Πηγή: Business Day
By ALLEN SECCOMBE
Oct 5 2011
Forecast shows that for the first time since 1999 there will be a net increase in the global gold hedge book as more gold is sold into forward contracts
FOR the first time since 1999 there will be a net increase in the global gold hedge book as more gold is sold into forward contracts, according to a forecast by precious metals consultancy.
The June quarter marked the second consecutive quarter of net hedging, bringing to an end 11 years of net dehedging by gold producers opting for greater exposure to the spot gold price.
Producers lock in future gold prices for a number of reasons, including loan agreements with financiers who want guarantees that debts can be repaid.
With the rising gold price over the past decade , most gold company shareholders have demanded exposure to the gold price, which in many cases overtook hedge positions, which meant that producers were selling hedged gold well below the prevailing price.
GFMS forecast that 2011 would be the first year of net hedging since 1999, adding 1-million ounces to the global hedge book, which takes into account what gold producers around the world are doing with forward sales contracts.
In the second quarter of the year, there was net hedging of 190000oz of gold, bringing the global book to 5,07-million ounces.
"It would be wrong to assume, however, that general attitudes to hedging amongst major gold mining companies have changed," GFMS said in a report yesterday.
"In the face of a strongly rising gold price, the pressure is currently still on company management from investors to retain full exposure to rising prices," the report said.
South African gold producers, who are amongst the largest in the world, are firmly against hedging their gold production.
AngloGold Ashanti spent $6bn closing an 11-million ounce hedge book but CEO Mark Cutifani said last October that the company would have lost out on $10bn if the contracts had remained in place.
An argument has been made that investors in gold companies might want them to lock high prices in by setting up forward contracts for fear of a sharp retraction in the gold price from recent record highs.
"In the long run you can’t beat the spot price," Gold Fields CEO Nick Holland said in August when asked whether there was pressure on the company to start locking in the gold price. "There’s a litany of people who’ve lost billions of dollars for gold companies … and guess what, they were ahead of the game for 10 years and then what happens, they lost it all in the last two years," he said.
"If you’re long enough in this business you’ll see the same mistakes being made. When gold gets to a certain level some people will hedge. As far as I’m concerned, it won’t be us," Mr Holland said.
GFMS said gold companies were still reducing their hedge books but "there were a limited number of new hedges entered into during the (June) quarter". Five companies increased the number of contracts in their hedge positions.
Australia’s Alkane Resources agreed a 90000oz forward sale to protect against revenue risk at one of its projects. It agreed to a strike price of A$1600 an oz. The current price for Australian producers is around A$1700/oz.
Yesterday, the gold price fell by 2% to $1620/oz after US Federal Reserve chairman Ben Bernanke said it could take steps to support the US economy, Reuters reported .
Renewed safe-haven buying of bullion evaporated the day after its biggest daily gain in a month. The metal fell early in a broad financial market decline on concern about a the European debt crisis, the news agency said.
Mr Bernanke said Federal Reserve policy makers were "prepared to take further action as appropriate to promote a stronger economic recovery in a context of price stability", Reuters said .
When gold gets to a certain level some people will hedge.
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