JOHANNESBURG (miningweekly.com) – There is little evidence to suggest that gold producers are returning to large-scale hedging, with limited reports of new hedge positions since the end of the third quarter of 2013 – a year in which producers focused on protecting margins through cost-containment initiatives, a global hedge book report for the third quarter of last year revealed on Tuesday.

The analysis asserted that net dehedging continued during the third quarter of 2013, with a 188 000 oz decrease in the outstanding volume of gold delta-hedged against producers’ hedge contracts.

At the end of September, the outstanding global hedge book stood at 2.94-million ounces, the lowest volume since the quarterly report, compiled by Societe Generale and Thomson Reuters GFMS, began in 2002.

Meanwhile, the market-to-market value of the global producer hedge book stood at $174-million at the end of the third quarter, a $248-million reduction on the preceding three months.

“We, therefore, expect net dehedging to have been sustained throughout the duration of 2013,” it stated.

Dehedging was largely attributable to scheduled deliveries into maturing contracts, in contrast with the opportunistic early terminations of existing ‘in-the-money’ contracts seen during the second quarter.

“This may be a consequence of the modest quarter-on-quarter improvement in the third-quarter gold price,” stated the report.

Twenty-five new companies saw reductions in their delta-adjusted positions during the period, with the majority of these decreases attributable to scheduled deliveries into maturing contracts.

Most dehedging was owing to reductions in delta-adjusted options positions, with the outstanding forwards increasing slightly on the second quarter.

New hedging was modest in scale, with the largest delta-adjusted gains seen for Australia-based Evolution Mining, Regis Resources and Canada-based Dundee Precious Metals, which collectively increased their hedge books by 11 t.