through the current / imminent geopolitical factors weighing upon the world. While not necessarily the majority view, growing concerns about longer term global economic prospects appear to be encouraging some investors to return to gold for reasons not seen in decades. Gold: News: Placer Dome released quarterly results yesterday and made some detailed comments on its intentions regarding gold hedging. “During 2002, excluding the impact of the acquisition of …AurionGold Limited, Placer Dome met its goal of reducing its committed ounces under its gold forward sales program by 20% to 6.9 million ounces. During this period, Placer Dome's forward sales program realised a $32/oz premium over the average spot price of gold of $310/oz for the year, contributing $82 million to gold revenue. As of December 31, 2002 Placer Dome has integrated AurionGold's hedge book, resulting in maximum committed ounces of 12.6 million. This level of commitment constitutes 24% of the company's expanded mineral reserves. PDG's objective is to significantly reduce its overall hedge position. In 2003 PDG will reduce its committed ounce position by at least one million ounces by delivering into contracts and closing out positions as quickly and opportunistically as market conditions allow” (edited press release). Trading: Gold opened around $350 in New York on Thursday and came under pressure immediately from light selling pressure but the release of disappointing economic data saw gold recover. Decent buying interest between $351 and $352 gave gold the impetus to move higher although private client selling of gold stopped gold moving higher. Light buying of gold was seen in Asia although gold stayed in a narrow 50c range. Gold has remained very quiet in Asia. View: Gold has rallied by about 11 dollars since the low earlier in the week despite continued light long liqduiation from Comex speculators. We believe that risk aversion factors continue to make gold attractive and that gold will hold its risk premium over the coming months. A short term test of $355 and $357 looks on the cards. Silver: Trading: In New York silver again opened on the lows with good selling from one commission house. Once this had been absorbed, however, silver moved higher on bank and speculative buying. Some good resistance was found around the $4.66 level, but silver finally broke though this level to trade as high as $4.68/oz. Forwards: Silver forwards tightened sharply again yesterday and then eased just as quickly on decent two-way flows from investment banks that led silver rates to swing violently. Whilst it is true that the roughly 100 million-ounce fall in Comex speculative longs over the past couple of weeks has contributed to this move, it seems hard to believe that silver forwards should be this tight. Once the aggressive borrowing comes to an end silver rates will probably slip all the way back to effectively zero. View: Silver may be showing the next move for gold as the metal has rallied slightly after an apparent end of Comex-long liquidation. Beyond these short term moves, silver should further benefit from the weaker US dollar (as will all dollar-denominated commodities), but since silver’s applications are largely industrial in nature the metal will continue to be hit by slowing economic activity. thebulliondesk.com