DESPITE the Gold Price hitting a new record-high monthly average in each of Oct., Nov. and Dec. 2009, "We have not observed a shift in the attitudes of [mining] producers towards hedging," says GFMS in its latest quarterly report for Société Générale.

"These views remain firmly in line with the anti-hedging sentiment of prospective gold equity investors," the report says.

Fearing further price falls after the 20-year bear market of the 1980s and '90s, the world's major Gold Mining companies had sold forward a total of 3,421 tonnes of production – as yet unmined – by mid-2001.

The new GFMS report now pegs the outstanding total of what little hedging remains at 236 tonnes. Down by 93% from the peak, that's slightly below the estimate made last month by Virtual Metals' Q4 report for Fortis Nederlands.

Barrick Gold – the world's No.1 gold producer, and formerly holder of the largest hedge book – closed out the last 90 tonnes of its fixed-price hedging during November '09.

Coupled with news of India buying 200 tonnes of gold from the International Monetary Fund, that month saw Dollar Gold Prices rise 17% to new all-time highs.

"This leaves 46% of the global hedge book concentrated in the portfolio of one player," says GFMS – world No.4 AngloGold Ashanti.

"The company's strategy has been outlined as ongoing reduction of the hedge book [which it] will opportunistically accelerate over time."

GFMS notes that "alternative, creative sources of funding" – such as gold-denominated bonds, and also 'gold stream' payment for the right of first-refusal on new output – now "negate the need for extensive gold hedging in many cases of gold project financing."

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