In poker, there are often subtle, hidden signs(tells) that one can read from other players in order to ascertain their next move. We may be seeing such “tells” in the gold markets. We have seen a spike in gold lease rates as of late, driven in large part by a number of divergent players; namely institutional gold ETF holders and physical gold buyers. The 300% increase in gold leasing rates over the past several months is most likely tied to the exit of previously long term holders of gold, mostly via ETF’s. The absence of patient holders of gold meant a lack of available lendable metal to the market, hence the rise in leasing rates. Combine this situation with a demand for physical metal, particularly from India as well as banks (to facilitate producer hedging). Evidence of this short term demand imbalance can be seen in the futures markets where the front end of the curve is currently exhibiting backwardation, a situation almost non-existent in a normally functioning gold futures markets. Thus, in a currently downward trending market, we see a multitude of relationships which have not occurred in several years. Combine this with a widespread negative view of the metal, as evidenced by near record short futures positions, and a potential inflection point in the market is possibly at hand. However, we would be hesitant to position ourselves for any upturn in the gold equities, as we are beginning to see evidence of a newfound affinity for hedging among the gold miners, driven by high costs and high debt levels.