Gold Hedge Book – Say Goodnight, Gracie
Information just out is revealing that by the end of this year, the Gold hedge book of the large gold producers will be effectively reduced to zero. In fact, it will be down to just Barrick and Anglo Gold.
This is bullish for the price of Gold, and, we hope, for the Gold stocks we invest in. Selling forward made good business sense for most of the excruciating bear market that these companies had to endure. But that’s over now.
Some ask why the Gold stocks haven’t performed better. Well, the same inflation that eats away at the budget of you and me hits Gold producers in spades. They have been buying only what they need for years and now have to ramp up operations sometimes paying a premium for equipment and skilled labor; the latter of which there isn’t much of, at least below the age of 55.
And how about that dollar? For many of these producers, revenue comes in via the US dollar, but expenses are paid in Canadian dollars or South African – both of which have appreciated nicely against the US dollar. Hit by both sides.
Ultimately, I feel the price of our favorite yellow metal will carry the day – and our stock picks – much higher indeed.
If you are like me and can’t put your boots on the ground to check out these mining companies for yourself, you better enlist the help of pros who can and do, regularly.
For larger capitalization Gold stocks of a more conservative nature, choose Casey Big Gold.
For smaller, more volatile and possibly more profitable picks, choose Casey International Speculator.
For best results, and the least chance of missing the biggest bull market in Gold, Silver, and other precious metals in our lifetime, choose both.
