SHORT SQUEEZE IN GOLD: Now they WILL pay you to short gold.

[krakknisse]

Now they WILL pay you to short gold. The 1 month LBMA gold lease rate just went from just above zero to -0.11%, and the 2 month rate is also negative. The 3, 6 and 12 months lease rates are also very low.

So, if you're willing to lease gold, sell it on for cash and stick it in a LIBOR rate account, you'll earn the 0.11% lease rate PLUS the LIBOR.

The lease rate went briefly very negative in 1999 (-4%), during a short squeeze after the first Washington agreement. It was however very short-lived.

To me, this seems like a short squeeze, and probably a very fun one. Hang on for the ride!

[metalman]

Re: SHORT SQUEEZE IN GOLD: Now they WILL pay you to short gold.

wheeee! my rump of gold is rising! dow/gold 5000/2500 here we come!

[blazespinnaker]

Re: SHORT SQUEEZE IN GOLD: Now they WILL pay you to short gold.

Congrats, please ask the rest of the commodities to follow you folks on the way up.

[grizam303]

Re: SHORT SQUEEZE IN GOLD: Now they WILL pay you to short gold.

Congrats, please ask the rest of the commodities to follow you folks on the way up.

I tried telling oil, but he's too hung over to listen to what I have to say. I think he was out partying with those wall street boys all night.

[metalman]

Re: SHORT SQUEEZE IN GOLD: Now they WILL pay you to short gold.

Congrats, please ask the rest of the commodities to follow you folks on the way up.

but gold is the only commodity that central banks own. that's why there ain't no dow/oil ratio or dow/silver.

[blazespinnaker]

Re: SHORT SQUEEZE IN GOLD: Now they WILL pay you to short gold.

but gold is the only commodity that central banks own. that's why there ain't no dow/oil ratio or dow/silver.

Actually, I don't think the federal reserve owns the gold. I think it's the US treasury.

And the US has oil reserves as well.

[jtabeb]

Re: SHORT SQUEEZE IN GOLD: Now they WILL pay you to short gold.

Actually, I don't think the federal reserve owns the gold. I think it's the US treasury.

That is factually incorrect, BTW, it is the FED that owns the US' gold

[bart]

Re: SHORT SQUEEZE IN GOLD: Now they WILL pay you to short gold.

but gold is the only commodity that central banks own. that's why there ain't no dow/oil ratio or dow/silver.

Better be careful... Finster or I or some other sass specialist will build them... ;) (Dow/oil is actually one of the ratios on my hard/tangible vs. paper assets cycle chart)

Wild moves today, almost across the board. Some of the COMEX boys had a religious experience.

[audrey_girl]

Re: SHORT SQUEEZE IN GOLD: Now they WILL pay you to short gold.

in the unlikely event that someone here is unawares re Perth mint:

http://www.theaustralian.news.com.au...37-643,00.html

[Tulpen]

Re: SHORT SQUEEZE IN GOLD: Now they WILL pay you to short gold.

I suspect the rise in gold is the prelude to a dollar collapse and the beginning of inflation.

Long gold, oil and uranium.

Right now however I think the best leverage is in oil which is due for a rebound.

[Spartacus]

Re: SHORT SQUEEZE IN GOLD: Now they WILL pay you to short gold.

Interesting article.

Too bad they don't break out what the demand is - (or technically, what it WAS before they suspended sales) it would be nice to confirm or disconfirm that the bottleneck and paper-to-metal premium is only in the small weight / coinage categories.

And it would be nice to know from an auditor if the Perth Mint actually has any Gold for delivery, and whether this "voluntary suspension" is really voluntary.

in the unlikely event that someone here is unawares re Perth mint:

http://www.theaustralian.news.com.au...37-643,00.html

[grizam303]

Re: SHORT SQUEEZE IN GOLD: Now they WILL pay you to short gold.

After seeing oil blow up this summer despite no demand/supply factors, I'm going to go out on a limb and say that there's no reason unprecedented demand for gold should drive up the price. :rolleyes:

[renewable]

Re: SHORT SQUEEZE IN GOLD: Now they WILL pay you to short gold.

I understood that the gold lease rate that is generally quoted is the difference compared to LIBOR, not the actual rate.

[Spartacus]

Re: SHORT SQUEEZE IN GOLD: Now they WILL pay you to short gold.

You are correct, and I've pointed this out with respect to Silver[*] many times - "lease rates" are NOT the cost (or rate) to execute a lease.

I understood that the gold lease rate that is generally quoted is the difference compared to LIBOR, not the actual rate.

if you are in a position to lease Gold from somebody willing to lease it to you at the Gold Forward (GOFO) rate

AND sell the Gold immediately (try that with a leased car, by the way)

AND put the proceeds into an account that earns LIBOR rates

THEN you will make a profit

IOW the Gold lessor is "paying" you to take Gold (temporarily).

Of course, I bet no one is actually doing any leasing at the current rates. Unless the lessors perceive a risk in holding Gold that the lessees do not perceive.

In which case, of course, the lessor is NOT "paying you" (net of risk) to execute the lease, they're offloading some risk (that you, the lessee, don't see coming).

[*] which has been in negative "lease rate" territory for much of the last year

[blazespinnaker]

Re: SHORT SQUEEZE IN GOLD: Now they WILL pay you to short gold.

http://www.usmint.gov/about_the_mint...on=fun_facts13

As far as I can tell, the gold belongs to the usmint which is a part of the department of the us treasury.

Feel free to provide some proof that I'm wrong though.

One would think if the federal reserve owned gold, it would store it at the new york fed alongside all the rest of its gold it's safekeeping, rather than at the US treasury bullion reserve.