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>Johannesburg gold index surges
By: David McKay and Stewart Bailey
Posted: 2002/01/10 Thu 12:40 | © Miningweb 1997-2002
JOHANNESBURG & PERTH -- South African gold shares had surged by midday today (10 January) as the dollar price of gold leapt $286.80 per ounce. This follows a combination of positive fundamental economic news from the United States and short-covering by investors and traders which is triggered by technical factors. Johannesburg's All Gold Index was 135 points to 1,915 points, a shift of 7.5 percent.
Harmony Gold [JSE:HAR], the South African gold producer which has most of its gold output exposed to the spot price, gained almost 12 percent to R80.60 a share. It was followed by Gold Fields [JSE:GFI] which was 8.2 percent higher at R62.90 a share. Durban Roodepoort Deep [JSE:DUR] gained a R1.00 or almost 7 percent to trade at R17.00, and AngloGold, the company bidding to buy Normandy Mining, gained 5.3 percent to trade at R453.00 a share.
South African analysts said US economists were gradually changing their forecasts for the second quarter of the year. "We initially factored in a negative 2 percent slow down in economic activity for the US in the second quarter but now that is expected to be flat," one analyst said. The US economy is expected to "rapidly accelerate" in the second half of the year. All of this adds up to improved demand for gold jewellery (and diamonds).
The small rally in gold punctured $280 per ounce which represents the 100-day moving average for the metal. This immediately triggers an order for short-covering among technical traders. The prospect of the futures close out tomorrow will also see traders taking positions to square up their accounts. "Bear in mind that this is still a relatively thinly traded market where a slight move in traders' positions can have a disproportionate affect on the gold price," another analyst said.
South African gold producers enjoyed spectacular gains towards the end of last year as the rand, the South African currency, depreciated against the dollar. This converts into increased gross revenue figures for gold miners as sales are dollar-denominated. The rand gold price, for example, advanced to more than R110 000 per kilogram at one point, more than double the income 24 months ago. The rand has since regained some of its losses but the dollar gold price gains are a significant compensating factor. The rand gold price is currently standing at R103 855 per kilogram.
Normandy gains on eve of voting
Australian gold shares shrugged off the cost pressures of the marginally stronger local currency today, with punters instead following the dollar bullion price. The ASX gold index climbed 2.5 percent on the stronger gold price.
Aussie gold stocks across the board also continued to be underpinned by the current flurry of corporate activity in the sector, as Newmont and AngloGold duke it out for control of Normandy Mining [ASX:NDY]. The company, Australia's biggest gold producer, added 2.73 percent to end trade in Sydney on A$1.88 a share on the eve of the scheduled expiry of AngloGold's offer. More than 53 million Normandy shares changed hands.
The biggest mover on the day was Goldfields [ASX:GLD], which added 4.89 percent. Investors are also looking at the stock as an option on corporate activity, with South Africa's Gold Fields [JSE:GFI] and North American major Placer Dome [TOR:PD] rumoured to be in the hunt for the newly merged gold company. Newcrest was the runner up on the day, gaining 3.46 percent before ending on A$4.39 a share.
Further down the pecking order, Hill50 [ASX:HFY], the 300,000 ounce gold producer which is also the subject of a takeover offer by South African number-three Harmony Gold [JSE:HAR], picked up 1.4 percent, closing on A$1.45. A handful of the gold juniors also got in on the action; Aurora Gold, the small scale gold and silver producer climbed 3.45 percent to close on A$0.15 a share.
m1.mny.co.za
HGMCY's coming into some pretty good resistance here between $7.25 and $7.50. If we can clear that there is a lot of blue sky above. That is as long as the spot price doesn't come crashing back down.
Anyone have a site where one could get JSE quotes? |
