Gold mining

Producer hedging

The volume of gold that is supplied to the market each year can also be marginally affected by forward selling of future production – known as producer hedging.

There are times when miners will want to lock in a specific price for their future gold production – for example, to manage project costs or debt servicing. These commitments will affect the amount of gold that enters the market. In previous decades, these hedging agreements had a substantial impact on supply levels but in recent years they have been relatively small and shorter term in nature.