Possible Gold Hedges At Record Prices
Daily gold prices have reached their 2011 record, while annual prices are on track to exceed the 2012 record annual price.
There is a tremendous amount of bullishness among gold mining executives and investors right now, just as there was in 2011 and 2012.
Below are two indicative hedges CPM priced last Friday.
- One assured a producer of a $1,600 minimum price, with the producer giving up $10 at any level above that.
- The other guaranteed a $1,500 minimum price, the market price between $1,500 and $2,100, and a price $35 less than the market price should prices rise to unprecedented levels above $2,100.
- Neither had any upfront premium.
- The marked-to-market credit risks were $10 and $35 per ounce, respectively, under any market circumstances.
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