Peter Hambro Talks Hedging, Says Gold Remains Underpriced | Kitco News & CME Group

Aside from lower metals prices, hedging was perceived as one of the culprits behind major losses for mining companies in past year , but one major Russian producer says hedging is not all that bad. ‘We were one of the first companies to start hedging when the gold price fell and it’s been very good for us,’ Peter Hambro, CEO of Petropavlovsk plc, told Kitco News at the London Bullion Market Association (LBMA) Conference in Vienna. ‘I think that the real problem was that when hedging became fashionable, the mining companies thoughts it was a magic bullet,’ he added. Looking at gold specifically, Hambro remains optimistic on the metal’s price, noting that geopolitical instability remains one of the biggest risks that could prompt prices higher. ‘We’re seeing people wanting some sort of safe haven and I think gold is still a very good one.’ Hambro also commented on paper gold versus physical gold, and remains an advocate for physical bullion. ‘Paper market looks very odd; it doesn’t reflect, in my view, the demand we’re seeing for physical gold, particularly from India and China,’ he said. ‘The futures market is saying gold’s overpriced, and I don’t understand that. I think gold is very underpriced.’ Kitco News, October 21, 2015.

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