Recent history reinforces the notion that the December quarter is traditionally a weak one for gold. Over the last 10 years December quarterly returns have averaged -2.8% and so far we are down -2.4% in the December 2020 quarter to date.
The consensus on the gold price had become almost universally positive. We had also noted over the last few weeks that silver had finally begun to outperform gold – one of the last elements that had been missing from the bull market landscape and signalling to us the further maturation of positive gold market sentiment.
In this report, we look at the hedge book positions of key ASX-listed producers to estimate what proportion of production is hedged and to what degree it discounts their gold revenues against an assumed spot price of A$2,700/oz.