Barrick Gold (ABX) Message Board

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Gold/Mining/Energy : Barrick Gold (ABX)

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To: nickel61 who wrote (1994)	2/6/2000 12:32:00 PM
From: baystock	Read Replies (2) of 3558

On monday we will get to see if ABX is FOR or AGAINST a rising gold price, since if they were to announce the same as PDG we will get another large rise. From lemetropolecafe.com <<Same basics that long time Caf‚ members are aware of: there is a 120 to 150 tonne monthly supply/demand deficit at $285 gold with around 10,000 tonnes of gold lent out by central banks. The big shorts have been counting on producer forward sales every month to fill the monthly supply/demand gap. Placer Dome just announced they will deliver into forward sales as they come due, not sell forward anymore as has been their practice. Gold shorts can color that future gold supply gone! Barrick may do the same. The pressure will be on other producers to follow suit. The reason for the pressure on hedged gold producers could not be more obvious. Gold press reports all credited the Placer announcement as the reason for the big Friday $23 rally in the price of gold. Does that mean if 5 other major gold producers announce the same thing, the gold price rallies $115? If just one announcement can have that dramatic effect on the gold price, shareholders will scream for all the heavily hedged producers to the same thing. Gold share prices soared on Friday. One has to wonder what has taken the producers so long to make moves such as Placer?s? Do gold producer shareholders want their firms to reduce hedging and have their investments double in value - maybe triple - because of soaring gold share prices. Or, do they want what they had the past couple of years: big hedges on the books and share prices in the dumpster? Talk about begging the question! The pressure on Barrick Gold will be immense when it makes a financial presentation to analysts tomorrow.Placer President Jay Taylor said on Friday that "industry needs to do its part" - in essence "issuing a challenge to other producers to rethink their hedging stances"(Reuters). If just Placer Dome's announcement can move the price of gold up that much, then how can Barrick tell financial analysts that they will not change their policy? My guess is that if that happens, many of the attending financial analysts will just go home and sell Barrick stock. It would be a disastrous decision by Barrick and probably would only be made if the call comes in from Washington to do so, which would be further evidence of U.S. "officialdom" meddling in the gold price.>>

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