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

To: The Vet who wrote (4122)	12/10/1997 5:40:00 PM
From: Greg Ford	Read Replies (1) \| Respond to of 116885

Vet, your assessment is correct however it is unlikely that the producers, who are competitors, would act in unison to start such a short covering rally. The problem will be who will be the first to close out their hedge book. Newmont closed out Santa Fe's hedge book at $329, I am sure they regret the decision. Tha banks and bullion banks trade the risk off on the gold sales. They delta hedge the transactions so that their risk exposure is minimized. By doing so they give up profits but ensure that sharp moves do not impact them adversely. Remember that they also trade both sides of the market and make spreads on buys, sells and the borrowing of gold. Greg