Gold miners cut hedging positions by 15 percent to 22.69 million ounces in the first quarter of 2008 from the previous three months, with the full year decline seen in a range of 7 to 10 million ounces, a report said.

The quarterly report by Societe Generale and metals consultancy GFMS Ltd. said there was no indication at present of a change in the declining trend and dehedging was likely to remain strong in the June quarter.

Hedging allows producers to lock in prices for future output, but it can backfire if metals prices rise above the hedged price. High gold prices in past years have prompted producers to lower their hedging positions.

The report said the impact of AngloGold Ashanti's repurchases and deliveries and the conversion of Barrick's project contracts from fixed to floating prices had already resulted in a significant reduction in hedging positions during the first quarter.

Coupled with confirmed activity, the delivery profile now suggests scheduled dehedging to reach just under 7 million ounces for 2008. This figure does not include unscheduled buybacks, deferrals, intentions to dehedge or fresh hedging.

But the figure could reach to around 10 million ounces by the end of the current year, if potential and unconfirmed dehedging took place, the report added.

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