Thomson Reuters GFMS and Société Générale's Q2 2012 Global Hedge Book Analysis shows that for the third consecutive quarter, the gold market saw net de-hedging, with the hedge book falling by 188 koz or 6 tonnes.
This left the outstanding producer hedge book at end-June at 4.89 Moz (152 t), down from 5.08 Moz (158 t) at end-March.
Eleven companies saw an increase to their hedge positions, while 29 companies saw their hedge positions fall on a delta-adjusted basis.
In a similar trend to the first quarter of 2012, many of the hedge book reductions came as part of scheduled deliveries or option expiries as hedge positions matured, rather than concerted moves by hedged producers to remove hedge cover.
The marked-to-market liability of the producer hedge book dropped by just over one third quarter-on-quarter, to negative $0.98 billion.
Over the first half of 2012 producers’ activity accounted for just 253 koz (8 t) of demand in the gold market: the market impact of net producer hedging activity remains limited.
Thomson Reuters GFMS and Société Générale said given that it's now forecasting a lower end-year price than in its Q1 report, net de-hedging for 2012 is now predicted to be 643 koz (20 t), as scheduled deliveries and option expiries are forecast to outweigh project hedging and higher delta-hedging against producers’ end-year option positions.