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: lorne who wrote (72990)	7/7/2001 1:11:26 AM
From: Square_Dealings	Respond to of 116752

<If the worlds largest gold mining interest is selling gold cheaper than any of their competitors why would any one look to buy gold at a higher price. I don't hold shares in any of the big producers never have and likely never will so I have no bias.> Commodities of all types are hedged, grains, energies and metals are no different. I believe a big difference in gold and silver is that as a store of value it produces no income sitting in a vault. So I think the banks earn interest on the value of the gold sitting in their vaults by loaning people money against it with the agreement that it will be repaid. Its even better for them to show gold as a depreciating asset on their books because then they can write off the value and hang on to the loan earnings. If the market gets tight on gold then the banks can just announce a massive sale to the lowest bidder. This has the effect of putting massive pressure on the producer and I believe many of the miners are forced into forward sales/hedging to keep from going out of business. If the industry consolidates through the majors like ABX NEM AU PDG then there is more leverage to put on the supply side to counter attack the selling. Just like oil and the Arabs, you just stop production and then let the banks get the loaned gold back on the open market. I am in favor of consolidation and I see ABX as a major player going forward. The micro cap gold stocks are actually acting very good lately and I think the word is out that more widespread consolidation is coming. These guys have a plan I believe. M.

To: lorne who wrote (72990)	7/7/2001 10:46:10 AM
From: Rarebird	Read Replies (4) \| Respond to of 116752

What good fundamental reason is there for ABX not to hedge? To bail out "gold bugs" who have been long gold stocks for over 2 decades? Do the "gold bugs" understand the fundamentals of the gold market better than ABX? Please don't make me laugh. Hedging has its place, especially during a Bear Market. The time to cover hedges is when you get confirmation that a Bull Market has begun. You think ABX is stupid or married to these hedges? In contrast to gold bugs, ABX takes the strength of the U.S. Dollar seriously. You disagree with ABX's opinion on the Gold Market? Go buy more unhedged small and midcap Gold producers. Watch what happens as the commercials continue to increase their short position in gold futures: cftc.gov Think it's a conspiracy that the commercials are 45K contracts short? The high tech Polyannas also think it's a conspiracy that all the Insiders at their beloved high tech firms are selling stock like wildfire. PS I'm a "gold bug" too in the sense that I follow the gold market closely. But that's as far as it goes.