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

To: Greg Ford who wrote (9163)	4/2/1998 12:42:00 AM
From: James F. Hopkins	Respond to of 116756

Greg; All I see is options are a from of futures, some times more money may be bet in the option pits than the futures pits. I suppose ther is all kinds of hedgeing..but there should be a way of seeing the net bet forward..I jus don't have the time to hunt it all down..but for sure if the big dealers are stuck with taking a lot of gold at some forward price that's much higher than it is now they will put their heads together, and one way or another get the gold price up. --------------------------- I been around long enough to know that the middle man makes more dough ( profit ) than the producer..from farming, to fishing.. and I'm sure it's the same with gold. But I have no idea of who or how the bets are layed out at this time. Jim

To: Greg Ford who wrote (9163)	4/2/1998 9:59:00 AM
From: Enigma	Read Replies (4) \| Respond to of 116756

Since Barrick's production is already hedged it doesn't matter if the price the gold is sold at is today's price, or anywhere between it and the forward price. Let's say the average hedged price is $400/oz - Barrick will get this price even if the spot price stays at $300. i.e. it will get $300 cash and $100 by buying the forward contracts as they come due (400-300). If the spot price moved to $500 Barick would still get $400. i.e. $500 cash less $100 loss on buying back the forward contract. However the beauty of Barrick's situation is that it has call options in place to ensure that it participates even when the spot price exceeds the forward price - the last I heard was that it will participate to the extent of 60% of a move beyond the hedge price. Very clever, and innovative. (I notice that Peter Lynch completely missed this in his (positive) comments about Barrick)