Celente couldn't be more accurate. The price of Gold , including the current "run up" , is determined by confidence , or lack thereof in paper
clunker-cash.
As a result of global currency abuse , Gold is breaking out in all of the majors....not just $USD.
Originally posted by St Udio
here's the thing that prompted the run-up, an item that states:
" This month, on September 8, 2009, Barrick Gold Corporation announced it was taking a $5.9 billion charge against 3rd quarter earnings in order to
buy back all its forward contracts, a considerable sum to pay for succumbing to the wishes of those in power... "" (see; 321gold.com)
to stop the few major gold producers who were planning to repurchase their 'forward contracts' of future gold production...
TPTB waited in the shadows until an event could be manipulated which would send gold soaring,,,
First , make no mistake...Barrick
is the
TPTB.
Former Barrick board of directors includes the likes of George H.W. Bush. Current
BOD - a litany of elite insiders including "young" Nathaniel
Rothschild.
Producer hedging
A contract/claim against
future mine production. Profitable strategy in a bear market when prices continue to fall.....devastating when the
market reverses direction.
Producer de-hedging
Barrick is under contractual agreement to deliver 9.5MM ounces of
physical Gold to satisfy hedge-book obligations. Barrick's primary
counterparty/partner-in-crime is....JPM.
That's 9.5 MM ounces @ an average price of $396 per...quite a discount from today's spot price...thus the writedown.
the gold producers cannot afford to buy-back the now impossibly expensive contracts
Not only can , but will....and at a substantial loss. Barrick's currnet round of de-hedging will be funded via their recently completed equity
financing.
1 year to complete the process.
Barrick
Completes Previously Announced Equity Offering
Keep in mind that in order to fund ongoing operations , Barrick has to sell the lions share of annual production into the open market at current
prices , but even if they were to de-hedge by delivering their entire 09 mine production , estimated @ 7.4 MM ounces , they'd still be short approx 2
MM ounces.
The obvious implication is that Barrick will be purchasing a large % of this Gold in the physical market. Naturally this additional supply off-take
will put upward pressure on the POG , aka:
The Barrick Put.
Needless to say , bulls are ecstatic over this development
? what might be used to pull the rug from under the gold $$...?
one suspect may be the ETFs that do not have the proper ammount of physical gold to support the ETFs valuation. and there's more than just the
billion$ invested, there is the trust/confidence in the markets factor...
once investors lose all faith & trust in gold ETFs it will be a swift crash to $800 or less. (and guess whose going to have short Puts up the
gazoo?)
With all due respect , this analysis is completely backward.
If it is ever confirmed that bullion ETF holdings are fraudulent , GLD/SLV SP would crash , however similar to the effect of a Comex default , the
resulting supply-shock would rocket the POG.
So we have spot Gold trading around 1040.....this with the Shanghai/Shenzhen stock markets/Shanghai Gold Exchange...closed for the [appropriately
named] "Golden Week" holiday (Oct 1 - Oct 8).
Shanghai Stock Exchange
Golden Week
Lets see what does , or doesn't happen when Chinese markets resume trade on Friday.
[edit on 7-10-2009 by OBE1]
