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

To: Don Green who wrote (18999)	9/15/1998 9:38:00 PM
From: Mark Bartlett	Respond to of 116770

Don, <<O.K. I can accept that.. So why has the U.S. Dollar gained so much value against Gold over the years..>> Because interest bearing instruments have been more attractive - AND (very important) they are being financed by people borrowing (shorting) gold (at an interest rate of about 1%) and Yen (also at a very low interest rate), and investing in higher interest-bearing instruments. As interest rate decline (in the US) the motivation for this practice will decline. When that happens - all those that shorted gold, will have to buy it back. If they can not get it from the CB's (and it appears they have not been selling that much lately, despite what you here) they will have to buy it on the open market. If there is a significant short position (and it is rumoured to be very large) we could have a rush to cover = short squeeze. MB