Gold prices rose Friday on reports that Barrick Gold (TSX:ABX)will abandon its practice of selling its production in forward markets a practice known as hedging.

Barrick Gold chairman Peter Munk was quoted at a London conference as saying the company will stop all of its hedging over the next 10 years.

Currently, almost a fifth of Barrick's reserves are hedged. When Barrick reported its third-quarter results last month, it said its hedge book was "larger than we would like it to be in the current environment."

Barrick said all of its production in the most recent quarter was sold at spot prices that averaged $365 US an ounce.

Hedging in the gold market involves buying contracts that will guarantee a certain price for the precious metal at a specific time in the future. It is used to protect a gold producer against downturns in the metal's price.

But because gold has been shooting up for well over a year, there's been a widespread perception that Barrick would not be able to take full advantage of higher bullion prices because part of its production would be hedged at lower than market prices.

Market analysts say that has hurt Barrick's stock price relative to other non-hedged gold producers like Placer Dome or Goldcorp.

Barrick shares rose 20 cents to $28.20 on Friday.

Friday's announcement also helped to boost gold prices. In afternoon trading in New York, gold futures rose $2.30 US to $396 US an ounce.

Barrick is Canada's largest gold producer.