Gold miners cut hedge positions by 18 pct in Q2 - report

Where in the World is PK hiding? I heard that she was in New York last week meeting with investment banks. She went there last year around this time and look what it accomplished. Nothing! Those NY managers who weren't laid off, fired, or arrested for their part in the subprime mess are probably on extended vacations.



Gold miners cut hedge positions by 18 pct in Q2 - report
Mon Aug 11, 2008 5:16am EDT


LONDON, Aug 11 (Reuters) - Gold miners cut their hedging positions by nearly 18 percent in the second quarter of 2008 from the quarter before, and are on track to trim their hedges by a total 10 million ounces in the full year, a report said.

The quarterly report by Societe Generale and metals consultancy GFMS Ltd said miners reduced their outstanding hedges by 4.06 million ounces in the quarter, to 18.81 million ounces.

Hedging allows producers to lock in prices for future output, but it can backfire if spot prices rise above the hedged price. A recent rise in spot gold prices has prompted many miners to cut their hedged positions.

The most prominent reduction came from Anglogold Ashanti (ANGJ.J: Quote, Profile, Research, Stock Buzz), which cut its hedges by 2.71 million ounces, the report said. Fresh hedging remained limited, it added.

"The intentions of producers outlined after the first quarter have materialised into meaningful volumes of activity in the second quarter," said the report.

"However, with these significant actions out of the way, the scope for further significant cuts to the book in the second half is somewhat limited."

"Current evidence suggests the de-hedging levels in the second half of 2008 will slow considerably," it added. "Our outlook for the year remains essentially the same, at around 10 million ounces of de-hedging in total."

(Reporting by Jan Harvey; Editing by Michael Roddy)