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

To: RagTimeBand who wrote (24939)	12/26/1998 3:47:00 PM
From: Daytek77	Respond to of 116796

Emory I disagree with this assessment of the market for the following reasons. One of the main concerns that major gold producers have is to replace their reserves with new reserves that are profitable in the current environment. To do this by buying juniors indicates they (juniors) have potential mines that can be profitable at this low price. If that were the case the juniors would find the capital necessary to proceed or would attract other suitors like the Argentina Gold story. ARP is the exception not the rule in the junior industry. Exploration budgets have been slashed to bare-bones levels so that an economic discovery now would truly be a miracle. The juniors that have projects going forward found them when they had more money (2 years ago or more). I doubt very much that the current environment projected 3 years from now will leave the seniors with any property worth buying. I think that the senior gold companies hedged because they felt there would be more than ample supply mainly do to Euro related selling (Dutch and Portugues CB). This has now past and we are seeing many hedges taken out Ashanti recently and Normandy among others in '98. The key IMO is what the European CB's do in the first quarter of '99. If they signal to the the market that the amount of gold will be significantly less I would anticipate more hedge books closed out and a higher gold price as a result. Tony

To: RagTimeBand who wrote (24939)	12/26/1998 11:06:00 PM
From: Zardoz	Read Replies (2) \| Respond to of 116796

"I was thinking about how all these gold companies( namely ABX and PDG) have all these gold hedges in the $350 - $400 range if I am not mistaken, then I thought,"Hey, this is stupid. Why would they hold these hedges, when they could just buy gold at cash today for $290 an close out these hedges for upwards of a %30 INSTANT return?". Why can't everyone consider this: It's the actual buying in the spot market that KEEPS Gold at it's lofty value, and it's the sales on the futures markets that gets eroded. If Barrick unwound it's hedge position{some suggested}, maybe they were trying to create a demand for a over supplied position. YES, it's the fact that manipulation is on the BUY side, and not the sell side. What to see cheap gold, have the hedgers stop buying for one day. Gold is not reflecting the COST OF PRODUCTION. Time to short some more.