Barrick Gold: Here's Why We Eliminated Our Gold Hedges, Just As The Marked Started To Peak

barrick gold liquidity

Just last week, major gold miner Barrick Gold (ABX) announced that it had fully eliminated its hedge book, and so from here on out, its earnings would be fully exposed to the price of the metal.

When it was announced, the stock popped, since everyone’s bullish on gold. But on Friday the gold market tanked on huge volume, sending Barick shares down nearly 9%.

So was de-hedging the right move?

As it happens, on December 1, the company presented at the Scotia Capital Precious Metals Conference, during which they explained some of their rationale. Let’s hope they got their timing right.

Now, see the presentation >>

First, look at all the liquidity out there

The dollar is going to garbage, so gold can only keep soaring

And besides, gold kicked everyone else's arse this year

And for the past 10 years, too

Now look at the state of the mining industry. There's going to be less and less gold coming out of the earth.

About those worthless dollars we mentioned before. Central banks are over-stuffed with them.

Central banks aren't selling gold any more. They're buying!

There's tons of paper sloshing around. Not much gold.

So in short, we're really bullish on gold

And, most importantly, our investors want us to be more exposed.

And as for Barrick, we're kicking arse.

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