Larry:
Thanks for the post and information. I think that the
XAU is not a very representative index any more.
Barrick gold represents a large part of the index,
for example ( I vaguely remember 40 %), and if you look
at charts, Barrick is down to lower levels than
where it started prior to the major recent gold upsurge.
On the other hand, many South African gold stocks and
many N. American gold funds, e.g. Fidelity gold (fsagx)
have corrected from their recent peak, but have NOT returned
to the same lows. I.E., so far, FSAGX has only lost
about 50 % of the recent gain. Consequently, the GMI
may be a more representative index now than the XAU.
I think that the marketplace has spoken about Barrick's
hedges, and no matter what the company says, or any
hedging experts postulate, the market response to Barrick
is obvious. Good company, but stock is not expected to
perform well in a major gold up-move. I think, as I believe
that you do, investing in relatively un-hedged issues
offers the best opportunity for gains in a major gold
move. I think many gold fund managers are realizing this,
and no doubt lightening up on stocks like Barrick.
Regards
Dan |
