From the Telegraph:
The curse of hedging that blighted gold in the 1990s is making a comeback, and threatens to loom over the market like Banquo's ghost.
London-listed gold producer Petropavlovsk has said it will pre-sell 55pc of its future output planned for the second quarter of 2014, at an average price of $1,408 an ounce. This is the first time that a big producer has hedged more than half its future sales.
“We have a huge investment programme and thought a little price protection in the short-term will let us sleep better at night,” said chairman Peter Hambro.
Tyler Broda from Nomura said this may signal the return of “structural hedging” across the industry, with other companies scrambling to lock in forward contracts. “This could increase the pressure on the spot gold price over the coming years,” he said. The risk is a vicious circle as hedging leads to lower prices, leading to more hedging.
The process pushed gold down to $252 an ounce in 2009, though there were many other forces at work, including sales by the Bank of England and other Western central banks.Here's the intro to a post on his kid last month:
“It was hedging that killed gold prices the 1990s,” said Ross Norman from Sharps Pixley. “Every time there was rally, the producers seized on the chance to sell forward. It was most unhelpful.”...MORE
"BlackRock’s Hambro: We Bought Gold"
According to CityWire's Wealth Manager Evy Hambro is a so-so manager, losing less than average in gold stocks and more than average in other natural resource issues.Or not.
On the other hand his dad is the Peter Hambro and his former boss at BlackRock is Graham Birch who quit BLK to run his dairy farm before getting bored and joining père at Petropavlovsk plc, i.e. Evy can probably get some decent thinking on the gold biz....MORE
At least not if papa is trying to offload some product.
