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Gold/Mining/Energy : Global Platinum & Gold (GPGI)
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To: Bernard who wrote (11580)10/5/1999 3:33:00 PM
From: Ed Fishbaine  Read Replies (2) of 14226
 
Bernard

The companies whose shares are down are those which are very hedged. They are in trouble since they have written calls at lower prices and/or have sold forward. Selling forward means that they cannot benefit from an advancing gold price. Selling calls means that they are in deep do do to the extent of the gold price rise. Should gold get to $400 there will be bankruptcies. As it is the hedgers have to take a hit as they rush to cover their calls. That's why Barrick and Newmont for example are down. They should be even further down and maybe will get there. The non hedged companies will do fine. The pennies are not responsive at this poiint so do not expect much until later.
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