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Politics : Dutch Central Bank Sale Announcement Imminent? -- Ignore unavailable to you. Want to Upgrade?

To: loantech who wrote (13814)	4/28/2002 8:20:12 PM
From: sea_urchin	Read Replies (1) \| Respond to of 81271

Tom, your question(s) is/are very important not only to non-SA investors who buy SA golds but also to SA investors, like myself. You are quite correct, appreciation of the USD usually means depreciation of the ZAR and vice versa . So, one doesn't have to be rocket scientist to work out if the ZAR depreciates against the USD and POG in USDs is steady, that the POG in ZARs will rise. In fact, there is a negative feedback relationship which tends to hold the price of gold steady in rand terms At the moment, however (a) the rand is appreciating after a severe shake-out and, in addition (b) the rand is appreciating as the USD depreciates against the other currencies. It follows that if the POG doesn't keep rising in USDs the POG in ZARs will fall. Here are two charts (a) the ZAR-USD relationship (b) POG measured in ZARs (the price of KRs in rands is accurate enough) x-rates.com sharenet.co.za As you see, although the ZAR is now rising against the USD, the POG in ZARs is pretty steady because POG in USDs has also been rising. Looking at the relationship between the SA gold price and SA gold share prices (in ZARs) we see, although the SA gold price has been virtually constant, the different SA gold shares have been going up all the time. Here is the JSE Gold Index plus charts of the three stocks which interest you, all in ZARs on the JSE. sharenet.co.za sharenet.co.za sharenet.co.za sharenet.co.za In conclusion, my advice to you is not to be too concerned about the gold price in rands. More significant is still the gold price in USDs and the performance of the various SA gold stocks on the NYSE which, at present, show no signs of weakness.