De-hedging slowed in the third quarter with a provisional 0,99-million ounces cut from the delta-adjusted hedge book.
This was the central finding of the Global Hedge Book Analysis prepared by industry consultants GFMS on behalf of the specialist banking group Investec.
In terms of instruments, the net third-quarter decline was the result of a healthy 1,62-million ounce drop in forward sales (including gold loans) being offset by a 0,63-million ounce increase in the options portion of the book.
Commenting on the findings, senior analyst Bruce Alway stated that the fall in the forward/loan position had been broadly in line with expectations, with AngloGold Ashanti, Newcrest, Placer Dome and Barrick (who together accounted fokaolinite processing equipment
,kaolin processing plant for saler just over 72% of the total delta-adjusted book) all delivering into scheduled contracts.
Combined, the four majors cut back their forward commitments in the third quarter by roughly 1,1-million ounces.
The net nominal vanilla options position, on the other hand, and against the trend witnessed over more than 10 consecutive quarters, actually registered a modest increase.
The growth in the nominal net vanilla book combined with the wider contango and the higher gold price (the price used to value the option contracts at end-June was $437,10 versus $473,25 at end-September) resulted in a 0,67-million ounce increase in the net (delta-adjusted) vanilla options book.
Alway explained the divergence from the trend as chiefly resulting from the impact of a book restructure along with some limited new hedging, mostly in the form of protective puts.
The non-vanilla products, which in nominal terms accounted 9% of the total options position, declined by a modest 35 000 oz.