On hedging. The banks would have required hedging to lower the risk of their loans. While it can be argued RRL could have done a better job managing their hedge book, taking out the hedges was not their decision. It could also be argued the hedge book as it stands is useful for the next round of bank financing, even if the book is loss making, for moderating bankers' perception of risk attached to the fluctuating PoG.
On PoG. All major countries are indulging in history-making Quantitative Easing programs to support their economies and devalue their currencies. Collectively, they devalue against gold. Substantial rises in the PoG are baked in by central banker statements they will do whatever it takes to support their economies.
Investing in RRL is to buy a manufacturer of gold, rather than bullion in a vault. I know which I prefer.
Ash
RRL Price at posting:
$3.10 Sentiment: Buy Disclosure: Held
A personalised tool to help users track selected stocks. Delivering real-time notifications on price updates, announcements, and performance stats on each to help make informed investment decisions.
(20min delay)