After the previous week’s strong gains, the price of gold for immediate delivery fell back to lower levels last week, dropping by 2.7% to end the week at $1,315 per ounce.
Of course, the only practical way for most private investors to invest in gold is through exchange-traded funds. The largest gold ETF, the $38bn SPDR Gold Trust (NYSE: GLD.US), ended last week down by 2.8% at $126.95, while London-listed Gold Bullion Securities (LSE: GBS) ended the week down 2.8% at $126.42. So far this year, shareholders of Gold Bullion Securities have seen the value of their holdings fall by 21.2%, while the value of SPDR Gold Trust shares has fallen by 22.0%.
Last week’s falling gold price was reflected in the share price of most gold miners, but two UK-listed companies managed to make big gains, thanks to positive news flow:
African Barrick Gold (LSE: ABG) climbed 13.9% to 193p last week, after the firm said that its gold production had increased by 11% to 164,719 ounces during the third quarter, while its all-in-sustaining cost of production had fallen by 15% to $1,275 per ounce. African Barrick’s all-in-sustaining cost of production was $1,507 per ounce at the end of the first half of this year, raising fears that it would not be able to operate profitably at current gold prices, so last week’s news was very positive for the firm.
SolGold (LSE: SOLG) gained 12.9% to 13p last week, and the firm’s shares were up by a further 6% at the time of writing this morning, after SolGold reported visual observations of copper and molybdenum mineralisation in its third drill hole in the Cascabel project, in northern Ecuador. SolGold also announced today that is expanding its planned five-hole drilling programme to eleven holes, for which it remains fully funded, in order to explore possible extensions to the copper-gold mineralisation it discovered with its first drill hole.
Archipelago Resources (LSE: AR) inched up 0.4% to 58p last week, as the unconditional cash offer from Indonesian firm PT Rajawali Corpora for the firm’s shares closed. According to Archipelago, acceptances were received for 74% of eligible shares. Shareholders who accepted the offer will receive payment in the next fortnight, according to the company.