Gold stocks sparkle
By Debra McGarry, CBS MarketWatch
Last Update: 5:11 PM ET Aug 9, 1999
Movers & Shakers • Stock Discussion • Sector Indexes • Market Snapshot
NEW YORK (CBS.MW) -- Precious-metals stocks shone through Monday, pushing the silver and gold index up almost 6 percent amid rising gold lease rates, which climbed above the 4 percent level.
The Philadelphia Gold and Silver index ($XAU: news, msgs) advanced 5.7 percent, led by Newmont Mining (NEM: news, msgs), which was up 1 5/8 to close at 20 3/4; Battle Mountain Gold (BMG: news, msgs), which gained 6.9 percent to 1 15/16; and Placer Dome (PDG: news, msgs), up 11/16, or 7 percent, to 10 13/16.
Central banks lease out gold and set a lease rate, the rate banks charge intermediaries.Rate increases are bullish for gold prices and subsequently pushes up gold stocks, as was the case for Newmont Mining and other components in the index Monday.
The six-month gold lease rate was at 4.3 percent.
December gold futures (GC=Z9: news, msgs) rose 60 cents to $259.9 on the New York Commodities Exchange. See Futures Movers.
Dave Meger, metals analyst with Alaron, told CBS.MarketWatch.com that "investors are nervous of a move up through the $258 level.
"Dollar weakness has pushed bargain hunters in Asia to gold as it's (been) more attractive to investors there," said Meger.
Also, the International Monetary Fund said Monday that it's reconsidering plans to sell bullion to help finance a Western debt-relief plan for poor nations.
Gold Mining Stock Report editor Robert Bishop says the next big test for the flagging metal will come Sept. 21, the date of the next auction by Britain's central bank. See Thom Calandra's StockWatch.
Debra McGarry is a reporter at CBS MarketWatch.
cbs.marketwatch.com.
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