High but not hedged



It may seem foolhardy for gold producers in Australia not to hedge against a potential fall in prices, given that gold topped $722 an ounce in mid-May, a historical high level since January 1980. In Australian dollar terms, it peaked at A$928/ounce on May 11. But the outlook for the metal is so robust that gold producers see little reason to protect themselves against any downside risk.

"Hedging, we believe, is a potential value-destroyer, because if you've got low-cost operations then you don't

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