Last week was generally one of consolidation for Gold stocks and the yellow metal alike. The gold price moved sideways last week after the previous week’s exciting rise; today futures mainly held firm just below the $1,060/ounce level.
This morning saw a continuation of last week’s uneventful trading - in electronic trading the Comex futures are fairly unchanged from Friday’s close, and are currently changing hands around fifty cents lower at $1,055.50.
Over the course of the last month, the weak US Dollar has provided a fundamental base to the rally over recent weeks but there is a definitive speculative element also. Among speculators, ‘Net-long’ trading remains at an all time high in the futures market.
Famously the highly valued yellow metal has been regarded as fairly useless in a practical sense, however as an asset class it would appear that gold is gaining stature. Last week the CME Group began to accept gold as direct collateral for the first time in its history.
Gold seems to have had a persistent appeal over recent months, as uncertainty prevails for the US Dollar. The recent, all time high represents a 21% rise over the year to date. The most bullish analysts are expecting a sustained rally.
Gold miner Petropavlovsk (LSE: POG) advanced 2%, while International gold miner Randgold Resources (LSE: RRS) and Canada based Yamana Gold (LSE: YAU) recorded more modest gains rising just over half a percent.
Commodity asset development company Mercator Gold (AIM: MCR) and Western Australia operating Norseman Gold (AIM & ASX: NGL) led the sector with gains of over 8%.
Philippines focused gold producer Medusa Mining (AIM & ASX: MML) rose 5%, but fellow Philippines focused gold developer Metals Exploration (AIM: MML) slipped 6%. African focused nickel and gold exploration and development junior Nyota Minerals (ASX & AIM: NYO) and Australian gold and copper prospector Solomon Gold (AIM: SOLG) were also in selling mode, moving down 5% and 4% respectively.
Fiji focused gold miner Vatukoula Gold Mines (AIM: VGM) also pulled back slightly.