Gold was range-bound last week, trading between $1,227 and $1,258 per ounce, and eventually ending the week 0.8% higher at $1,250 per ounce. In the US, the Thanksgiving holiday meant that trading was quieter than usual, but broadly positive global economic data, and hints from Bank of England Governor Mark Carney about tightening monetary policy, continued to erode support for gold.
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 0.34% at $120.70, while London-listed Gold Bullion Securities (LSE: GBS) ended the week up 1.6% at $120.53. So far this year, shareholders of Gold Bullion Securities have seen the value of their holdings fall by 26.8%, while the value of SPDR Gold Trust shares has fallen by 26.0%.
Hochschild Mining (LSE: HOC) climbed 10.3% to 142p last week, following a financial update. Hochschild, whose shares are down by 71% so far this year, said that it had reduced the cash cost per ounce at its three main operations by 16% during the third quarter compared to the first half of this year, and that its cost-cutting programme was on-track to deliver $200m of savings. Excluding exceptional costs, Hochschild said it made a pre-tax profit of $10.3m during the first nine months of the year, down from $174m during the same period last year.
Polymetal International (LSE: POLY) gained 2.5% to 533p last week. The Russian gold miner didn’t release any news last week, but the firm announced this morning that it has a new five-year, $400m lending facility with Russian bank Sberbank, which will be used to repay existing loans and finance ongoing operations, and will extend Polymetal’s debt maturity profile to more than three years, improving the miner’s cash flow.
Randgold Resources (LSE: RRS) edged up 1.1% to 4,328p last week, as investors supported the stock despite gold’s ongoing weakness. Randgold’s share price is down by around 25% so far this year, but this is in-line with the fall seen in the gold price and Randgold has outperformed all of its UK peers in the mid-large cap producer sector, thanks to its sustainable profitability and continued production growth. In contrast to Randgold, Polymetal International is down by 54% so far this year, Fresnillo is down by 55%, and African Barrick Gold is down by 62%.