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Gold/Mining/Energy : Gold Price Monitor -- Ignore unavailable to you. Want to Upgrade?

To: d:oug who wrote (37688)	7/23/1999 11:04:00 PM
From: Ahda	Read Replies (2) \| Respond to of 116764

It was an Achilles heel. It curtailed growth and created to a certain degree the depression of 29.

To: d:oug who wrote (37688)	7/24/1999 10:42:00 AM
From: goldsnow	Read Replies (1) \| Respond to of 116764

Doug, This Market is the Achilles Heel <VBG> Gold Falls as Newmont Says It Will Hedge Production (Update1) Gold Falls as Newmont Says It Will Hedge Production (Update1) (Updates with final price.) New York, July 23 (Bloomberg) -- Gold fell for the first time in four days as Newmont Mining Corp.'s decision to hedge some gold production on the options market signaled that the largest U.S. producer is expecting prices could fall even more. Newmont will buy put options for some future gold production, fixing the price as a hedge against a falling market, said company spokeswoman Jodie Bochert. The move, first reported yesterday, raised concern because Newmont has avoided hedging in the past. Gold is trading close to a 20-year low. ''There seems to be a bit of panic from the producer side,'' said George Dlugosh, a vice president of precious metals at Royal Bank of Canada in Toronto. ''Here we have Newmont, one of the largest unhedged producers looking into hedging. It has to have a dampening effect on the market.'' Gold for August delivery fell $1.30, or 0.5 percent, to $255.40 an ounce on the Comex division of the New York Mercantile Exchange. Prices have fallen 12 percent since early May when the U.K. said it would sell more than half of its gold reserves. For the week, gold rose 90 cents. In London interbank trading, gold for immediate delivery fell 80 cents to $254.65 an ounce. Denver-based Newmont said it decided to acquire options to sell some of its future gold production rather than contracting directly with buyers. A put option gives a holder the right, but not the obligation, to sell a commodity at a fixed price and time. The last time Newmont engaged in hedging was in 1992, Bochert said. ''This is not a fundamental change of company philosophy,'' she said. ''This is only for protection'' against lower prices. Newmont hasn't decided how much to hedge, she said. Barrick Gold Corp., the world's fourth-largest gold producer and the biggest user of hedging, has said it has contracts to sell 13.3 million ounces of gold through 2001 at a minimum of $385 an ounce. The Toronto-based company expects to produce 3.6 million ounces of gold this year. NYSE/AMEX delayed 20 min. NASDAQ delayed 15 min. Access More Information and Services Above ©1999 Bloomberg L.P. All rights reserved. Terms of Service, Privacy Policy and Trademarks.