Gold Edges Higher On Russia-Ukraine Tensions, Centamin PLC and Highland Gold Mining Ltd Outperform Market

goldbarancoinsGold ended last week up by 0.6% at $1,303 per ounce, despite volatility that saw it drop as low as $1,268 per ounce ahead of last week’s US jobless claims report.

The price rebounded rapidly when reported unemployment claims were higher than expected, and news of rising tensions in Ukraine hit the headlines, giving rise to expectations of further sanctions against Russia.

The main route by which traders and investors gain exposure to gold is through exchange-traded physical gold funds such as the $33bn SPDR Gold Trust (NYSE: GLD.US) ETF, which closed last week up by 1.0% at $125.43.

A London-listed alternative, Gold Bullion Securities (LSE: GBS), ended the week up by 0.9% at $125.00. So far this year, shareholders of Gold Bullion Securities have seen the value of their holdings rise by 3.9%, while the value of SPDR Gold Trust shares has risen by 6.3%.

Gold mining equities

The star performer in the gold mining sector last week was Centamin (LSE: CEY), which climbed almost 20% to 65p after the Egyptian gold miner released a statement informing investors that a new law had been introduced in Egypt, which could bring to an end the long-running third-party challenge to the legitimacy of Centamin’s mining licence.

Centamin has been fighting this challenge since October 2012, but the firm believes the case brought against it will be made void by the new law, which will also apply to current open cases, and could end the uncertainty faced by Centamin investors over the last 18 months.

Another strong performer was Highland Gold Mining (LSE: HGM), which gained 4.6% to 68p after it reported an 8% increase in gold equivalent production, which rose to a record 233,696 ounces in 2013.

Highland’s all-in sustaining cash costs fell to $842, comfortably below the current price of gold. The company declared a final dividend of 2.5p, bringing the total dividend for 2013 to 5p — equivalent to a trailing yield of 7.3%, at the firm’s current 68p share price.

Highland Gold Mining's 7.3% dividend is one of the highest on the market, but is it safe and sustainable? The Motley Fool's latest special report, "How To Create Dividends For Life" provides five, simple dividend tests you can apply to the stocks in your portfolio to detect signs that a dividend cut might be likely. This report is completely FREE and without obligation and could save you from costly losses. To get your copy today, simply click here now.

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