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本帖最后由 yaobooyao 于 2009-9-9 18:55 编辑
DJN: =DJ FOCUS: Barrick Move Drove Gold's Rise, Rally Unsustainable
By Devon Maylie
Of DOW JONES NEWSWIRES
LONDON (Dow Jones)--Dehedging by the world's largest gold producer, Barrick Gold Corp. (ABX), has been the driving force behind gold's move above $1,000 a troy ounce this week, a price level analysts say is unsustainable.
Barrick said late Tuesday that it will close its gold hedges at a total cost of $1.9 billion over the next 12-months. So far the company has converted 2.4 million ounces of fixed price contracts to floating contracts since the end of June, which required the miner to buy that amount of gold in the market. The company still has 3 million ounces of fixed price contracts to dehedge, but that will take place over a longer period of time, a Barrick spokesman told Dow Jones Newswires.
Gold hedging among producers, or the practice of selling future gold production in advance on the belief that current prices will be better than those in the future, is declining. Dehedging involves a company buying back such gold in expectation of price rises.
"We have more buying to do," the Barrick spokesman said. Traders and analysts said the dehedging done since the end of the second quarter, before Barrick's announcement, had been a major contributor to the nearly $100 rise in the price of gold over that period. Barrick's announcement indicates producers are accelerating the process of buying back hedges to get full exposure to the metal, in anticipation that prices will rise further. But while dehedging has driven gold prices higher, as the amount of gold hedged shrinks, the support to prices from dehedging will begin to flag.
Barrick had 5.4 million ounces of fixed-priced contracts at the end of June.
On Tuesday the company said it now has only 3.0 million ounces remaining as of Sept. 7. Therefore, it had already dehedged 2.4 million ounces between July 1 and Sept. 7, said VM Group analyst Matthew Turner. That is equivalent to a sixth of global mine production in that period. The news is bearish for the gold price. The price rise had seen analysts scrambling for explanations. But now there is a consensus on the cause, and also that it isn't a cause likely to be repeated with the same intensity, Turner said, alluding to the Barrick dehedging. "We conclude that recent buying from Barrick probably contributed a lot to the move in gold over the past week and that, while there may be more buying to do, we believe their outstanding position is closer to 2 million ounces than the 3 million ounces reported," UBS analyst John Reade said. There have been other factors driving the gold price, which topped $1,000 an ounce Tuesday, and these will continue to buoy the price of the precious metal into 2010, analysts say. Such factors include U.S. dollar weakness and investor concerns about future inflation. "We hold our one and three month forecasts for gold at $950 an ounce and $1,000 an ounce respectively, signaling that we expect a pullback in the short term," Reade said.
RBS forecasts gold to peak next year in the first quarter at $1,100 an ounce and to average $1,000 an ounce through 2010.
"Gold's long-term history as a harbinger of inflation, or gauge of inflation expectations, is clear," said RBS analyst Stephen Briggs. Investors are concerned about inflation and are getting into gold now to protect against possible inflation in the future, Briggs said. While a large portion of Barrick's dehedging is already completed, there is some left to do, while AngloGold Ashanti Ltd. (AU) has previously said it plans to reduce its hedge book to 4.1 million ounces by year-end.
As a result of Barrick's announcement, total dehedging this year may now be more than expected, but the long-term pattern is still for the global hedge book to fall to zero, said RBS' Briggs. As of the end of the second quarter this year, the global hedge book was at 14.7 million ounces. That's down from the peak of 103 million ounces in the third quarter of 2001.
Barrick's hedge book closure "marks the beginning of the end of the global gold miner hedge book: once this transaction is completed, it will leave the industry's remaining hedge book concentrated in the hand of one producer, AngloGold Ashanti," said Reade. Barrick's decision could pressure AngloGold to accelerate its dehedging process, Reade said, and then there won't be much dehedging left to do. Under the terms of the gold hedges, Barrick could purchase gold in the open market or deliver physical gold into these contracts in order to terminate them, the company said. Within the next 12 months, Barrick said that, when a good opportunity arises, it will purchase gold in the open market and/or deliver metal from its own production to minimize the cost of settlement. These ounces will then be delivered against the gold hedges in order to terminate them.
Barrick cited concern by shareholders and a bullish outlook for the metal as reasons for closing the hedge book.
-By Devon Maylie; Dow Jones Newswires; (4420) 7842 9483;
devon.maylie@dowjones.com |
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