An important catch by the Financial Times:
Gold miners have started to protect themselves against more falls in the price of the precious metal, in a tentative return to the long-shunned practice of hedging.
Hedging by selling future production at fixed prices fell out of favour in the industry as gold rallied over the past decade, and several large gold miners such as AngloGold Ashanti and Barrick spent billions of dollars to unwind their hedges.Although major gold miners have yet to return to the practice, several senior precious metals bankers said that small and medium-sized gold companies had rushed to hedge in recent months. The move comes as gold prices tumbled nearly 30 per cent since the start of the year to a low of $1,180 a troy ounce in June.“We’re seeing more genuine hedging in gold than we have for some time,” said Martyn Whitehead, Barclays’ head of metals and mining sales. Société Générale, one of the main financiers of the mining industry, said in a recent sales note to clients that miners were “queueing [up] to bullion banks to discuss short-term hedging arrangements”....MUCH MORE
