Gold’s recovery has continued this week, thanks to market turbulence and growing fears that a new global slowdown could be about hit the world’s major economies, delaying the time when central bankers will start thinking about raising interest rates.
The price of gold for immediately delivery was up 1.3% at $1,238 per ounce on Friday morning.
As a result, physical gold ETFs have also made gains, and according to a Bloomberg report, nearly $1bn has been added to the value exchange-traded funds backed by gold over the last month.
The $30bn SPDR Gold Trust (NYSE: GLD.US) ETF has risen by 1.5% to $119.22 since last Friday, taking it back into positive territory for the year with a gain of 2.7% so far in 2014. Over the same period, London-listed Gold Bullion Securities (LSE: GBS) has climbed 3.7% to $119.00, leaving it up by 2.9% on the year to date.
Gold miners
Shares in Condor Gold (LSE: CNR) gained 10% to 79p on Friday morning, making the firm one of the day’s strongest performers in the gold mining sector. The firm recently released an update on its planned pre-feasibility study, which was due by the end of September 2014 is now expected by 31 October, as the scope of the report has been expanded to include two additional, larger-scale mining scenarios for the company’s La India project in Nicaragua.
Other big gainers over the last week include Petropavlovsk (LSE: POG), which has climbed 14% to 23p from a low of 19p over the last five days, despite the grim outlook for shareholders, thanks to Wednesday’s sharp rise in the price of gold. The firm’s third-quarter update is due next week, on 22 October.
At the other end of the table, former 2014 favourite SolGold (LSE: SOLG) has sunk: the firm’s shares were up 65% by the end of February this year, but have since given up those gains and more, falling by 18% this week and by 49% so far in 2014, as investors appear to have lost interest in the firm’s highly prospective Cascabel project in Ecuador.
These numbers make it clear that the gold sector remains seriously out of favour with the market, thanks the poor financial performance of many miners, and to ongoing weakness in the price of gold.Â