The price of gold fell steadily last week, touching a low of $1,180 per ounce early on Friday, before bouncing back strongly during Friday’s trading. Despite these late gains, gold for immediate delivery was down by 4.9% at $1,244 per ounce by the end of the week.
Of course, the only practical way for most private investors to invest in gold is through exchange-traded funds. The largest gold ETF, the $38bn SPDR Gold Trust (NYSE: GLD.US), ended the week 4.3% lower at $119.11, while London-listed Gold Bullion Securities (LSE: GBS) dropped 5.1% to end the week at $117.00. So far this year, shareholders of Gold Bullion Securities have seen the value of their holdings fall by 26.8%, while the value of SPDR Gold Trust shares has fallen by 27.0%.
Gold’s big movers
Gold’s sustained fall made it a painful week for gold miners last week, but several miners still managed to outperform the price of gold and post gains last week:
Kirkland Lake Gold (LSE: KGI) climbed 2% to 255p last week, leaving the firm’s share price up by 37% since it hit a four-year low in April. Kirkland produced 91,518 ounces of gold last year from its Ontario, Canada mine, which benefits from a more stable political and fiscal operating environment than Africa-based peers. The firm expects to sell 150,000 – 180,000 ounces of gold in 2013/14, and had cash resources of $87.9m at the end of January 2013.
Pan African Resources (LSE: PAF) gained 2.4% to 12.6p last week and made further progress in early trading this morning, when it rose 3.9% to 13.25p after it confirmed that it had begun gold production at its Barberton Tailings Retreatment Project (BTRP) in South Africa. Pan African said that BTRP had been completed on schedule and within budget and is expected to retreat 100,000 tonnes of gold tailings per month, at an estimated average cash cost of $800 per gold ounce, well below the current price of gold.
Coeur Mining (NYSE: CDE.US) rose 7.2% to 13.3p last week after it announced that it had settled an outstanding claims dispute with Rye Patch Gold Corp at its Rochester mine in Nevada. Coeur will make a $10m cash payment and provide Rye Patch with a 3.4% net smelter royalty covering 39.4m silver equivalent ounces of net metal sales. Production from the site is expected to begin in January 2014, but there is no minimum payment requirement under the net smelter royalty deal.
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> Roland does not own shares in any of the companies mentioned in this article.
