New rules affect gold hedging
Metal Bulletin, 20 Mar 2000, p 7
The London bullion market is preparing for the introduction of financial accountancy standard 133 on 15 June 2000, which industry players believe will hava a major impact on gold trading and could negatively affect gold producers. While FAS133 will affect all commodities, it will have major implications for gold hedgers in particular, because it will make hedging more time consuming, more transparent, and potentially less beneficial for producers. AngloGold says that FAS133 will remove much of the flexibility from the way hedging is managed, and a senior metals economist at Price Waterhouse Coopers agrees that the new standard will affect the commodities industry hardest, and especially the gold sector, because of the amount of hedging involved. FAS133 is initially applicable only to companies listed in the USA, but it will eventually become standard accountancy practice worldwide. |
