Last year, the amount of gold hedged plunged by 147 tons, or 4.7 million ounces, after a modest 15-ton decline in 2000 and a 506-ton increase in 1999, according to Gold Fields Mineral Services.
Moreover, shareholders, who wanted a purer play on gold, have become shirty about gold companies hedging production.
This feature of the securities effectively bundles a gold hedge with financing.
The Toronto-based Barrick will also consider reducing some of its outstanding gold hedges, its chairman, Peter Munk, said in an interview at a Euromoney-World Gold Councin conference in London.
Retain (and add to) your gold hedges.
Proceeds will be used to pay off the company's gold hedges.
Barrick already reduced its own gold hedge book by one million ounces last year.
The gold hedge contracts will be closed over the next 12 months.
Barrick's de-hedging action is the latest move in the modern day gold rush by gold producers to reduce or eliminate gold hedges.
In the past year, several companies have significantly reduced their gold hedge book including Newmont Mining, AngloGold Ashanti, Lihir Gold, Sino Gold, Newcrest Mining and others.
Maintain the gold hedges I have recommended before (most recently in my Aug. 11 column) and keep a full stockpile of U.S. Treasury inflation-protected securities.
