Forum Archive Index - February 2004

["Woody" <solarmax@optusnet.com.au>]

BaaBaa

In my opinion to trade or to invest in the precious metals without trading
the forex market as well is a recipe for disaster.
In days gone by a rally in gold sent the USD/JPY to the floor, a decline
sent it thru the roof. These days that power has been transferred to the
Euro. The present boring range that has grinded the USD/JPY to an almost
halt is proof of that.
The once volatile US Dollar and the sedate Euro have swapped, ever since the
Euro reached parity.
The phrase Buy Gold $ell the Dollar has now become Buy Gold $ell the Euro.
$o you see a good knowledge of the directions of the various Forex Swap
currencies is a deciding advantage to making money in the Cash World and
lets not kid ourselves Gold is no longer a precious metal it is a currency.

Woody
----- Original Message -----
From: "Baa Baa" <baa_baa@hotmail.com>
To: <sharechat@sharechat.co.nz>
Sent: Thursday, February 05, 2004 1:30 PM
Subject: [sharechat] AUS Gold Stock weakness


> ... Checking out the POG in $Aus shows a steady decline since late Dec03
in
> an overall declining market.
>
http://fx.sauder.ubc.ca/cgi/fxplot?b=XAU&c=AUD&rd=365&fd=1&fm=1&fy=2003&ld=3
1&lm=12&ly=2004&y=daily&q=volume&f=png&a=lin&m=0&x=
>
> Aus Miners will continue to experience weakness until the POG in $Aus
> recovers. (same deal for the SA's, NZ's) This is a factor of:
>
> - dig up the gold in $Aus = expenses
> - sell the gold in USD = income
> - convert USD income to Aus, minus expenses = P&L
>
> Until the Aus declines significantly against the USD, or put another way,
> until the POG in $Aus breaks trend and goes upwards, revenues after Forex
> will decline (for the same volume) and P&L will suffer. This is compounded
> by FA valuing reserves in a strengthening currency environment, i.e.
> Reserves @ $US-oz / forex rate = declining value of reserves in local
> currency = FA weakness.
>
> The trigger event we're all waiting for is when the countries with the
> strongest currencies against the USD realise they're importing US
inflation
> and their economies, esp exports, -ergo balance of trade, is suffering ...
> AND ... their response has to be to intervene through competitive currency
> debasement.
>
> We've talked some already about phase two being competitive debasement. By
> all accounts, it would appear that it hasn't really started yet, so in the
> interim, we can only look for the pain to continue, or, hope that Gold
> appreciates in USD faster than the Forex effect takes it away.
>
> "What Gold bringeth, the Forex effect taketh away".
>
> _________________________________________________________________
> Surf the net and talk on the phone with Xtra Jetstream @
> http://www.xtra.co.nz/products/0,,5803,00.html !
>
>
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