Gold has fallen by around 1.8% since last Tuesday, and the price of gold for immediate delivery remains close to its three-month low, at around $1,252 per ounce.
As a result, physical gold ETFs have drifted lower over the last week. The $33bn SPDR Gold Trust (NYSE: GLD.US) ETF has fallen by 2.4% to $120.86 since last Wednesday, cutting its gains for the year to date to just 4.1%.
Over the same period, London-listed Gold Bullion Securities (LSE: GBS) has slipped 2.7% to $120.20, leaving the fund’s shares just 3.9% higher than they were at the start of 2014.
Gold mining update
One of the world’s largest gold miners, South Africa-based AngloGold Ashanti (LSE: AGD), announced this morning that it would split its mining business into two, by transferring its mining assets outside South Africa into a new, London-listed holding company.
At the same time, the firm, which has struggled to make a profit in recent years and has net debt of more than $3bn, said that it would seek to raise $2.1bn in a rights issue, aimed at leaving the firm debt-free after the restructuring was completed, with certain limited exceptions.
Given that AngloGold’s market capitalisation is only $6.3bn, a rights issue of this size represents considerable dilution, and the firm’s shares were down by more than 11% in London trade today.
Elsewhere, small cap explorer SolGold (LSE: SOLG) rose by 7.5% to 6.5p this morning, after announcing a strong set of drilling results from its Cascabel project in Ecuador.
The firm said that hole 8 of its drilling programme had found visible mineralisation from 378.2m down to its current depth of 606.5m, while preliminary modelling from its IP survey supported its geological model and would be followed by the mobilisation of a second drill rig by mid-October.
Finally, Condor Gold (LSE: CNR) fell by more than 5% to 94p today. The company, which is working on producing a pre-feasibility study (PFS) for its 2.37 million gold equivalent ounce La India gold project in Nicaragua, published its interim results today.
However, today’s report contained little new information, ahead of the expected completion of the PFS at the end of September 2014, and investors may also be discouraged by the ongoing mining ban in El Salvador, where Condor owns 90% of a 1.1 million gold equivalent ounce resource.
