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Gold/Mining/Energy : Gold Price Monitor

GDXJ 94.04

+0.6%

Nov 21 4:00 PM EST

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To: donald martin who wrote (33736)	5/12/1999 2:18:00 PM
From: John Hunt	Read Replies (2) of 116764

That takes the gold price risk off of the table Hi Donald, It doesn't really eliminate the risk, it only defers it ... If gold went to $800, they would have to take a future asset worth $800 to replace something they sold at $300 ... They still are out $500. The sale is naked unless covered by gold in a warehouse ... Until they actually mine it, it just provides security for their naked short. Barrick is a Canadian company, probably investing primarily in US T-bills or short term US Treasuries. To me that exposes them to US/Can currency risk and they also have the fluctuating values of the short term treasuries. Or am I missing something here. :-)) John PS - I don't trade futures, but I do understand options pretty well.

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