Centamin PLC And Randgold Resources Limited Surge Higher As Gold Rebounds On Fed Caution

SPDR Gold Trust (ETF) (NYSEARCA:GLD) and Gold Bullion Securities (LON:GBS) recover from recent losses, plus Centamin PLC (LON:CEY) confirms production guidance and Randgold Resources Limited (LON:RRS) surges 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.

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 low of $1,183 per ounce at the start of this week, gold has climbed steadily, gaining 3.4% to reach $1,226 per ounce on Thursday morning.

Gold’s gains have been helped by comments from the US Federal Reserve suggesting that concerns are rising over the possibility of a renewed economic slowdown. This has helped to reverse some of the dollar’s recent gains and boost demand for gold, as it makes near-term interest rate rises much less likely.

As a result, physical gold ETFs have performed strongly this week. The $30bn SPDR Gold Trust (NYSE: GLD.US) ETF has risen by 2.5% to $117.49 since last Friday, taking it back into positive territory for the year, with a gain of 1.2% so far in 2014. Over the same period, London-listed Gold Bullion Securities (LSE: GBS) has climbed 2.6% to $117.63, leaving it up by 1.7% on the year to date.

Gold mining update

Egyptian gold miner Centamin (LSE: CEY) climbed 3.2% to 60p in early trade this morning, after the firm reported that gold production rose by 15% to 93,624 ounces during the quarter ended 30 September, compared to the same period last year.

Encouragingly, Centamin maintained its full-year forecast for production of 420,000 ounces of gold, and said that average grades rose during the third quarter and are expected to improve further during the fourth quarter, boosting production levels. As today’s release was a production update only, there was no mention of production costs or profit, but Centamin has previously forecast an average cash operating cost of $700 per ounce for this year, which should mean the firm cash flow positive at current gold prices.

Randgold Resources Limited (LSE: RRS) (NASDAQ: GOLD.US) rose by 6.9% to 4,324p during the first hour of trading this morning, as investors reacted to receding expectations for US interest rate rises and the renewed strength of gold. The FTSE 100 gold miner is expected to release its third-quarter update on 6 November, but confirmed last month that the majority of its operations are running as normal, despite the impact of the Ebola epidemic in West Africa.

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

Newspaper and direction sign with investment options
Investing Articles

When cheap markets meet favourable conditions, sentiment flips very quickly

London’s stock market is cheap — some sectors, even cheaper. Given a change in sentiment, the uprating could be substantial.

Read more »

Investing Articles

Empty Stocks and Shares ISA? I’d snap up these 3 stocks to start with!

Sumayya Mansoor explains how she would start to build wealth from scratch with an empty Stocks and Shares ISA and…

Read more »

Concept of two young professional men looking at a screen in a technological data centre
Investing Articles

7.7% yield and going cheap! Why is this unknown FTSE 250 stock flying?

It's no household name, but there's one FTSE 250 stock with a high dividend yield and booming profits that looks…

Read more »

Photo of a man going through financial problems
Investing Articles

I’d stop staring at the Nvidia share price and buy this FTSE 100 stock instead

This writer reckons there is a smarter way to invest in Nvidia today without taking on stock-specific risk. Here is…

Read more »

Young lady working from home office during coronavirus pandemic.
Top Stocks

5 stocks that Fools have been buying!

Our Foolish freelancers are putting their money where their mouths are and buying these stocks in recent weeks.

Read more »

Young Asian man drinking coffee at home and looking at his phone
Dividend Shares

These 3 FTSE 250 stocks offer me the highest dividend yields, but should I buy?

Jon Smith considers FTSE 250 shares with a very high yield, but questions whether the income is going to be…

Read more »

View of Tower Bridge in Autumn
Investing Articles

Is FTSE 100 takeover target DS Smith a great buy?

A mega-merger between FTSE 100 giants DS Smith and Mondi has the City abuzz. But is there any value in…

Read more »

Young Black man sat in front of laptop while wearing headphones
Investing Articles

The WPP share price dips as profits fall. Here’s why it could be a top dividend buy

I'm starting to think the WPP share price undervalues the stock, especially if the long-term dividend outlook comes good.

Read more »