Gold ETFs such as the SPDR Gold Trust (ETF) (NYSEARCA:GLD) fell last week, but some small-cap gold miners like Condor Gold PLC (LON:CNR) registered gains despite the weakening gold price.
Gold weakened last week, dipping below the $1,600/oz. level during trading on Friday, before recovering to end the week down by 3.7% at $1,606.
Of course, the only practical way for most private investors to invest in gold is through exchange-traded funds. The largest gold ETF, the $72bn SPDR Gold Trust (NYSE: GLD.US), fell 3.6% to $155.76 last week, while London-listed Gold Bullion Securities (LSE: GBS) fell 3.7% to $155.00 over the same period. So far this year, shareholders of Gold Bullion Securities have seen the value of their holdings fall by 2.9%, while the value of SPDR Gold Trust shares has fallen by 3.9%.
Gold's big movers
Last week was a bad week for big gold producers, as the weakening price of gold combined with a downbeat sector forecast from brokers Citigroup to push down the prices of several of the UK's largest gold producers. Randgold Resources ended the week down by 5.8%, Petropavlovsk was down 8%, African Barrick Gold was down 17% following disappointing results, and gold and silver producer Fresnillo was down by 6.6%. In the US, Newmont Mining Corporation closed down by 2.6% on the week, Gold Fields fell 5.4% and Barrick Gold Corporation fell 1.6%.
Despite this, some small-cap gold exploration and mine development companies managed to register gains on the week. One example is Condor Gold (LSE: CNR), a company that has featured before in these pages and appears to be gaining strong investor backing for its gold mine project in Nicaragua.
Condor Gold edged up 1.5% to 168p last week, solidifying an 8% share price gain over the last month. Condor's share price rose despite news that it had raised £7m through a private placing of new stock with institutional investors, at a price of 160p, a slight discount to the company's share price. The majority of the placing was with a company called Regent Pacific Group, which has also agreed to invest a further £3m following additional due diligence. The fact that Condor's share price rose following the placing, despite its dilutive effect, suggests that investors find the firm's plans for its 2.3 million ounce gold resource in Nicaragua very attractive. Condor's share price was up 1% to 170p shortly after London markets opened this morning.
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Roland does not own any shares mentioned in this article.