Gold Climbs As Tensions Rise, Plus News From Kirkland Lake Gold Inc. and Highland Gold Mining Ltd

Kirkland Lake Gold Inc. (LON:KGI) and Highland Gold Mining Ltd (LON:HGM) have delivered strong production results and big gains for investors so far in 2014.

| 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.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

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.

goldGold surged back above the $1,300 level last week on news that the US President Obama had authorised air strikes against militant targets in Iraq. Since then, the price of gold for immediate delivery has remained strong, touching a high of $1,322 per ounce on Friday, before slipping back to consolidate around the $1,306/oz. level.

However, news that Russia’s President Putin has sent a humanitarian mission to deliver aid into eastern Ukraine has raised suspicions that the move might be intended to disguise Russian troop movements, giving gold further impetus for a rise to its current level of $1,311 per ounce.

The share prices of physical gold ETFs have performed similarly strongly: the $34bn SPDR Gold Trust (NYSE: GLD.US) ETF has risen by 1.3% to $125.96 since last Tuesday, leaving it up by 8.5% so far this year, while London-listed Gold Bullion Securities (LSE: GBS) has risen by 1.4% to $125.84 over the same period, leaving it up by 8.8% so far in 2014.

Mining market update

There’s been action in the mid-cap mining market, too. Canadian gold producer Kirkland Lake Gold Inc (LSE: KGI) is up 9% to 248p today, and has gained 23% over the last week, taking its year-to-date rise to 69%.

Kirkland’s share price appears to have been weighed down by selling pressure from a major institutional shareholder which reduced its stake in the firm at the start of August, but this week’s first-quarter production update confirmed that the firm’s plans are on track, with a 22% improvement in head grades so far this year, and 40,528 ounces of gold mined during the first quarter, leaving the firm on track to hit 2014/15 production guidance of between 140,000 and 155,000 ounces of gold.

Another mid-cap miner that has outperformed the market this year is Highland Gold Mining Ltd (LSE: HGM) which is up by 17% so far this year — not bad considering that all of its operations are in Russia. The miner released a trading statement today reporting first-half production of 120,121 ounces, up by 13.7% on the same period last year. Production is expected to top 300,000 ounces for the full year, and if last year’s attractively low all-in sustaining costs of $842 per ounce are maintained, the firm’s attractive valuation could prove to be a bargain: Highland Gold currently trades on a 2014 forecast P/E of 6 and offers a prospective yield of 5.9%.

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 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

Passive income text with pin graph chart on business table
Investing Articles

Yields of up to 7%! I’d consider boosting my income with these FTSE dividend stocks

The London market has some decent-looking dividend stocks right now, and I’m tempted by these two for growing income streams.

Read more »

Young mixed-race couple sat on the beach looking out over the sea
Investing Articles

I’d put £20K in an ISA now to target a £1,900 monthly second income in future!

Christopher Ruane shares why he thinks a long-term approach to investing and careful selection of shares could help him build…

Read more »

Mature couple at the beach
Investing Articles

6 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 »

Black woman using loudspeaker to be heard
Investing Articles

I was right about the Barclays share price! Here’s what I think happens next

Jon Smith explains why he still feels the Barclays share price is undervalued and flags up why updates on its…

Read more »

Investing Articles

Where I’d start investing £8,000 in April 2024

Writer Ben McPoland highlights two areas of the stock market that he would target if he were to start investing…

Read more »

View of Tower Bridge in Autumn
Investing Articles

Ahead of the ISA deadline, here are 3 FTSE 100 stocks I’d consider

Jon Smith notes down some FTSE 100 stocks in sectors ranging from property to retail that he thinks could offer…

Read more »

Young female business analyst looking at a graph chart while working from home
Investing Articles

Why I think Rolls-Royce shares will pay a dividend in 2024

Stephen Wright thinks Rolls-Royce shares are about to pay a dividend again. But he isn’t convinced this is something investors…

Read more »

Investing Articles

1 of the best UK shares to consider buying in April

Higher gold prices and a falling share price have put this FTSE 250 stock on Stephen Wright's list of UK…

Read more »