TORONTO (miningweekly.com) – Gold miners eliminated 3,18-million ounces of forward sales during the third quarter, metals consultancy GFMS said in a report on Tuesday.
By the end of the quarter, the total global hedge book stood at 11,55-million ounces, with a mark-to-market liability of a negative $4,5-billion, GFMS said in its quarterly ‚Global Hedge Book Analysis‘.
„Given the activity seen in the first nine months of the year, and currently available information regarding thenew stone crushers usa fourth quarter, GFMS estimates that during the fourth quarter, the global hedge book volume will continue to be pushed lower, towards the eight-million ounce level,“ researchers said.
The report was issuedcone crusher components and its function the same day that the biggest producer of the yellow metal, Barrick Gold, said that it had eliminated all of its fixed-price hedges.
Barrick’s announcement in September that it wogold mill equipment in indiauld get rid of its fixed-price forward sales „has considerably changed the outlook for 2009 and beyond“, GFMS said.
„Whereas three months ago, in the August report, we expressed the view that dehedging in the third and fourth quarters could remain at similar levels to the first half of the year (with Barrick and AngloGold Ashanti as potential wildcards), we now expect that dehedging for the full year could reach around 7,88-million ounces.“
AngloGold Ashanti still remains a candidate to undertake additional unannounced or unplanned dehedging before year-end.
Gold producers put hedges, or forward sales, in place to protect their cash flow against falls in the gold price. However, with the metal setting new records, firms with large hedge positions are under pressure to unwind them in order to gain full exposure to the surging price.
„Regarding fresh hedging, we still do not see strong signs of a return to outright hedging activities by producers potentially eager to lock in historically high prices, and would argue still that this would currently be frowned upon by investors,“ GFMS said in its report.
Gold broke through $1 200/oz for the first time on Tuesday.