The rise in gold prices during the third quarter of last year did not motivate widespread hedging by mining companies, even though they had the opportunity to do so at higher prices, according to a quarterly hedge book report released Tuesday.
Hedging locks in the value of a company’s gold so the producer can sell it at the price it has set, even if the price falls later on. Typically, if miners suspect prices are about to rise, they will de-hedge their gold positions to allow themselves to take advantage of the potential increase in value.
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