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Our Bureau

Mumbai March 25

GOLD de-hedging this year could surpass the levels measured in 2003. Based on the maturity ladder for hedge contracts at the end of 2003, and taking into account fresh hedging on one hand and buy back on the other, the latest annual hedge book review conducted by the London-based GFMS Ltd suggests a base case level of de-hedging in 2004 of between 11 million and 13 million ounces (moz).

Just over 70 per cent of the close to 10 moz de-hedging measured last year was attributable to just four producers — Newmont, Anglogold, Barrick Gold and Placer Dome.

The reports highlighted the fact that overall makeup of the hedge book has been reasonably constant in spite of the substantial declines in outstanding positions.

According to GFMS, buybacks triggered by mergers and acquisitions deals were one of the key drivers behind the high levels of measured de-hedging in 2003.

As regards potential for project hedging, the reports concluded that levels in 2004 were expected to be lower than the 3.5 moz added to the book last year.

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