lease rates - 6 mth, 1yr

Well something curious is happening with lease rates... this is particularly evident in the relatively large falls in the 6mth and 1yr rates.

I was waiting for the 6mth to enter -ve territory and here it is in a big way. Next qn - Will the 1yr rate dip its toes into the -ves?

I'd say this leasing en-masse is to ease overwhelming demand pressures in the PM (AU) complex.

It's a possible band-aid measure to aid the roll-over of significant (short) positional pricing pressure from the short term to the longer term - ergo to delay the inevitable run up and buy time for a/the big player/s to exit or adjust positions.

May 25, 2010
Change
1 m -0.1980% -0.0533
2 m -0.2060% -0.0612
3 m -0.1577% -0.0724
6 m -0.0969% -0.1082
1 y 0.2121% -0.1578

This is not an isolated event which implies a mega player (or multiple) is involved. To apply pressure on all fronts the following moves have transpired in the past month or so, accelerating over the past trading week:

1. Other PMs seriously gutted (to discredit all PMs esp. AG, Plat and Palladium)
2. Heavy promotion of 'alternative' alternatives e.g. Rhodium Sponge (what-the?)
3. Much Stronger $US, much weaker oil.

Yet gold remains steadfast.

I sense a change of direction in an otherwise one way street and traffic control is sweating... how many levers do they left to pull?

Remember too the oft quoted 100:1 leverage in paper gold.

What does being on the wrong side of this trade mean to your investment banking career?

How long before the juniors start getting some serious attention and the usual selling into strength, or worse still just plain naked selling, is met with open arms by large buyers with deep pockets?

I'm thinking strategic buyers along the lines of Kaplan et al...