South African shares lurched one percent lower at the start of Wednesday’s trade, with mercurial gold stocks leading the losers.
In what has become a regular pattern, gold shares cancelled the previous day’s gains. On Tuesday they had hurdled six percent ahead, wiping out Monday’s losses.
”It’s very quiet, the ticker is hardly moving,” said one dealer. ”Technically gold can come off to $310, where it will be a good buying opportunity, so I wouldn’t be writing off gold stocks now.”
At 0753 GMT spot gold was trading at $313 an ounce — close to levels seen late on Tuesday in Johannesburg.
The all-share index gave up 111 points to 10,480 points by 0753 GMT, hurt by continued weakness in big foreign markets, but dealers said trade was likely to remain cautious ahead of the U.S. holiday on Thursday.
Driven by a retreat in gold counters in New York, the bourse’s top traded stock Gold Fields sank 4,3% to R122. The country’s number three producer Harmony Gold fell 4,2% to R140,80.
AngloGold shrank by 3,9% to R525.
But Johannesburg gold shares are still trading about 50% up on their January levels.
World stocks malaise led the bourse’s biggest stock Anglo American off 1,4% to R169. Richemont lost 2,2% to R22,10.
”With tomorrow being a (US) holiday, we may see some short covering towards the end of the day, but on balance I expect slightly weaker markets,” said one trader.
He said local investors would also keep an eye on US economic data later in the session for direction. ”We are not going to see too much action before the US numbers, including factory orders.” – Reuters