Barrick Gold (ABX) Message Board

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Gold/Mining/Energy : Barrick Gold (ABX)

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To: Ken Benes who wrote (1242)	6/5/1999 1:08:00 PM
From: Exsrch	Read Replies (1) of 3558

Ken, <<The 12.5 million ounces of gold sold forward by Barrick is the equivalent of 400 tonnes of gold. This is almost the exact amount to be sold by Britain in the future. If 400 tonnes in sales can knock 30.00 from the price of gold, imagine what would happen if Barrick announced that they would close all of their positions. Extrapolate this to the entire gold industry and it is no mystery why the price of gold is so low>> I would reply with the following: 1. It is difficult to pick a point in time and determine the relationship between new CB gold available on the market and spot price changes. It is fear and greed, I think. The fear that more CB, switzerland and IMF may sell gold. 2. ABX can't close out and deliver 12.5 MM ounces all at once that is a practical impossibility (they could borrow more gold to pay for borrowed gold, but why?). ABX only produces ~3.6 MM ounces a year which the market is already aware of. Hence, gold prices have been determined already factoring in ABX's production capability (although I am not a complete believer in the perfect market). Hence, we cannot effectively extrapolate this to the market. Your comments and thoughts would be welcome as would the comments of others. Cheers, Exsrch

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