The oil price is a factor as as well - this is literally fuelling the fears of deflation which is not helpful for gold. The storm will pass - keep taking the divi and company will continue to drive free cash flow as the ramp up continues!. Thank you HK for that very interesting explanation of the gold market! Keep well people!
t how is it possible that there is a shortage of gold when gold prices keep tumbling day after day, the skeptics will ask? Simple: the shortage involves gold "available" in the repo market, i.e., gold that already has been rehypothecated one ore more times. Keep in mind that central banks rarely if ever purchase gold outright in the open market, unlike Russia of course (and perhaps China), which has been engaging in an unprecedented gold buying spree over the past year. The rest of the commercial and central banks merely rely on shadow banking conduits and other repo channels to satisfy their gold needs, all of which merely demand the "presence" of synthetic, if not actual physical gold. It is this synthetic "shadow" gold that is now actively disappearing from the system.Of course, if and when central banks were to tip their hand and reveal the unprecedented synthetic shortage to the physical market, the actual cleared market may well go bid only. Source:zerohedge
GOFO is calculated as LIBOR less the Gold Lease Rate (GLR). Typically, GOFO rates are positive, a function of the fact that it typically costs more to borrow dollars than gold. The further out you go on the curve, the higher the rate – just like bonds. Presently, GOFO rates are negative. This tells us that the Gold Lease Rate LIBOR is higher than LIBOR. In other words, it costs more now to borrow gold than it does to borrow dollars, which essentially eliminates the gold carry trade – one of the primary reasons bullion dealers would sell gold into the market. GOFO rates are rarely negative. In fact, they have only been negative twice since 1999, and both times, GOFO rates going negative preceded a bottom and signaled a future rise in gold prices. D Kranzler
Yep, dark forces at work here. I note Investec have a sell rating on African Barrick or whatever they call themselves now and a target price of £170 while Numis have a buy rating and a target price of £320.00 Big difference. I don't think Investic like gold miners. Have a good weekend all.
Interestingly an investment in African Barrick from late Oct would have given around a 20% gain, while CEY has seen the 20% opposite. Boo!
Not a good day today but -
Have a look at the way our MP's talk to David Babbs when presenting a huge petition from people like us against TTIP1 These politicians are absolute arrogant git's! The response to the clip of MPs shouting me down for trying to explain our concerns about TTIP has been amazing. I've had thousands of messages of support. And so far over 700 members have set up a regular donation to 38 Degrees, to make sure the campaign grows stronger than ever. That's probably the last thing these MPs wanted to happen! If you haven't listened to the 3 minute clip yet, here's the link again: https://secure.38degrees.org.uk/ttip-listen ----- This week I was shouted at by a group of MPs. I'd been asked to explain to the Business Select Committee why 38 Degrees members are so worried about TTIP. That's the dodgy EU-US trade deal that could bring further privatisation of our NHS.  But once I got there, they didn’t seem to want to hear why we were against privatisation. Or why we want to stop American corporations having the power to sue our government in secret courts. Instead they attacked 38 Degrees members for wanting to have a say. They kept arguing that 38 Degrees members didn’t know enough to have valid opinions about the deal. And when I said we don’t trust politicians to deal with something as important as this behind closed doors, the chairman told me to shut up! BBC radio put together a short report about what happened. It’s just three minutes long, and well worth a listen: https://secure.38degrees.org.uk/ttip-listen After you’ve listened, I’d like to ask you to consider making a regular donation to 38 Degrees. That’s because I think the attitude of these MPs proves that stopping TTIP is going to be a long hard slog – and that we need to throw everything we can at it. This year we’ve pulled TTIP out of the shadows and forced politicians to talk about it.  Judging by yesterday it’s clearly shaken them up. But if we’re going to win, then next year we’ll need to make the campaign three times as big.
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