Traders continued to debate the likelihood of further US monetary stimulus last week, and weaker than expected jobs figures on Thursday, combined with dovish testimony from incoming Federal Reserve Chair Janet Yellen, helped tip the consensus in favour of more quantitative easing. In turn, this helped to lift gold, which recovered from a mid-week low of $1,261 per ounce to end last week up by 0.4%, at $1,290 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 up by 0.4% at $124.32, while London-listed Gold Bullion Securities (LSE: GBS) ended the week up 0.4% at $123.93. So far this year, shareholders of Gold Bullion Securities have seen the value of their holdings fall by 23.5%, while the value of SPDR Gold Trust shares has fallen by 23.8%.
Gold’s unexciting performance contributed to a fairly flat performance from the gold mining sector, but several popular firms did update the markets with company-specific news:
Shanta Gold (LSE: SHG) ended last week up by 2.5% at 13.6p, possibly helped by news that its Chairman, Anthony Durrant, and CEO, Michael Houston, had each purchased 200,000 shares, worth around £27,000 each, at the end of the previous week. These directors’ dealings mean that Durrant holds shares worth 0.18% of the company, while Houston has a 0.26% stake in Shanta Gold.
African Barrick Gold (LSE: ABG) stock has risen by 25% over the last month, but last week saw the firm’s share price slip back by 5% to 194.6p. On Friday, African Barrick announced that it will sell its closed Tulawaka Gold Mine in Tanzania to STAMICO, the Tanzanian state mining corporation, in return for a payment of $4.5m, plus up to $500,000 in future royalties. STAMICO will receive the balance of African Barrick’s $17m rehabilitation fund for the mine in exchange for assuming all past and future liabilities.
Private investor favourite Petropavlovsk (LSE: POG) underperformed the price of gold last week, ending the week down by 8.8%. Part of the fall was due to the news that a planned $105m investment in iron ore producer IRC Ltd, in which Petropavlovsk owns a 51.2% stake, has been delayed. The investment was originally due to be completed by 18 November.