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Gold/Mining/Energy : Precious and Base Metal Investing -- Ignore unavailable to you. Want to Upgrade?

To: tyc:> who wrote (8156)	2/27/2003 12:04:25 AM
From: LLCF	Respond to of 39344

< Sorry thread, but there may be a fallacy to our logic. We supposed that the only change was a fall in the value of the US$. But gold is measured in US$. If the price of gold measured in US$ does not change or even falls, then the price of gold in higher value Canadian dollars will fall, and the value of the company in Canadian dollars may fall also.> LOL.... wowa! That's your logic! One thing at a time! DAK

To: tyc:> who wrote (8156)	2/27/2003 6:47:35 AM
From: John Dally	Respond to of 39344

I think the focus should be on where the revenue-producing assets of a company are located. The price of gold, in the local currency where the gold is produced, relative to the cost of production (inflation) is changing at varying rates, depending on where a gold-producing asset is located. Therefore, profitability is increasing for assets in the weak currency / low inflation countries and decreasing in the strong currency and/or high inflation countries. It's the changes in profitability that will effect the share price. Right now, it's better for a company to have gold-producing assets in Mexico (or South America) than the US, and better in the US than Canada (or Australia or South Africa).