Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Rarebird who wrote (47188)	1/17/2000 12:25:00 PM
From: Ken Benes	Read Replies (3) \| Respond to of 116791

Looks like gold is up a couple of bucks in London. If we get a short term rally, nem offers a good trading opportunity. I would not consider ABX at all, it will be a lackard, and will continue to underperform nem into the future. As a matter of fact if I had a position in ABX, I would sell into any strength. ABX is one of the least desireable gold stocks to own at the present time. It has little or no upside and as we have seen its hedging policy has not protected it from the downside. In fact its enormous hedgebook has made it the senior gold producer a leader to the downside. Barrick has and will continue to add articfical supply to the market putting downward pressure on the pog, unless its low shareprice and a growing awareness of its practices instigate a change in its hedging strategy. This may happen since this model strategy has made abx an underperformer. A side note, rising interest rates may be playing havoc with those companies/individuals who leased gold from the cb's and invested the proceeds in treasuries. As the yield rises, the value of their bonds are going down. If leverage was used for the initial purchases, these guys can wind up in big trouble very fast. The more they lose in their bond transactions, the less they have left to repay the gold they borrowed from the cb's. I would think the anxiety level is rising for many of the bullion banks that are involved in these transactions. If the value of the bonds are market to the market, the bankers will have a minute by minute update of how far underwater these investments are. Rising interest rates will pressure hedgebooks regardless of what the price of gold is. This is something that should be watched very carefully. Ken