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: tyc:> who wrote (60451)	11/3/2000 1:47:06 AM
From: goldsheet	Read Replies (2) \| Respond to of 116764

> The Australian producers have sold their gold forward for Australian dollars. How can that leave them with a currency risk ? If they consumed all production within the country there would be no currency risk, but they have to export it into the world market where they get paid in $US. Therefore, if they hedged in $AUS and the $US dollar is strong (like now) the hedges when marked-to-market result in losses. Gold in $US has been going sideways, while it appears to be in a bull market in $AUS, but it is really due to the currency. If they had written the hedges in $US, it would have protected them against both the commodity and currency risk. Hedging written in $AUS are now underwater, due to a strong $US not strong gold prices. Writing gold hedges denominated in $AUS is a mistake (IMHO) in a world where gold is traded in $US.