Look thanks but this is the part I can’t get my head around.
Based on my research on a worldwide basis in order to supply demand a gold price of $260 USD is unprofitable when all factors are taken in to account.
In other words if this price was sustained investment in gold mining would cease and supply would reduce.
If that is correct why were gold lease rates at their highest when gold was trading in $260 area.
If all the above is correct then based on your explanation those that took out leases at those rates were either stupid or ill-informed.
If on the other hand if Gold lease rates operate similarly to the normal leasing we are accustom to then it would have been a profitable experience. Say you leased for $260per oz at 2% for 12months at the end return it and get $310 less 2%.
I had to read it again.
So gold leasing does work like normal leasing but it’s what done with is afterwards that may encourage attempts at manipulation.
Now if some lease large amount of gold, sells it buy stock, stock goes down, gold goes up and the gold owner what’s it back Hummm that would hurt.
So I guess you encourage gold producers to hedge to stop that happening.
