davo77: "Have you never heard of hedging? Where a gold company for example forward sells gold at a higher price than today's because they dont believe the price will go above that. YES PEOPLE DO BUY THAT GOLD AT HIGHER THAN TODAYS PRICES because UNLIKE the gold company selling it they believe gold will increase."
Yes I know what hedging is, and yes I sometimes hedge my positions. And guess what you can hedge by shorting! And no the position of SGX was not fully hedged to production, hence why they decided to cover their short position by buying from the gold market. So now what you're telling me is that If I believe the gold price will increase I should buy them at $600, while the market is trading at $500... geez mate. Pay a $100 premium for a trade on the day! geez I'd go bust in no time. Though I wouldn't mind paying that $100 premium if it gave me the option to buy at $600 5 years down the road.
