Global gold hedges, or sales of future production, gained for a second straight quarter in the three months through June and are set to climb for the first year since 1999, according to Thomson Reuters GFMS.
The worldwide hedge book rose about 190,000 ounces to 5.07 million ounces in the second quarter, the first time hedging occurred in consecutive quarters since 2001, the London-based researcher said today in an e-mailed report. Hedging will continue in the current half, taking 2011 net additions to about 1 million ounces, it said.
Gold producers sometimes sell future output at fixed prices to secure loans. They can reduce hedges by buying back contracts, adding to demand. Bullion for immediate delivery traded at $1,653.38 an ounce by 5:30 p.m. in London yesterday after reaching a record $1,921.15 on Sept. 6. It’s up 16 percent this year and set for an 11th straight annual gain, the longest winning streak since at least 1920 in London.
“It would be wrong to assume, however, that general attitudes to hedging among the major gold mining companies have changed,” GFMS said in the report. “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.”
Among companies that increased hedge positions, Perth, Western Australia-based Alkane Resources Ltd. (ALK) added about 90,000 ounces of forward sales in the second quarter, the researcher said. Regis Resources Ltd. (RRL), located in Melbourne, added about 40,000 ounces, it said.
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