"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."
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"Any comments from the Goldbugs?
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Hi Sherlock,
Mike Norman is a fairly well known gold bear who is quoting a rep from Rothschild & Sons who are also known for their 'negative' slant on gold.
I personally choose to ignore the noise coming from either source as they have been spouting the same crap since the PoG was under $300.
Sure the dehedging will slow up and perhaps even stop altogether, but that may not occur until 2008 for all we know.
Kindly bear in mind that there are still thousands of tons of gold that are still hedged.
Some comments from earlier today directed at Mike Norman from the Street.com's Aaron Task that you seem to have inadvertently omitted from your post:
clarification 8/19/03 10:05 AM ET
Mike, Do you really think rates started rising solely (or mainly) due to an improving economy? Not the rising deficit/supply, the mortgage convexity trade or the Fed's deflation tease?
Also, when you write that you're "short gold", does that mean you're still short Newmont Mining? On June 10 you wrote: "I would sell [NEM] aggressively at 32.85 or above. However, we may not see that again for a while, so I would sell a partial position above 31 and again if the stock trades above its highs."
NEM has traded above $39 since then. Have you been shorting more on the way up, too?
Sorry to be prickly, but I know many readers would like an update on your NEM position. And you did bring up the subject of gold w/o specifying.
Norman's reply is at the end of the first paragraph of your
"edited" copy of the interview with Task and to save you the time and bother of going back to find it:
"Yes, still short Newmont."
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Btw Sherlock, Newmont made a new high close today at $38.91, up 87 cents. Maybe Norman will eventually be right on Newmont too if he has a lot of time and money.
Fwiw, I do not subscribe to the Street.com and got the above info from the LeMetropole Cafe (Bill Murphy of GATA) whom I do subscribe to.
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