AcronymYou asked the question, and then went on to state:"Is the...

Acronym

You asked the question, and then went on to state:

"Is the producer selling gold in A$, US$ or other currency. This is important because A$ gold has not increased in value as much as US$ gold, due to the strengthening of the A$ against the US$. This will be compounded in 2003 if the POG increases. Why? Because the increase in the POG is representative of a weakening of the US$ and increases in money supply, leading effectively to a devaluation of the US currency."



I think you're missing the point here...

An Aussie producer can see gold in any currency they choose...be it Aussie or USD. If they sell gold in AUD, that's reportable in the income statement without any currency translation.

If, however, they sell gold in USD, they have to then convert their USD revenue into AUD...which will result in them reporting the same AUD revenue figure as they would if they sold the gold in AUD to start with.

...ie there is no difference.


The only protection miners can have against a rising AUD (which will result in the price of AUD gold rising at a lesser degree than that of USD gold) is to hedge their AUD currency exposure. By doing this, they'll have full close to full exposure to the USD gold price.