By Dilip Kumar Jha/Mumbai
Quarterly increase indicates that miners wary of price increase, trend reverses in September quarter so far.
Global gold producers raised their hedge book by 8 per cent in the April-June quarter, the highest in six years, to protect themselves from price volatility and automatically thereby margins.
Data compiled by the global precious metals consultancy Thomson Reuters showed global producer hedge book amounted to 9.5 million oz (295 tonnes) during the second quarter of calendar year 2016 to witness fourth consecutive quarterly increase to its highest level since Q2, 2010. The change quarter-on-quarter amounted to an increase of 0.67 million oz (21 tonnes) on a delta-adjusted basis, led by 20 gold producers who entered into new forward sales.
The increase in the quarterly hedge book over the January-March quarter indicates, miners were expecting a price fall in short term. Over the course of April, gold continued to trade over a narrow range as prices approached the apex of a symmetrical triangle. News about the possibility of two interest rate hikes by the US Fed in 2016 fuelled interest across risky assets, driving gold and other safe-haven assets lower. After settling at a distance from $1,400 an oz, gold slipped to $1,251 an oz during the quarter prompting thereby, miners to strengthen heir hedge book. Gold is today trading at $1,326 an oz in the benchmark London spot market.