Gold Miners Cut Forward Sales to Lowest Since 1987, GFMS Says

By Stuart Wallace

Aug. 11 (Bloomberg) -- Gold-mining companies led by AngloGold Ashanti Ltd. reduced their forward sales of the metal by 4.06 million ounces in the second quarter, to the lowest since 1987, research company GFMS Ltd. said.

Gold producers had a total of 18.81 million ounces left in the so-called global hedge book at the end of June, London-based GFMS said in its quarterly Societe Generale Gold Hedge Book Analysis report on its Web site.

For the full year, miners will probably cut about 10 million ounces of hedges, suggesting ``de-hedging levels in the second half of 2008 will slow considerably,'' GFMS said.

Gold averaged $897.40 an ounce in the second quarter, compared with $923.82 in the first quarter. Miners can agree to sell future production at current prices to protect against losses caused by sudden declines, a strategy known as hedging.

To contact the reporter on this story: Stuart Wallace in London at swallace6@bloomberg.net