Quote:
=Flugenbear;410994]
elZ, do you know what exchange rate GEL have based their figures on?
Do they have any USD hedging in place? If not, now could be a good time with the USD falling to 0.79. Of course it could still go down further but the smart money is probably on a rise above .80 again, and probably higher...
As you say gold is hovering around that $1400 mark, that really needs to hold, a fall much below that and the high exchange rate could see an end to the placer projects for now.
I have tried to figure out what the direction the gold price might take and read a lot of stuff, but I have to admit I am more confused than when I started! There seems to be valid arguments both ways, but the general consensus was we should be somewhere near the bottom now...I hope so.
But at the end of the day anything could happen....
Hi Flugenbear - yes I agree the lower exchange rate at 0.79 will work in GEL's favour, if the gold price is stable. I've never seen any mention that they have locked any rate in, maybe they have. But it's still early days. They assumed a rate of 0.82 in January 2013. It climbed up from there, but is now back down below the figure. See charts. The more recent form is that a small dip like this will be corrected, and the US$ will weaken, or ours will become stronger relative to the US$.