According to a new report from Societe Generale, gold miners like Barrick Gold aren’t hedging against price fluctuations despite recent pullbacks in price.
Sure you can lock in a price via a forward contract but that practice has apparently all but died in recent years.
BullionVault: Despite the Gold Price hitting a new record-high monthly average in each of Oct., Nov. and Dec. 2009, “We have not observed a shift in the attitudes of [mining] producers towards hedging,” says GFMS in its latest quarterly report for Société Générale.
“These views remain ﬁrmly in line with the anti-hedging sentiment of prospective gold equity investors,” the report says.
Fearing further price falls after the 20-year bear market of the 1980s and ’90s, the world’s major Gold Mining companies had sold forward a total of 3,421 tonnes of production – as yet unmined – by mid-2001.