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Gold/Mining/Energy : Gold Price Monitor

GDXJ 118.97

-0.9%

Dec 24 4:00 PM EST

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To: Alex who wrote (2879)	11/6/1997 10:44:00 PM
From: Claude Cormier	Read Replies (1) of 116824

<< The company representative goes to a bullion dealer who agrees to pay him, for example, $500 per ounce for Gold to be delivered two years from now. The Gold company has locked in a profit, and on top of that, has the money now for Gold which is still in the ground. >> I don't think that this is right. The Gold company gets the money and profit once the gold is deliver several months years down the road. It will get a profit immediately only if it buys back its contrat at a lower price before delivery time. Maybe I a wrong, but that is the way I understand forward sales mechanism. The rest of the story is just fine.

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