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Gold/Mining/Energy : Gold Price Monitor

GDXJ 92.99

+2.9%

Nov 7 4:00 PM EST

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To: Robert Dirks who wrote (43373)	10/19/1999 3:52:00 PM
From: Ken Benes	Read Replies (4) of 116753

Robert: Rallies, breakouts, etc, are subject to retracement theory with pullbacks of 50 to 62% likely. In the gold market we are nearing those levels, what is more ominous, the XAU never confirmed the breakout and is headed lower. Should the price of gold collapse, the damage would be enormous to the market. I have long felt that the upside move in gold would be limited without a great deal of fear motivating the market. We do not have that fear and investors money being allocated to the sector is limited. The demand for gold stocks appears to have been limited to the gold bugs. Within the carnage of a breakdown in the price of gold, should it happen, will be the hedged producers. Barrick is currently selling at its 1993 level despite tripling its production and reserves. So much for the benefits of hedging. Investors will shy away from the big hedges from what they saw happening this past month. Hedging appears to be more of a liability than an asset and if it truly is an asset it certainly has not translated to the stocks share price. Why own the hedged producer. Ken

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