Tag Archive for: mining

Hedging in the Gold Miners

There are two ways to run a gold mining company. One respects the simple fact that it is producing money. It is not eager to trade its the money it produces for government paper, legal tender laws be damned. It keeps its books in gold, and produces and trades to earn more money (i.e. gold). […]

Guest Post: Why is gold mining such a crappy business?

by Steve Saville Below is an excerpt from a commentary originally posted at www.speculative-investor.com on 12th October 2014. That gold mining has generally been a crappy long-term investment for almost five decades is evidenced by the following chart. The chart, much of the data for which were provided by Nick Laird of www.sharelynx.com, shows the ratio of the Barrons […]

Selling Low and Buying High: Hedging by the Gold Miners Part II

In Part I, I made several points. First, that in the last gold bear market, miners capitulated after prices were low and falling for a long time. Then they sold massive amounts of their future production forward. Years into the subsequent bull market, they capitulated again, this time buying back the rights to their own […]

Selling Low and Buying High: Hedging by the Gold Miners

Hedging is a controversial topic, probably as controversial as any I have written about. Nevertheless, I want to share my thoughts and hopefully add something new to the topic. It is general knowledge that the gold miners had adopted hedging during the long years when the gold price was moving sideways to downwards, culminating in […]