Gold Slips As Asian Demand Weakens, But African Barrick Gold PLC Moves Higher

Gold Bullion Securities Limited (LON:GBS) and SPDR Gold Trust (ETF) (LON:GLD) fell further last week, but African Barrick Gold PLC (LON:ABG) found support and edged higher.

| 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.

Gold fell 2.5% to $1,295 per ounce last week, as growing confidence in the US economy combined with weakening demand in China to push the price of the precious metal below the $1,300 level once more. Gold has now fallen by more than 7% from its 2014 peak of $1,392 per ounce, in the space of just two weeks.

In the US, confidence is rising in the strength of the economic recovery, and government data indicate that hedge funds reduced their long exposure to both gold and silver during the week to March 25, suggesting they believe gold’s strong gains during the first part of this year may have reached an end.

Meanwhile in China, the price of spot gold on the Shanghai Gold Exchange has fallen to $1.40 below the London price, according to Bloomberg data, in a sign that gold demand in China may be weakening.

The main route by which traders and investors gain exposure to gold is through gold funds such as the $35bn SPDR Gold Trust (NYSE: GLD.US) ETF, which ended last week down by 1.9% at $124.56. A London-listed alternative, Gold Bullion Securities (LSE: GBS), ended the week down 2.4% at $124.20. So far this year, shareholders of Gold Bullion Securities have seen the value of their holdings rise by 4.2%, while the value of SPDR Gold Trust shares has risen by 5.6%.

Gold mining equities

While most gold mining stocks fell last week as the price of gold weakened, African Barrick Gold (LSE: ABG) edged higher towards the end of the week, thanks to a supportive round of broker updates, including an ‘overweight’ recommendation from JPMorgan Chase & Co.

African Barrick’s shares rose by 3% in early trading this morning, but they remain nearly 14% lower than one month ago, thanks to the big fall seen when Barrick Gold announced that it had sold a further 10% of its stake in African Barrick Gold.

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 does not own shares in any of the companies mentioned in this article.

More on Investing Articles

Investing Articles

2 mouthwatering FTSE growth stocks I’d buy and hold for 10 years

Growth stocks purchased today could be the gateway to many years of capital growth and returns. Here are two picks…

Read more »

Investing Articles

Can the IAG share price really be as dirt cheap as it looks?

While most shares have recovered since the Covid days, the IAG share price is staying stuck to rock bottom. Surely…

Read more »

Investing Articles

BAE Systems shares are flying! Have I missed the boat?

Sumayya Mansoor looks into whether or not BAE Systems shares are still a good buy for her portfolio after the…

Read more »

British flag, Big Ben, Houses of Parliament and British flag composition
Investing Articles

1 heavyweight FTSE 100 share I’d buy as London retakes its crown

Some Footsie firms are extremely large, but that doesn't mean they couldn't get even bigger. Here's one such FTSE 100…

Read more »

Investing Articles

I’d buy 5,127 National Grid shares to generate £250 of monthly passive income

With a dividend yield of 6.5%, Muhammad Cheema takes a look at how National Grid shares can generate a healthy…

Read more »

Investing Articles

The FTSE 100’s newest member looks like a no-brainer to me!

This Fool explains why she sees the newest member of the FTSE 100 as a great opportunity after its recent…

Read more »

Investing Articles

Empty Stocks and Shares ISA? Here’s how I’d start earning a second income from scratch

Like the thought of earning extra cash tax free? Our writer explains what he'd do to begin earning passive income…

Read more »

Happy young female stock-picker in a cafe
Investing Articles

No savings at 25? I’d start by investing £3k in these 3 red-hot FTSE 100 shares

Harvey Jones thinks these three FTSE 100 stocks would be a great way to kickstart a portfolio of UK shares.…

Read more »