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Gold/Mining/Energy : Gold Price Monitor

GDXJ 105.34

+5.2%

Nov 26 4:00 PM EST

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To: d:oug who wrote (60439)	11/2/2000 6:24:55 PM
From: tyc:>	Read Replies (3) of 116768

What hedging does is "lock-in" the existing situation, to eliminate risk. Clearly if your expenses are in Australian dollars but your revenue is in American dollars, there is a currency risk should the US$ fall in value viv-a-vis the A$. They hedge their production in Australian dollars to eliminate that risk. In so doing, they forfeit the benefits that would accrue IF the Australian dollar were to FALL in terms of the American dollar. That has happened and the amount forfeited is being blamed on hedging !! Seems to me it is too late to lock the stable door now.

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