JOHANNESBURG - LISTED gold stocks were on the back foot yesterday taking their cue from the spot gold price which fell amid heightened uncertainty on the fate of the US presidency.
Gold exchanged hands at $1 888.22 (R30 405) an ounce at 2pm, before rebounding to $1 916.55 at the close of trade as tensions continued on the tight race between US President Donald Trump and Democratic challenger Joe Biden.
The US presidential race hinged on a few states, Wisconsin, Michigan and Pennsylvania.
The Gold Mining Index fell 2.74 percent to 4 704 points, while the Resources Index was 0.81 percent lower at 49 708 points.
At 2pm yesterday Gold Fields recorded the most significant fall among its peers after declining 3.12 percent to R184.10 a share, while DRDGold recorded a 2.70 percent drop to exchange hands at R18.74 a share.
Harmony Gold was 2.45 percent lower at R83.89 a share, AngloGold Ashanti was 2.36 percent lower at R401.85 a share and Sibanye-Stillwater was 0.87 percent weaker at R50.39 a share.
Chief analyst at ActivTrades Carlo Alberto De Casa said that the dollar had strengthened, triggering some selling on the majority of commodities, including gold and silver.
De Casa said that investors were in risk-off mode, but were not yet buying gold.
“They want to see if Biden can finish his coming back and achieve a victory in order to calibrate their portfolio,” De Casa said. “They are in a wait-and-see mode.”
De Casa said investors were looking for clarity before taking positions, trying to predict what would be the next major movement for bullion.
He said the gold spot price, after surpassing $1 900 an ounce, had now fallen again to $1 890 an ounce, and that it was trading in the same lateral trading range of the last three months between $1 850 an and $2 070 an ounce.
“If we zoom in on the last few weeks, we have a first resistance at $1 910, followed by another one at $1 930. The key support zone of $1 850 to $1 860 remains crucial for keeping gold in this lateral tendency,” De Casa said.
The gold price has spiked about 30 percent this year and saw S&P Global Ratings taking positive ratings action on gold producers AngloGold Ashanti, Gold Fields and Sibanye-Stillwater on Monday.
S&P Global Ratings said the action was based on its belief that the three entities would generate stronger cash flow through 2022 than forecast earlier this year, and would use the additional cash flow to accelerate debt reduction, which was already a key focus.
“Higher gold and platinum group metal prices are allowing precious metals’ mining companies, in particular those prioritising deleveraging, to significantly reduce net debt, boosting credit metrics, while maintaining a solid liquidity position,” S&P Global Ratings said.
BUSINESS REPORT