G-Resources not using derivatives to hedge gold price: CEO Peter Albert

G-Resources Group, the Hong Kong-listed company that owns a gold mine in Indonesia, is confident the price of gold will continue to increase despite recent falls, and it has not entered into derivative contracts to hedge price risks on its inventory, its chief executive said.

"Our view is that gold will continue to be under pressure to move upwards, and as such we remain completely unhedged on our gold and silver [inventory]," chief executive Peter Albert told the South China Morning Post on the sidelines of last month's Mines and Money conference in Hong Kong. "We remain gold bulls."

That confidence was despite the fact that gold has fallen 13.7 per cent since early October, when it was fetching about US$1,790 an ounce.

Gold hit an all-time high of US$1,888 in September 2011.

The price traded fell to as low as US$1,550 an ounce yesterday, close to a 10-month low, driven by investors' withdrawal of money from gold-linked exchange-traded funds.

"Now that the price of gold has fallen below key technical support levels, we may well see further selling-off by investors," said a research report by Germany-based Commerzbank this week. Its analysts noted that Japan's announcement of a policy to boost money supply and stoke inflation, a move that was more aggressive than expected, had failed to ignite a rebound in the gold price. Such a policy would normally push the price higher, as gold is often held as a hedge against inflation.

Albert said that fundamental factors supporting the gold price had not changed. They included a lack of major discoveries of mines with quality resources, sustained demand from Asian and Middle Eastern nations for gold jewellery, central bank gold purchases, and bond-buying programmes by some developed nations to boost money supply and lower interest rates.