Gold de-hedging could reach 10m oz in 2008

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Gold de-hedging could reach 10m oz in 2008
Allan Seccombe
Posted: Thu, 29 May 2008

[miningmx.com] -- GLOBAL gold de-hedging could reach about 10 million ounces in 2008 after a strong start to the year, with a larger-than-expected 4.1 million ounces cut out of hedge books in the first quarter of the year, GFMS said in the Soci�t� G�n�rale Gold Hedge Book Analysis.

AngloGold Ashanti, Barrick Gold and Buenaventura led the charge in reducing their hedge positions in the first quarter, more than offsetting the very low levels of new hedge positions put in place, the report said.

The reason for the rapid de-hedging by gold producers is to realise fuller advantage from high gold prices. The price hit a record $1,011/oz on 17 March and the average for the first quarter was a record $924.

Based on companies� scheduled contractual deliveries, GFMS said the expectation for de-hedging in 2008 was a minimum 200 tonnes or nearly seven million ounces.

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Taking potential and unconfirmed activities into account � most notably AngloGold - this figure balloons to 300 tonnes or 10 million ounces, it said.

The global producer hedge book stood at 22.7 million oz or 706 tonnes at the end of the first quarter of 2008.

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