In this thesis, the relationship between gold price movements and Australian gold mining companies' return for the four year period, 1986 to 1989, were examined. Gold mining company's return was found to be positively related to gold price movements. When gold price rose, return improved; and when gold price fell, return suffered. However, the relationship did not prevail itself for every company. The use of risk management strategies enabled the company to control its risk exposure and hence controlled the effect that gold price movements had on the company's performance.