Gold Derivatives: Gold Derivatives: - World Gold Council
Gold Derivatives: Gold Derivatives: - World Gold Council
Gold Derivatives: Gold Derivatives: - World Gold Council
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16/04/99: <strong>Gold</strong> Fields announces that it has made no new forward sales of gold<br />
whatsoever in 1999<br />
06/10/98: Zimbabwe government minister says that it may allow gold producers<br />
to hedge more of their output<br />
05/08/98: Homestake Mining announces that it has changed a long standing<br />
policy against hedging and will allow up to 30% of future gold production<br />
to be hedged in forward market<br />
11/06/98: Ross Mining NL announces that it has hedged an additional 253,000<br />
ounces of gold<br />
21/07/97: Gengold announces that it does not plan to hedge any more gold in<br />
the near future<br />
06/08/96: Newcrest Mining announces that it had liquidated the bulk of its<br />
gold-hedging position for a pre-tax profit of A$ 270m<br />
12/02/96: Barrick announces that it remains committed to hedging but has<br />
reduced its position<br />
18/01/96: JCI Ltd. announces that it has entered into a 7.3 million ounce gold<br />
hedging programme<br />
18/08/95: Beatrix Mines announces it has hedged 2.9 million ounces<br />
22/07/93: Anglo American announces that it has achieved its hedging targets<br />
and is no longer heavily involved in the market<br />
11/10/92: American Barrick Resources announces that it has completed a 1-m<br />
ounce, ten-year gold hedging facility<br />
Ten of these announcements were classified as reduced hedging and ten as increased<br />
hedging. Two of the events, of opposite type, occurred on the same day (7<br />
February 2000) and were eliminated from the test. An event window of five preevent<br />
days and two post-event days is used and the cumulative abnormal return<br />
for gold is computed for each of the two event categories. The hedging announcements<br />
generally do not coincide with other announcements, and the results are<br />
therefore not contaminated in this respect.<br />
Given the very short window, the method of computation of abnormal returns is<br />
not critical; we have taken the normal return to be zero. The results are shown<br />
graphically below. The key period to examine is the day of the announcement<br />
itself (day 0) and the days immediately before (day -1) and after (day 1).<br />
70<br />
<strong>Gold</strong> <strong>Derivatives</strong>: The market impact
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