Dehedging And Its Significance

Geena Paul of Commodity Online says that gold de-hedging has become quite the trend; gold producers are more willing to shoulder the risk of fluctuating gold prices now. Many of them who hedged more than, say, 10% of their annual production wound up hurting in consequence. That hurt has been the prime mover behind the dehedging trend. She opines that a moderate amount of hedging will come into play in the future, but not now.


Diehard contrarians are willing to take the opposite side of anyone, especially if someone has made a recent goof. Barrick closing its hedge book at the peak of the market on December 2nd qualifies as making such a goof.

I refrain from taking that step, but some might. A caveat: despite Barrick's embarrassment, gold-producer executives know the gold market fairly thoroughly.