Duchaf

Thanks for the explanation. I thought it might be this, but there seems to be a lot of people who read it as the actual loan rate (= forward rate). So the fundamentals of this move in lease-rate are bullish (recall, counter-party risk, inflation risk) ... or possibly bearish (lots of investors think it is going down, so are shorting) ... so, anything could happen on Monday...

Fair point - we should concentrate on the real fundamentals - bailing out banks, printing money, etc, etc. I certainly intend to remain long and top up on dips as funds become available... It is getting very messy.... how much reach would the fed have in the UK - but I suppose a mess in the US is a mess for everybody.. Anyway, I guess we'll just adopt the same policy in 3 months, as usual This is a good point to say thanks to you, GF and the others for all of your advice over the last 12+ months - I feel my family has at least got some security. Still pretty worrying, though.

Thanks Pluto I think I should have been a bit more simple in my first post ... I still don't really know what the Kitco lease rates are. are they the actual 'interest rate' that you'd pay on the loan, or are they the more complex 'discount from LIBOR'? If they are the latter then the situation would be as you describe here: Otherwise I guess the same assumption would mean an expectation that the price of gold is going up. I'm struggling to read much from any of the market indicators...!

I also find all this lease-rate stuff confusing I seem to have picked up that there are two ways to express lease rates - the actual leasing cost (equivalent to APR, say - I think this is properly called the forward-rate) and the discount from LIBOR (ie, the expected percentage gain for the borrower compared with the value of money - assuming the price of gold remains constant). Note that this latter approach has cheaper borrowing expressed as a positive lease-rate. I thought the Kitco lease information was expressed as the discount from LIBOR. This would mean that they're not actually paying you to borrow the gold - quite the reverse .. At the moment the quoted lease rate is negative, suggesting that gold has a higher lending rate than LIBOR. Or, put another way, this would suggest that at the moment gold is being valued higher than money by the markets. Isn't this a bullish sign for gold? (Still, gold is being lent out at lower rates than banks are lending money to each other... perhaps they do value money higher after all...) Kitco quotes a lease of -0.07ish for Friday, which is only just negative, but at least it is negative. The spike for Friday's lease rate at -2.5ish (if it isn't just an anomaly) could mean that there was strong interest in borrowing gold (say, to roll-over a short, perhaps because of an expected increase in the price of gold because of news leaked that was to be announced over the weekend...), but few willing to lend it (say, because of a perceived risk that the lenders wouldn't return the gold, or the day's allocation for leasing being fulfilled ... or perhaps too many people are now hoarding gold...) Or is the above the reason I should stay with cash in the BS... [hello all - my first post so be gentle... ]