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Of Interest to GOLD BUGS
purch
Posts: 9,865 Forumite
Interesting story from Mineweb.com concerning Barrick Gold
More than two decades ago, Barrick transformed the international mining industry with its new-fangled policy of hedging gold production. Now Barrick admits it's finally time to let its hedgebook go.
http://www.mineweb.com/mineweb/view/mineweb/en/page34?oid=88850&sn=Detail
Hedging Gold production was/is a useful tool when the product being mined is in either a Bear market or the martket is particularly Volatile.
The fact that a company as large as Barrick are intending to stop hedging shows their view on the future price of Gold is broadly positive.
Might have a short term negative affect on their share price however.
More than two decades ago, Barrick transformed the international mining industry with its new-fangled policy of hedging gold production. Now Barrick admits it's finally time to let its hedgebook go.
http://www.mineweb.com/mineweb/view/mineweb/en/page34?oid=88850&sn=Detail
Hedging Gold production was/is a useful tool when the product being mined is in either a Bear market or the martket is particularly Volatile.
The fact that a company as large as Barrick are intending to stop hedging shows their view on the future price of Gold is broadly positive.
Might have a short term negative affect on their share price however.
'In nature, there are neither rewards nor punishments - there are Consequences.'
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Comments
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Many in the world fall into the conspiracy/manipulation camp. I'm more of a c0ckup theorist. So take my GATA links as being "for info only"
I'd say that Barrick are making a judgement that gold is going to rise, and want to keep the lions share of profits for themselves.
The gold bugs are getting very excited, as one would expect.
For me it just seems to be a prudent move to boost the share price and returns to shareholders, which is after all a CEO's job and could explain the recent changes at Barrick.
As the BNP/Paribas link from Kitco shows they are not the only miner de-hedging either. Edit go back to August 11th for report.
http://www.kitco.com/reports/
http://news.moneycentral.msn.com/provider/providerarticle.aspx?feed=MW&date=20090908&id=10372575
http://jessescrossroadscafe.blogspot.com/2009/09/barrick-capitulates.html
http://www.gata.org/node/7773
http://www.gata.org/node/77740 -
I don't know what all the excitement about gold is at the moment. The recent price rise has absolutely nothing to do with demand for gold, and EVERYTHING to do with a weak dollar.
Same with oil. People talk about a surge in oil prices over the last few months. Nonsense. Priced in Euro it has stayed virtually flat.0 -
The recent price rise has absolutely nothing to do with demand for gold, and EVERYTHING to do with a weak dollar.
For me that is one of the main reasons to hold gold, as an insurance against a weak, or even collapsing, currency.
The "high" price in UK is entirely down to $/pound forex fluctuations.
On Feb 20th this year when $pog was the same as today gold in UK was 690 pounds an ounce, not 600 as today.
One thing is for sure, somebody is buying and creating the demand.
http://www.lbma.org.uk/?area=stats&page=gold/2009dailygold0
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