rene's latets on au

  1. Yak
    13,672 Posts.

    Gold continues to perform nothing short of, in my view, amazingly. But I think it is important to note that in Australian dollar terms, it has moved substantially less amazingly than in US dollar terms. On 20th of March 2002, the gold price was US$292 per ounce. Since then, gold has gone up by about US$64 an ounce, or about 22-24% in $US terms. But of course, the Australian dollar at the same time has gone up from US52c to US59c, which is roughly a rise of 13%, which means that the Australian dollar gold price has had a substantially less exciting run than at first glance.

    The only purpose of my providing this information to you is to realise that the bonanza element that perhaps some gold mining companies might be regarded as expecting may not come through for this very reason. It is great news for gold buffs that the gold price has gone up in US dollars, but as I said, in Aussie dollar terms, it has not gone up anywhere near as much and perhaps this is why the Australian gold stocks have performed nothing short of yawningly over the past week or so. Lihir Gold is trading at $1.47 and when the price of gold was US$13 less, was trading at $1.52. Gindalbie Gold is trading at 23.5c as against 25c when the price was lower. Highlands Pacific is in the same category and so are many other gold plays.

    I actually believe that it will require a very large rise that is not merely a reflection of the US dollar weakness before gold stocks can make further headway.

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