MENU

Gold Edges Higher As Kirkland Lake Gold Inc & Polymetal International PLC Make Gains

goldGold has continued to recover from last week’s two-month low of $1,273 per ounce, and the price of gold for immediate delivery has climbed by 0.6% from last week’s $1,281 closing level to trade at $1,287 per ounce, on Wednesday morning.

Physical gold ETFs have also edged higher this week: the $34bn SPDR Gold Trust (NYSE: GLD.US) ETF has gained around 0.3% to $123.35 so far this week, leaving it up by 6.2% so far this year.

In London, Gold Bullion Securities (LSE: GBS) has edged up by 0.4% to $123.35, leaving it 6.6% higher than at the start of 2014.

Mining market update

In the gold mining market, several companies have released news updates that have triggered significant market moves.

Kirkland Lake Gold Inc (LSE: KGI) has gained 13% to 301p so far this week, after reporting that its latest exploration drilling results have “confirmed additional high grade mineralization” in the firm’s core South Mine Complex. According to Kirkland, drilling highlights included a new footwall zone assayed at 442.3 grammes per tonne over 1.0 feet, and a separate footwall zone assayed at 594.5 g/tonne over 1.7 feet.

The firm also expects to be able to upgrade the resource category for the HM claim based on two new intersections less than 360 feet below ground level.

Kirkland’s share price has bounced back strongly this year, following the firm’s restructuring, and the Ontario, Canada-based company is the top performer in the mining sector over the last month, with a price gain of 42%.

Polymetal International (LSE: POLY) is another riser, gaining more than 3% to 540p on Wednesday, after reporting a 1% rise in first-half revenues, thanks to 12% sales growth outweighing the 10% fall in gold prices compared to the same period last year.

Polymetal’s rising production has also helped cut costs: the firm’s all-in cash costs fell by 22% to $938 per gold equivalent ounce, compared to the first half of last year, driving a return to profit for the Russian firm. Net earnings of $100m for the first six months of 2014 enabled the firm to declare an interim dividend of 8 cents per share, which should be doubled by the forecast final dividend, later this year.

Gold miners have been one of the biggest recovery stories of 2014, but the profits haven't been equally distributed. While Kirkland Lake has double-bagged already this year, Polymetal's shares remain down by more than 5%. For investors seeking to make profits from recovery stories, expert knowledge is essential.

In "Where We Think The Smart Money Is Headed", the Motley Fool's top analysts have highlighted three areas they believe offer major opportunities for savvy private investors. To bag your copy of this FREE, no-obligation report today, click here now.

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.