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Gold/Mining/Energy : Barrick Gold (ABX) -- Ignore unavailable to you. Want to Upgrade?

To: nickel61 who wrote (1676)	12/29/1999 10:43:00 PM
From: Enigma	Read Replies (1) \| Respond to of 3558

Surely a forward sale is not sold into the spot market? As an example it might be sold forward a year from now. At that point the contract is bought back - for a profit or loss. Gold is sold into the spot market at that time - the proceeds of the spot sale plus the gain or minus the loss as the case may be = the hedged price of the gold sold forward i.e. the price assured by hedging. This is an answer to the simple example you gave - not a sophisticated strategy which might be used in practise.