Polymetal International (LSE: POLY), Shanta Gold (LSE: SHG) and Patagonia Gold (LSE: PGD) are in the spotlight this week.
The price of gold has weakened steadily over the last week and gold on the January contract has fallen 2.2% to $1,689.20 since last Friday.
Of course, the only practical way for most private investors to invest in gold is through exchange-traded funds. Like gold, the $63bn SPDR Gold Trust (NYSE: GLD.US) has dropped this week and was down by 2.1% on the last five trading days at $163.62 shortly after US markets opened today. London-listed Gold Bullion Securities (LSE: GBS) has performed in a similar fashion, and has fallen by 2.4% to $163.05 since last Friday. So far this year, shareholders of Gold Bullion Securities have seen their holdings rise by 7.0%, while SPDR Gold Trust holders have gained 7.7%.
Gold's big movers
Many investors prefer to invest in gold mining stocks, rather than gold itself, as gold miners are able to benefit from operational gearing to outperform the price of gold. Let's take a look at some gold stocks that have outperformed recently.
Patagonia Gold (LSE: PGD) is up almost 8% to 24p today. The company's share price dropped after a share placing that raised £1m on 27 November, but is still up almost 9% on the month. The proceeds from the placing will be used to fund development of its Lomada de Leiva gold project in Argentina, which has just begun gold and silver production.
Shanta Gold (LSE: SHG) has climbed 12% to 20p over the last five days. The company says that it will soon have cleared the bottlenecks holding back production increases and after visiting Shanta's New Luika mine in Tanzania recently, broker Liberum Capital selected the company as its top pick of UK junior miners, saying that it expects a "material lift in gold sales" in 2013. Shanta's guidance is for production to rise from 6,000oz of gold in 2012 to 70,000 oz in 2013.
FTSE 100 (UKX) miner Polymetal International (LSE: POLY) has gained 32% to 1,061p over the last six months, despite losing 700 tonnes of gold ore recently, when the cargo ship carrying the ore was shipwrecked. Polymetal cheered investors this week, when it doubled the resource estimates for its Albazino mine from 2.8 million ounces to 5.7 million ounces, and then declared a special dividend of $0.50 per share.
Identifying growth shares
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Roland does not own any shares mentioned in this article.