Yes, gold dehedging will end, but central bank reserves will run out too

Section:

1:30p ET Sunday, May 18, 2008

Dear Friend of GATA and Gold:

MineWeb reports about a study that, while finding a huge reduction in gold hedging by mining companies in the first quarter of this year, predicts that dehedging will end in 2009, removing a big support for the gold price. But such warnings don't always take into account the simultaneous reduction of the Western central bank gold reserves from which market-suppressing gold sales and leasing are drawn.

The looming exhaustion of those central bank gold reserves -- already coming into view as the central banks fail to meet their sales quotas under international agreements -- could support the gold market just fine when the miners stop buying their hedged gold back.

You can find the MineWeb report here:

http://www.mineweb.com/mineweb/view/mineweb/en/page33?oid=53109&sn=Detai...

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

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