Feisty South African gold stocks added muscle to the bourse at midday on Wednesday, as the price of bullion remained determinedly higher on dollar weakness and global political tensions, dealers said.
Gold shares bound to successive highs as the price of the precious metal fired to its strongest fix in over 2-1/2 years on tensions between nuclear powers, India and Pakistan, and mounting fears of renewed threats against New York landmarks.
The city’s Brooklyn Bridge was closed before dawn on Wednesday after a suspicious package was found there, police said.
The domestic gold index leapt 4,5% spurred by gains in market heavyweights Gold Fields and AngloGold, as well as newcomer African Rainbow Minerals Gold (ARMgold).
Gold Fields lurched to a fresh high of R169,40, bringing its gains so far this year to 190%. The share was 5,3% or 830 cents higher at R167,40 rand by 1009 GMT.
ARMgold put on three percent or 155 cents to R56,75, off a high of 57,51. The share has risen 30% since it listed on the Johannesburg bourse on May 16.
The benchmark all-share index was 0,61% or 70,67 points higher at 11,611.58, and the value of trades was R2,8-billion.
Dealers said global tensions would continue underpinning the gold price, which fixed at $318,25 an ounce in London on Wednesday morning.
”But we expect the market to get quieter as we go further into the week, with attack fears in the United States,” said one dealer.
Financial stocks suffered on the back of worse-than-expected producer inflation data. FirstRand shaved 2,3% or 19 cents to 816 cents, underperforming the financial index, which was down a percent.
”The PPI figures were worse than expected, and we’re seeing a bit of selling in the financials,” said one dealer.
South Africa’s all-commodities producer price index (PPI) rose by 14,8% in the year to April, compared to 14,1% in March. A Reuters consensus poll of economists had forecast PPI would rise 14,3% year-on-year.
The figures added to a slew of data suggesting the central bank will raise interest rates for a third time this year when its Monetary Policy Committee next meets in June. – Reuters