DROOY Comments About Industry Price Control Discussions
Interview with MIKE PRINSLOO - Monday, 26 April 1999
<< MIKE: Very simple question here. With the gold price being depressed with the Bank sales, and the supposed world monetary fund sales, is it not possible, maybe, to restrict supply from South Africa for maybe three months, in a similar way to what Opec has done with the oil? Because Opec seems to have increased the price of oil by doing this - from about R12 to R18 dollars a barrel - very quickly?
MIKE PRINSLOO: Yes, I think there's definitely an opportunity for that, Mick. It just needs a co-ordinated approach from all the producers and, towards the end of last year, there was an initiative that was led by Bobby Godsell from Anglogold to get all the big producers together to actually look at ways of how one can control the gold price, rather than let the banks control the gold price.
AH: Well, at least, just to stop hedging or stop selling forward gold production, wouldn't that be a start? To actually not sell anything that you produce, I guess, would not be that easy, you don't have the cash reserves to carry it for long, but this hedging story - that must affect you in the long term?
MIKE PRINSLOO: No, definitely - that is one of the big reasons why the price stays depressed. As soon as the price spikes, then producers would sell forward to gain that advantage, and I think that's because of the volatility we've seen in this consistent sort of depressed gold price that has come from $420 down to $280, and now people are talking it down to $265 and $250, but sometime the shorts must turn, and the risk must be that high to press it further down, and then it will turn around, and then all the reasons why they use gold as so negative now, will just turn into positive, and rally it up and make a lot of money on the way up - just like they've made money on the way down. >>
Message 9164215
Morning Searle,
Very interesting comment.
John |
