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

To: Greg Ford who wrote (4119)	12/10/1997 2:49:00 PM
From: Cascade Berry	Respond to of 116874

I read on SI that Barrick's current unrealized "profit" on its forward sales was about 800 million dollars - does this make sense? The idea that producers would tacitly "conspire" to close out their hedges simultaneously and without warning, along with a combined announcement of mine closures <whether or not those were actually going to happen>, would imho scare the pants off a lot of shorts. It would also give the companies another opportunity to re-establish hedges at a higher price, shortly thereafter. This might be a good idea from their perspective. Even the mere existence of this idea ("meme") is dangerous to the shorts - (memes like this tend to propagate like viruses), whether or not it actually were to occur, as it damages the confidence of the "followers" (maybe not the leaders). This could induce the next spike up. I'm projecting a snappy bear market rally over the next two to three months, but I'm not convinced this is THE bottom. Silver is lending a nice psychological backdrop presently.

To: Greg Ford who wrote (4119)	12/10/1997 3:07:00 PM
From: The Vet	Read Replies (1) \| Respond to of 116874

Greg, I agree that one small producer closing out their hedge positions may not mean much but if a number of producers all start doing it there may be a significant move especially as they all produce real physical gold not "PAPER GOLD" so I expect that the combined loss of future supply of real gold plus the immediate demand on the spot that this could cause may be significant. If a number of the mining companies acted together then they might cause a sufficient squeeze to enable them to win both ways by making an immediate cash profit and increasing the POG back up to economic production levels. At least then we would see the real motives of the CB's as they would have to try much harder to depress the price in the face of what would be an effective short squeeze of physical metal. The other point that should be considered is that the banks and bullion firms who wrote the hedge contracts are now very substantially out of pocket if the POG fails to rise. Has anyone any idea who it is who is being fleeced by holding these contracts?