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Strategies & Market Trends : Trader J's Inner Circle
NVDA 199.04+5.7%3:59 PM EST
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To: Trader J who wrote (22741)11/11/1999 9:03:00 AM
From: R L  Read Replies (2) of 56532
 
TJ; >Nicole: I think gold is a pretty safe bet here, and shouldn't do anything but get stronger the further we get into the 4th Qtr. NEM and ABX still look like good plays<

I agree that everyone should have at least a small % of gold holdings at this time. Just be sure that you are buying companies that will participate in any rise in the price of gold. You may have read about the recent Ashanti debacle where the recent spike in gold prices almost put them out of business due to their over aggressive forward hedging program.Only a bailout prevented this.
NEM has sold some calls on forward production but only a small % and is IMO a solid gold investment. I am not as enthusiastic about ABX which has extensive hedging in place. While it's not possible to know their complete program, knowledgeable industry sources believe that their forward sales are advantageous to ABX up to a price of about $325. If gold should rise above this level ABX's forward sales begin to be problematic. The higher the price rises the worse the problem.
In Canada T.eld and T.arz are junior producers that will participate
in rising gold prices. T.wrm is unhedged. In the US GOLD on the Nas and GSR and AEG are worth a look.
There are others,I just caution to be sure you are investing in a company that will benefit from higher gold and not suffer.

Regards,
RL
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