Gold Stays Firm as Bullabulling Gold Ltd and Central Rand Gold Limited Surge Higher

goldAfter surging 5.7% higher over the previous three weeks, thanks to geo-political tensions in Iraq and Ukraine, gold has remained broadly stable over the last week, and was trading around the $1,325 per ounce mark at the time of writing.

One of the main routes by which investors gain exposure to gold is exchange-traded gold funds such as the $33bn SPDR Gold Trust (NYSE: GLD.US) ETF, which has climbed 0.9% to $128.04 over the last week, leaving it up by 10.3% so far this year. Meanwhile, a London-listed alternative, Gold Bullion Securities (LSE: GBS), rose 1.0% to $127.30 over the last week, leaving it up by 10.0% so far in 2014.

Gold equity news

Gold’s recent performance has lifted most mining stocks, but two small miners have seen dramatic growth today after releasing positive updates to the market.

Bullabulling Gold (LSE: BGL) rose by 8.5% to 4.2p in early trade, after the company said that Norton Gold Fields Limited had increased its stake in the firm to 41%, passing the threshold needed to increase Norton’s offer price to 8 cents (approx. 4.4p) per Bullabulling share.

However, the firm’s share price fell back after heavy initial trading, when a second announcement revealed that one reason for Norton’s increased holding was that one of Bullabulling’s major shareholders, Resolute Mining Limited, had sold its 5.78% stake in Bullabulling to Norton, suggesting that Resolute’s management believe the Norton offer is a good deal. By late morning, Bullabulling’s share price was trading at around 3.95p, just 2% higher than its opening price.

One stock that has held onto its early gains today is Central Rand Gold Limited (LSE: CRND), which opened up by 20% at 12p this morning. This explosive increase was triggered by news that the successful implementation of Central Rand’s Acid Mine Drainage solution had resulted in the firm’s audited mineral resources doubling from 4.5m ounces of gold to 9.9m ounces, as the drainage means that more areas of mineralisation are now potentially available for economic extraction.

The volatile movements in the share price of these two small cap gold explorers highlight the potential profits of investing in such stocks.

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