Food for thought for the Goldbugs..
From Street.com
Mike Norman
Gold cannot maintain current levels
8/19/03 12:36 PM ET
Aaron: The rise in interest rates has nothing to do with the deficit. It has clearly been shown that Federal gov't deficits have little effect on rates. The rate rise has been due to unwinding of the Fed's "alternative measures" fakeout, and rising demand for credit from the private sector, due to --YES -- an improving economy.
Yes, still short Newmont.
More on gold...
According to Martin Mayne, associate director of bullion sales with N M Rothschild & Sons in Sydney, gold demand has been coming from two sources that are both unsustainable: producer dehedging (unwinding or closing out of hedge positions to leave producers more exposed to the spot price), and speculative fund buying.
Mayne noted the latest data from the Commodity Futures Trading Commission in the U.S. which showed that speculative long positions on Comex totaled more than 10 million ounces of gold as of last Tuesday. He called this "a level that has historically been unsustainable."
In addition, Mayne highlighted the most recent figures from Gold Fields Mineral Services which showed a 5% increase in the unwinding of hedge positions in the June quarter, to 5.465 million oz. This accounted for 17% of global gold demand during the quarter, he said. "A hedge book can only be closed out once, and speculators cannot continue to buy indefinitely," Mayne concluded.
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