I believe gold 'hedge book' (forward sales of gold to be produced w/i up to 36 months) shall more than likely return if not already well underway, for given the rising volatility of gold (along w/ every other asset class) and squeezed funding in the mining arena guarantee that CFOs of gold mines must and shall hedge to some degree, and over time accumulated, to great degree.
Otoh, given the paper gold gaming and the w/d of physical collateral to shanghai via Hong Kong, and to Mumbai by way of Dubai, it isn't clear that sale of 24-36 months of forward gold would much crimp the coming tsunami of gold demand / longer term rising gold price, because ...
- 'demand' for physical is and shall continue to rise
- trust for paper / hedge gold may turn tepid then weak, and prove not be as the last time forward hedging was popular
- in an environment where a national govt confiscate a gold mine that featured hedge book, and reneges on the hedge, then much hedges shall blow up causing the renegee to seek alternative gold in a hurry, and unbecoming to the max
Bottom line, yes, hedge book shall make appearance, but
The script may not play as expected per history
Or so I suspect |
