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Author Message  ken Member Username: ken Post Number: 215 Registered: 04-2003 Rating: N/A Votes: 0 Thursday, July 14, 2005 - 09:40 am:     It has always confused me that when the USD gold price changes, Aussie gold stocks seem to follow, but that there can be, due to currency movements, no change in the AUD gold price. It would seem to me that Aussie miners operating in Australia and reporting in AUD, or even those just with share prices in AUD, should not have profit affected by a USD gold price when the AUD price doen't change. Further, some recent USD price changes have been almost completely due to changes in the AUD/USD, suggesting that the price is only changing in USD and the price in producer countries like Australia is stable. Are there other factors that result in share price changes like commodity or currency contracts taken out by various companies? All very confusing to me - I would really like this explained. Also shoot down my assertions if appropriate. Regards, Ken Price is the leader of the market crowd. (Elder) Members of the crowd follow the leader and experience the same emotions as each other. To be independent of the crowd we must not change our behaviour with price.  rederob Member Username: rederob Post Number: 1080 Registered: 10-2002 Rating: N/A Votes: 0 Thursday, July 14, 2005 - 12:51 pm:     ken i think you are right, prettymuch the typical trader sees POG increase and assumes that it means the OZ miner/producer will reap a profit but unless it translates back to a profit for the miner via the prevailing exchange rate, then there may not be a profit after all this gets murky when the miner/producer has hedges in place and can outperform the prevailing market the other aspect to look at is "cash cost" versus total cost of production - the latter could include costs we don't usually think about, such as site rehabilitation i personally like to look for nil or minimal hedging and a reasonable profit margin per ounce produced (preferably over AU$200) i have not liked LHG in the past as it had a few too many risks attached - but reckon it could be time to run the fine toothcomb over now that the geothermal powerstation is kicking in and reducing energy costs

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