Gold stocks soar on weaker rand

The six-member FTSE/JSE Africa Gold Mining Index jumped 11%, the most since November 24 2008, to 1 511.14 by the close on Thursday.

All the gauge’s component shares rose. Harmony Gold surged 17% to R41.09, also the most in four-and-a-half years, clipping four days of declines.

 

The rand, the worst performer among 16 major currencies tracked by Bloomberg after the Japanese yen this year, today weakened beyond 10 per dollar for the first time since 2009 amid labor unrest that is hampering economic growth.

 

The spot price of gold rose as much as 1.8%, the most in a week, and traded 1.5% higher at $1 413.50 per ounce by 7:09pm in Johannesburg.

 

“The rand, which has underpinned them all week, is setting fresh lows today,” said Ryan Wibberley, a Cape Town-based trader at Investec Asset Management. “The gold miners are underpinned by this persistent rand weakness. The rand-price of gold is up almost 10% in the last two weeks.”

 

Johannesburg-based Harmony Gold, one of the three biggest gold miners, is more geared to the rand-price of gold than competitors with operations in other countries, Wibberley said.

 

Gold Fields rose 10.3%, the most since January 2009, to R62.20. AngloGold Ashanti, the world’s third-largest miner of the metal, advanced 11%, the most since December 2008, to R176.50.

 

Labour unrest

The Gold Mining Index is trading near a 10-year low as mining companies face a rise in electricity tariffs and the country struggles to stave off rolling blackouts, such as those that halted production and shut factories for five days in January 2008.

 

The National Union of Mineworkers asked for wage increases ranging from 10% to as much as 61% for entry-level miners as rivalry between labor organizations led to walkouts at Lonmin’s Marikana operations following the assassination of a union official on May 10.

 

South Africa’s economy grew 0.9% in the first three months of 2013, the slowest pace since the 2009 recession and less than the 1.6% median estimate of 15 economists surveyed by Bloomberg. President Jacob Zuma appointed his deputy, Kgalema Motlanthe, Finance Minister Pravin Gordhan and the cabinet members for labor and mines to mediate between rival unions.

 

“When our mining sector is in difficulties, this affects the wider economy, leading to industrial slowdown,” Zuma told reporters in Pretoria on Thursday.

 

The spot price of platinum rose 1.7% to $1 479.70 per ounce in Johannesburg. The five-member FTSE/JSE Africa Platinum Mining Index closed 5.3% higher, the most since May 2010, at 41.02.

 

Anglo American Platinum, the world’s biggest producer of the metal, rose 7.4%, the most since April 2009, to R320. Lonmin, the third-largest miner of platinum, surged 9.4% to R43.77, its highest since March 19.  

– Bloomberg

We make it make sense

If this story helped you navigate your world, subscribe to the M&G today for just R30 for the first three months

Subscribers get access to all our best journalism, subscriber-only newsletters, events and a weekly cryptic crossword.”

Related stories

WELCOME TO YOUR M&G

Already a subscriber? Sign in here

Advertising

Latest stories

Cost of funerals in South Africa a grave concern

With the cost of living rising, many families can’t afford to bury their loved ones and assistance is needed

Domestic workers the thread linking Mary Sibande and Dorothy Kay...

Dreaming Invisible Connections, a exhibition by postmodernist Mary Sibande and classical painter Dorothy Kay, highlights the domestic worker - in different ways

Will the ANC’s bones come together to bring it new...

Analysis of the the resolutions taken at the party’s policy talks show it will take good leadership and bold action to restore the ANC

Indulge in the Loading Bay’s ethical food

The restaurant, which encourages regenerative farming, is tucked away in Cape Town’s De Waterkant.
Advertising

press releases

Loading latest Press Releases…
×