The Hindu Business Line : Gold de-hedging slows down

GOLD de-hedging slowed down further in the last quarter of 2005. The pace of quarterly de-hedging fell to its lowest level for more than two years with a modest 0.49 million ounce (Moz) cut in the delta-adjusted hedge book in the three months to December 2005, according to the latest Global Hedge Book Analysis, a report prepared by industry consultants GFMS.

Combined with 3.96 M oz (123.0 tonnes) reduction in the nine months to September 2005, the full-year reduction amounted to a provisional 4.44 Moz (138.2 tonnes).

The slowdown in gold de-hedging does not necessarily suggest that there has been a change in producer sentiment towards hedging, a senior GFMS analyst said, adding that major players seemed intent on reducing their hedge cover rather than commit to fresh hedging.

De-hedging in 2006 is expected to recover somewhat from last year's near-record low, with initial estimates at 7.66 Moz (238 tonnes), the report said.

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