Gold put in a solid performance last week, trading between $1,306 and $1,344 per ounce, before ending the week up by 1.1%, at $1,336 per ounce.
Of course, the only practical way for most private investors to invest in gold is through exchange-traded funds. The largest gold ETF, the $38bn SPDR Gold Trust (NYSE: GLD.US), ended last week up 1.25% at $128.97, while London-listed Gold Bullion Securities (LSE: GBS) ended the week up 1.1% at $129.04.
So far this year, shareholders of Gold Bullion Securities have seen the value of their holdings fall by 20.0%, while the value of SPDR Gold Trust shares has fallen by 21.0%.
Archipelago Resources (LSE: AR) leapt 23% to 57.6p last week, after the Indonesian gold miner received a 58 pence per share cash takeover offer from the firm’s main shareholder, PT Rajawali Corpora, an Indonesian industrial conglomerate that intends to restructure Archipelago into an Indonesian listed entity.
Although the offer price represents a 20% gain on Archipelago’s share price three months ago, it represents a 4% decline on the gold miner’s share price at the beginning of the year, illustrating how the falling price of gold has slashed the valuations of mining firms, even profitable ones such as Archipelago.
African Barrick Gold (LSE: ABG) rose by 6.4% to 165p last week, helped by the firmer gold price, and by a number of broker upgrades issued in the wake of a presentation by the firm’s CEO at the Denver Gold Forum.
African Barrick’s share price may also have gained some support thanks to an increase in the shareholding held by the Vanguard Precious Metals and Mining Fund, which purchased approximately £2.5m of African Barrick shares last week, increasing the fund’s holding in the firm to 4.3%.
Petropavlovsk (LSE: POG) edged up 2% to 77p last week. The firm recently announced a $25m disposal of its 76% interest in an alluvial gold mining business, OJSC Berelekh.
Berelekh produced 52,500 ounces of gold in 2012, representing 7% of Petropavlovsk’s total production, but its cash costs were extremely high, at $1,400 per ounce, suggesting that any current gold production from Berelekh would be loss-making and might add to the financial pressure caused by Petropavlovsk’s $1.15bn net debt.
