Gold performed strongly towards the end of last week, as expected cuts to US monetary stimulus and the sell-off in emerging markets helped boost demand for safe-haven assets such as gold. Gold for immediate delivery ended the week up by 1.0% at $1,270 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 $32bn SPDR Gold Trust (NYSE: GLD.US), ended last week up 1.69% at $122.29, while London-listed Gold Bullion Securities (LSE: GBS) ended the week up 0.96% at $121.69. Over the last twelve months, shareholders of Gold Bullion Securities have seen the value of their holdings fall by 27.5%, while the value of SPDR Gold Trust shares has fallen by 23.7%.
Several major London-listed gold miners delivered gains for investors last week, following strong fourth-quarter production reports:
African Barrick Gold (LSE: ABG) climbed 11% to 220p last week, after the firm reported that its all-in sustaining costs of production fell below the market price of gold to $1,171 per ounce during the fourth quarter, a reduction of 8% on the third quarter and of 30% on the same period in the previous year. The firm also reported a 19% year-on-year reduction in cash costs, which fell to $774 per ounce of gold sold.
Polymetal International (LSE: POLY) rose by 10% to 596p last week, after the company said that it had exceeded its original production guidance for 2013 and produced 1.28 million gold equivalent ounces, a 21% increase on 2012. Gold production rose by 37% last year to 805,000 ounces, and Polymetal said that its all-in sustaining cash costs are expected to be between $975 and $1,025 per gold equivalent ounce in 2014, comfortably below the current market price of gold.
Randgold Resources (LSE: RRS) gained 8.9% to 4,285p last week, after Randgold confirmed that the firm’s Kibali mine in the Democratic Republic of Congo was expected to exceed its gold production target and deliver a net profit for its first quarter of operation, the final quarter of 2013. Randgold says that although substantial development work remains to complete the Kibali project, it is expected to meet its forecast gold production of 550,000 ounces in 2014.
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> Roland does not own shares in any of the companies mentioned in this article.