[miningmx.com] – GOLD producers were unlikely to return to hedging the metal in an attempt to lock-in gains, said Bloomberg News citing a report by Barclays.
“The margin between costs and prices has narrowed significantly,’ Barclays analyst Suki Cooper in New York wrote in the report, said Bloomberg News.
“Hedging has materialized. Despite our expectations for prices to remain under pressure over the next couple of years, we do not expect large-scale hedging to the magnitude seen during the 1990s to return,” he said.
Producers that boosted the global hedge book to more than 3,000 tonnes by 2001 to lock in returns then added to demand by closing out those positions as gold rallied for 12 straight years, said Bloomberg News.
The hedge book was down to 96 tonnes by June, according to Societe Generale SA. John Thornton, co-chairman of Barrick said this week that hedging makes sense and is worth considering.
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