|Dan & Wade et al,|
I didn't find anything in Barron's this past week concerning PMs; however changes in lease rates may be telling us something of interest. I've noticed that lately the gold lease rates, which are very low, move up when the POG moves up. This correlation is the same as during the late 90s when the price was declining. However, it seems to me that it is now reflecting a shortage of gold available to lease; that is, CBs are less willing to lease. This seems bullish to me. The story being told by the silver lease rates is clearer. The lease rates are very high and rising suggesting to me that stock piles are in fact dwindling as has been stated by several gurus.
The copper situation is at least as interesting. Note that its price continues to make to new highs even though gurus continue to say it will fall with an increasing dollar. It hasn't. It is clearly in short supply.
The GMI/POG ratio:
On 9/29, the Barron's GMI was 781.95 up significantly from the previous week's 747.47. With the POG also up at 473.25 (9/30), the ratio was up at 1.65.
I believe the ratio has reached the high side of the middle range but that it doesn't yet suggest strongly a rise or drop in the POG or stocks. However, I can't access the website with the data on the meaning of the ratio. It may have been shut down. If we can't access it, it is not clear to me that continuing to post the ratio is worth while. I can't seem to find the time to put the data in a spread sheet; so that we could build our own model.
The ratio a year ago was 1.61, almost as high as today.