3 Gold Shares Rising Strongly
Mar 4th 2013 11:18AM
Updated Mar 4th 2013 11:34AM
LONDON -- Gold's slide slowed last week, and after climbing to a mid-week high of $1,617, gold on the April contract finished the week just 0.9% lower, at $1,572.
Of course, the only practical way for most private investors to invest in gold is through exchange-traded funds. The largest gold ETF, the $64 billion SPDR Gold Trust , fell 0.4% to $152.44 last week, while London-listed Gold Bullion Securities rose 0.03% to $151.84 over the same period. So far this year, shareholders of Gold Bullion Securities have seen the value of their holdings fall by 5.3%, while the value of SPDR Gold Trust shares has fallen by 5.9%.
Gold's big movers
The share price of gold miners is closely linked to the price of gold, but it's not always a perfectly matched relationship, and last week we saw the share price of several of the U.K.'s biggest listed gold producers start to recover, after being battered over the previous two weeks by falling metals prices and broker downgrades.
Russia-focused Polymetal International gained 2% to 1,002 pence during the week, making it the top-performing big-cap miner. Polymetal's gains followed the previous week's news that the firm had acquired a new exploration license in Russia, covering an area with probable ore reserves representing 700,000 ounces of gold. The company believes these reserves will be cheaper to mine than some of its existing assets, boosting profitability at lower gold prices. Polymetal's share price could also see further support from institutional fund buying over the next fortnight, as it is due to be added to the widely used STOXX Europe 600 index on March 18, 2013.
Randgold Resources climbed 1% to 5,430 pence last week, against the backdrop of a falling gold price. News that Mali's gold production exceeded forecasts in 2012 and was not affected by the country's civil war may have helped stabilize Randgold's share price -- in 2012, almost 75% of Randgold's production came from its mines in Mali. The gold mining region of the country is in the south, which has not yet been affected by last March's military coup or the subsequent conflict. Mali's Mines Ministry is forecasting that industrial gold production will rise from 46 tonnes to 53 tonnes in 2013, despite the ongoing problems.
New Gold rose 1.7% to $9.26 last week, after the company released its fourth-quarter results last week, revealing that full-year production from the company's four producing mines reached 113,000 ounces, with a cash cost of just $254 per ounce, considerably lower than the industry average. Quarterly cash flow was $106 million, the highest ever such figure for the company, contributing to record net earnings for 2012 of $199 million.
Shares vs. commodities
Shares in commodity companies have outperformed their underlying commodities many times over the last 10 years, thanks to their ability to magnify their gains through successful development of new resources. This free report from the Fool, "10 Steps to Making a Million From the Market" contains some excellent tips on identifying and investing in potential multibagger shares, including resource shares like gold miners. I strongly recommend that you click here and download it now, as it will only be available for a limited time.
The article 3 Gold Shares Rising Strongly originally appeared on Fool.com.Roland Head has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.