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Send  Print  Share  RSS  Twitter  27 Aug 2009

Global gold de-hedging remains limited in Q209

 
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Johannesburg, Aug 27 (I-Net Bridge) – Global gold de-hedging remained limited in the second quarter of 2009 with just 0.98 million ounces removed from the global book, said Société Générale Global Gold Hedge Book Analysis.
Released on Thursday, the second quarter report showed that this left the global producer hedge book at end of June at 14.73 million ounces in delta-adjusted terms.
The marked-to-market liability of the producer book contracted marginally to negative US$5.3 billion at end-Q2.
Representing a continued limited level of cuts to the global producer book when compared with the prior year`s trend of elevated de-hedging, the majority of the reduction came from changes to the forward sales component of the book, which fell by 10%.
This was largely as AngloGold Ashanti increased its long 2009 forward position, mathematically treated as a de-hedge, and many producers continued to deliver into positions as they fell due.
Only a handful of companies made above schedule reductions to positions, notably Lihir Gold and North Queensland Metals.
"In contrast, the delta-adjusted options portion of the book expanded in the second quarter, as the higher end-period gold price served to increase the delta of the majority component, the sold call position," the report noted.
Some limited hedging was observed, from SilverCrest Mines, Coeur d`Alene Mines and Zijin Mining but more important is the heightened level of activity that has already been outlined for the third quarter.
AngloGold Ashanti announced another hedge book reduction during July, of 1.4 million ounces of `committed` ounces.
Partly offsetting this, both Great Basin Gold and Nevsun Resources are expected to establish options positions as part of project financing procedures.
"We expect de-hedging in the second half of the year to be of comparable volumes to the first six months," said the research but de-hedging for the remainder of 2009 is still expected to be limited compared to 2008.
End
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