Very curious correlation.
As you know:
Lease Rate = LIBOR - GOFO
And a negative GOFO means there is stress in the gold market. A negative GOFO means that the Lease Rate is high. So stress in the gold market is associated with a high lease rate.
Whenever the gold price goes up though, the stress in the gold market will go away and the lease rate will go down.
Lately I see that the GOFO rates are turning positive and rising again, which makes the lease rate go down. The gold lease rate is topping out.
If we look at history, we will at least see a $2000/ounce gold price somewhere in the next two years if lease rates go back to the 2012 lows.