The price of gold ranged between $1,310 and $1,350 last week, and gold for immediate delivery ended the week modestly higher, up 1.5% at $1,333 per ounce. Gold has weakened in early trading this morning, and was down 0.6% at $1,324 per ounce shortly after UK markets opened.
Of course, the only practical way for most private investors to invest in gold is through exchange-traded funds. The largest gold ETF, the $39bn SPDR Gold Trust (NYSEMKT: GLD.US), ended last week 3.0% higher at $128.78, while London-listed Gold Bullion Securities (LSE: GBS) climbed 2.3% to end the week at $127.07. So far this year, shareholders of Gold Bullion Securities have seen the value of their holdings fall by 17%, while the value of SPDR Gold Trust shares has fallen by 21%.
Gold’s big movers
Last week saw some sizeable gains for gold miners, as investors consolidated their positions after recent gains in the price of gold.
Hochschild Mining (LSE: HOC) climbed 15.5% to 170p last week. The South American-focused silver and gold miner recently reported a small fall in total production for the first half of this year, but said it was on-track to achieve its 2013 target attributable production of 20 million silver equivalent (gold and silver) ounces and was also starting an aggressive cost-cutting programme, which would include 30% cuts to the Chairman and non-executive directors’ salaries and a 10% cut to the CEO’s salary.
Archipelago Resources (LSE: AR) rose 5.5% to 41p last week after reporting a strong set of interim results. The firm, whose Toka Tindung gold mine is in Indonesia, reported that its gold production had risen to 72,636 gold equivalent ounces in the first half of this year, a 20% increase on the same period last year. Archipelago also reported an 18% drop in cash costs per gold ounce, which fell to $618. The firm reported an operating profit of $36.8m for the first half of this year and confirmed it would pay a 0.5p per share interim dividend in accordance with its new policy.
Randgold Resources (LSE: RRS) gained 3% to 4,679p last week. The FTSE 100-listed African gold miner confirmed on Tuesday that it was on-schedule to begin production at its giant Kibali gold mine in the Democratic Republic of Congo, and that the first gold pour was expected in October. Kibali is expected to produce 600,000 ounces of gold at full capacity, a 75% increase on Randgold’s 2012 production.
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> Roland does not own shares in any of the companies mentioned in this article.