Gold has continued its descent over the last week and is currently down by 1.4% on the 28 May, at $1,245 per ounce. The growing strength of the US dollar is thought to be one reason for subdued gold demand — for buyers outside the US, a stronger dollar makes gold more expensive.
The main routes by which traders and investors gain exposure to gold are exchange-traded gold funds such as the $33bn SPDR Gold Trust (NYSE: GLD.US) ETF, which has fallen by 1.3% over the last week to $120.01, reducing its gains so far this year to just 1.7%. Meanwhile, a London-listed alternative, Gold Bullion Securities (LSE: GBS), has fallen by 0.7% to $119.46 so far this week, eliminating its 2014 gains.
Gold mining news
In the mining world, several small cap gold stocks have drawn heavy trading and investor attention this week.
Vatukoula Gold Mines (LSE: VGM) shocked investors with news on May 30 that it intends to delist from AIM and go private. The move is certain to go through, thanks to backing by majority shareholders commanding 74% of votes, but there was some consolation for the firm’s remaining private shareholders as major shareholder Zhongrun International Mining undertook to acquire shares from any shareholder wishing to sell following the cancellation for 3.72p per share.
However, heavy selling on Wednesday ahead of the de-listing pushed Vatukoula shares down by 20% to less than just 1.8p, suggesting shareholders still have concerns about the liquidity of their shares post cancellation.
Elsewhere, micro-cap Central Rand Gold (LSE: CRND) lost 9% to 9.8p on Wednesday, following the publication of its re-stated results on Friday, and Norton Gold Field’s attempt to gain control of Bullabulling Gold (LSE: BGL) continues, with news on Wednesday that Norton now has control of 15.9% of Bullabulling’s shares, suggesting that a number of the gold miner’s shareholders are happy to sell out at Norton’s offer price of AUD$0.07 (approx. 3.9p) per share, in-line with Bullabulling’s current share price of 3.8p.