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

To: Bucky Katt who wrote (5960)	1/15/1998 12:13:00 PM
From: Bob Tate	Read Replies (1) \| Respond to of 116753

There is no doubt political game is being played with gold. That game will be sustained as long as Banks are willing to cooperage in feeding physical gold to a spot market. As it appears they are not so willing in doing that at this low price. Indicator of this is shortage of physical gold. Mining companies and shorters are useful for this game in following. Supply of paper gold is taken care by mining companies borrowing gold from banks and selling forward at higher future price to sustain current production. Miners are paying borrowing cost to the bank plus future obligation to deliver. Actual gold does not leave bankers vault , just a certificate that gets sold on market. Banker is happy to collect lending interest (that has been rising steadily) on gold that otherwise was not producing any income. Banker's gold stays in the vault and is not endangered. Short sellers are active in selling on the knowledge of this game being played. Lately the tensions are rising in their camp since nobody knows how willing and honest Banks will be in feeding physical gold to the market. They are watching each other very closely. "FWN reported yesterday fund buying on behalf of Republic Securities -- a division of Republic National Bank, one of the largest gold bullion banks." The fact that Republic National Bank does this trading through is division and using third party like FUND may be the first indication of rank braking and indication how tight physical gold market is. We are witnissing gold bouble being blown that in turn may lead to a sudden future price increase.