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Gold/Mining/Energy : Gold Price Monitor

GDXJ 98.59

-2.8%

Nov 13 4:00 PM EST

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To: Richnorth who wrote (37805)	7/26/1999 12:11:00 PM
From: Zardoz	Read Replies (2) of 116759

I recieved email and PM's that suggested that NEM was going to be buying puts to hedge. Writing calls, which is the opposite of buying puts, is the better solution from any producer/hedger if the direction gold is going to go is lower. UNLESS you feel the price of gold is going down dramtically, in which case you write the call, and buy a put. But if NEM is just buying a put then NEM must spend money... yet writing the call as ABX does, gives them money {But ABX still needs a gentle orderly market of decreasing price of gold to profit}. writing a call means you believe the POG will stay in a tight range, or go lower. Buying a put means you believe the POG will go lower. If it stays the same, why buy? Conclusion Both ABX and NEM believe the prices will go lower! Having NEM and ABX both in the futures market with PDG and others, is going to make the whole place crowded. One sneeze, and the run up can be fast and beautiful. Hutch #reply-10634240

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