Tags: South Africa | Gold | Stocks | Bullion

South Africa Gold Stocks Plunge to 13-Year Low as Bullion Drops

Friday, 31 Oct 2014 07:33 AM

Gold stocks in South Africa, the world’s sixth-biggest producer of the metal, fell to a 13-year low as bullion dropped to the lowest since 2010 amid signs of an improving U.S. economy, curbing haven demand.

The five-member FTSE/JSE Africa Gold-Mining Index retreated as much as 6 percent and traded 4.8 percent down at 951.63, the weakest intraday level since April 2001, as of 10:17 a.m. in Johannesburg. Sibanye Gold Ltd., the country’s biggest producer, fell the most on record, while AngloGold Ashanti Ltd., the world’s third-largest producer, declined to an almost 14-year-low.

Gold erased the year’s advance after U.S. gross domestic product beat estimates and China probed a surge in precious-metal exports. The Federal Reserve this week cited an improving job market in deciding to end bond-buying, while maintaining a commitment to keep rates low for a considerable time. Bullion fell as much as 2.6 percent to $1,167.49 an ounce, the lowest since July 30, 2010.

“The factors that held gold for so long are no longer valid,” Peter Major, a mining analyst at Cadiz Specialised Asset Management in Cape Town, said by phone. With U.S. growth accelerating and the dollar strengthening, “it’s like pulling the legs from underneath a table” for gold, he said.

U.S. GDP grew at a 3.5 percent annualized rate in the three months ended September after a 4.6 percent gain in the second quarter, Commerce Department figures showed yesterday in Washington. It marked the strongest back-to-back readings since the last six months of 2003. The Bloomberg Dollar Spot Index, which tracks the greenback against 10 major currencies, reached 1,077.37 today, the strongest since Oct. 3.

Sibanye Gold had the biggest decline among members of the index, losing as much as 11 percent and trading 7.4 percent down at 20.80 rand.

AngloGold retreated 5.7 percent to 90.55 rand, the lowest since December 2000, with 165,560 shares traded, or 14 percent of the three-month daily average.

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Gold stocks in South Africa, the world's sixth-biggest producer of the metal, fell to a 13-year low as bullion dropped to the lowest since 2010 amid signs of an improving U.S. economy, curbing haven demand.
South Africa, Gold, Stocks, Bullion
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2014-33-31
Friday, 31 Oct 2014 07:33 AM
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