Gold Flat On Weak Demand, Plus Updates On Petropavlovsk PLC, Highland Gold Mining Ltd and Chaarat Gold Holdings Ltd

SPDR Gold Trust (ETF) (NYSEARCA:GLD) & Gold Bullion Securities (LON:GBS) erase 2014 gains; Petropavlovsk PLC (LON:POG), Highland Gold Mining Ltd (LON:HGM) sink & Chaarat Gold Holdings Ltd (LON:CGH) boss reveals share sale

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

goldAfter touching a high of $1,221 per ounce on Thursday, gold has retreated back to recent lows and was trading at $1,207 per ounce on Friday morning, ahead of US markets opening. Markets are increasingly price in a near-term rise in US interest rates, weakening demand for gold, and tensions in the Middle East and Ukraine have failed to generate ‘safe haven’ demand for the yellow metal.

However, gold bullion dealers expect a surge in demand over the next week, when the market’s two biggest buyers of bullion — China and India — return from public holidays and enter traditional buying periods.

In the meantime, physical gold ETFs have drifted lower. The $33bn SPDR Gold Trust (NYSE: GLD.US) ETF has fallen by 0.6% to $116.74 since last Friday, cutting its gains for the year to date to just 0.5%. Over the same period, London-listed Gold Bullion Securities (LSE: GBS) has slipped 0.8% to $115.79, erasing its gains for the year and leaving the ETF’s shares trading at 2013’s closing price.

Gold mining update

Chaarat Gold Holdings (LSE: CGH) slipped after Dekel Golan, the firm’s chief executive and largest private shareholder, reported the sale of 545,064 shares in the company, reducing his stake to 5.62% of the firm’s share capital. Mr Golan said that the sale, which was worth around £87,210, was necessary ‘for personal reasons’. Chaarat’s share price fell 1.3% to 15.3p on the news, but remains up by 56% so far this year.

Following news of its planned rights issue, Petropavlovsk (LSE: POG) has continued to fall heavily. The debt-laden miner’s shares are currently trading at around 24p, down by 11% over the last week. On Thursday, major shareholder Norges Bank confirmed it had trimmed its holding below 4%, and it is possible that other major shareholders — with non-disclosable shareholdings of below 3% — may also have been selling the stock, driving the share price down due to a lack of buyers.

Russian gold miner Highland Gold Mining (LSE: HGM), whose solid interim results I commented on last week, has also suffered this week, shedding 9.5% of its value. However, the difference here is that approximately 4.6% — or 2.5p — of this decline was due to the miner’s shares going ex-dividend. The decline has left the miner’s shares trading on a forecast P/E of just 4, highlighting a potential — albeit risky — value opportunity.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Roland Head has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Investing Articles

Could the JD Sports Fashion share price double in the next five years?

The JD Sports Fashion share price has nearly halved in the past five years. Our writer thinks a proven business…

Read more »

Bus waiting in front of the London Stock Exchange on a sunny day.
Investing Articles

If interest rate cuts are coming, I think these UK growth stocks could soar!

Falling interest could be great news for UK growth stocks, especially those that have been under the cosh recently. Paul…

Read more »

Investing Articles

Are these the best stocks to buy on the FTSE right now?

With the UK stock market on the way to hitting new highs, this Fool is considering which are the best…

Read more »

Petrochemical engineer working at night with digital tablet inside oil and gas refinery plant
Investing Articles

Can the Centrica dividend keep on growing?

Christopher Ruane considers some positive factors that might see continued growth in the Centrica dividend -- as well as some…

Read more »

Smiling family of four enjoying breakfast at sunrise while camping
Investing Articles

How I’d turn my £12,000 of savings into passive income of £1,275 a month

This Fool is considering a strategy that he believes can help him achieve a stable passive income stream with a…

Read more »

Person holding magnifying glass over important document, reading the small print
Investing Articles

2 top FTSE 250 investment trusts trading at attractive discounts!

This pair of discounted FTSE 250 trusts appear to be on sale right now. Here's why I'd scoop up their…

Read more »

Smiling young man sitting in cafe and checking messages, with his laptop in front of him.
Investing Articles

3 things that could push the Lloyds share price to 60p and beyond

The Lloyds share price has broken through 50p. Next step 60p? And then what? Here are some thoughts on what…

Read more »

Young female business analyst looking at a graph chart while working from home
Investing Articles

£1,000 in Rolls-Royce shares a year ago would be worth this much now

Rolls-Royce shares have posted one of the best stock market gains of the past 12 months. But what might the…

Read more »