GOLD (ASX listed) Price Query

[osmosis]

Hi

I always assumed that the ASX listed "GOLD" tracked the gold price fairly accurately.

However, when the gold price was around $850 in early May 08, GOLD could be bought for about $89 per share on the ASX.

Today, with the gold price just above $800, GOLD sold at about $92.

Why the discrepancy?

 

[CanOz]

Hi

I always assumed that the ASX listed "GOLD" tracked the gold price fairly accurately.

However, when the gold price was around $850 in early May 08, GOLD could be bought for about $89 per share on the ASX.

Today, with the gold price just above $800, GOLD sold at about $92.

Why the discrepancy?

Hi Osmo, the answer is explained really well in another thread which i cannot find. Basically it is because the GOLD tracking stock is priced in Australian dollars...which are worth less to the greenback by about .1164 ish since the 16th of July or so.

Hows that?

CanOz

 

[osmosis]

Oh I see. So its unhedged -- which would make sense with the AU$ falling recently. Thanks.

 

[cuttlefish]

Every unit of GOLD represents exactly .098 troy oz of gold. Its meant to act in the same way as a direct gold investment. There's no hedging and there's a .4% per annum management fee.