Gold bounced higher on June 10 after the World Bank cut its global growth forecasts from 3.2% to 2.8%. The sharp rise means that the price of gold has risen by around 0.6% to $1,262 per ounce over the last week, but further strong gains may be unlikely, as the underlying trend in US economic data remains broadly positive; the number of new job openings in the US rose by 7% in April.
The main routes by which investors gain exposure to gold are exchange-traded gold funds such as the $33bn SPDR Gold Trust (NYSE: GLD.US) ETF, which has climbed 0.7% to $121.41 over the last week, leaving it up by 2.9% so far this year. Meanwhile, a London-listed alternative, Gold Bullion Securities (LSE: GBS), has climbed 0.5% to $121.01 over the last week, leaving it up by just 0.7% so far in 2014.
Gold equity news
In the equity markets, a number of small-cap gold miners have reported news that’s triggered strong gains this morning.
Liberian gold explorer Hummingbird Resources (LSE: HUM) is up more than 8% to 57p, at the time of writing, after announcing a $20m deal to acquire all of US miner Gold Fields‘ assets in Mali, which will give it ownership of the Yanfolila Project, which has a mineral inventory of 1.8 million ounces of gold at a grade of 2.8g/t.
Hummingbird plans to deliver first gold by the end of 2015, at an all-in sustaining cost of around $700/ounce, well below the current price of gold.
Elsewhere, Condor Gold (LSE: CNR) was up 6.5% to 88p in early trade today, after reporting trenching results from its La India project in Nicaragua. The firm said that the original 1,400m plan has been extended to 3,500m, following positive results from the first 2,100m. These have confirmed Newmont Mining’s 2001 findings, and uncovered new near-surface gold mineralisation in the same area, including a 4m wide section of quartz in a nearby artisan pit wall with a grading of 16.4g/t gold, within 45m of the original Newmont trench.
Finally, takeover target Bullabulling Gold (LSE: BGL) climbed nearly 4% in early trade, after reporting that metallurgical testing had indicated the potential to reduce the amount of cyanide and lime required for gold production by up to 87% (lime) and 28% (cyanide). The firm says that these findings have the “potential to significantly reduce gold production costs” from the project.