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Gold, silver and platinum rise to lift Randgold Resources, Petropavlovsk, Fresnillo and Lonmin

Published: 00:34 10 Jul 2010 AEST

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Equity markets remained static today, but gold surged to recapture the US$1,200/oz level as the lowest price since May attracted increased demand from bargain hunters.

US and European shares held on to the impressive gains made yesterday on a jobless claims report from the Labor Department, which showed a decline to 454,000 instead of the projected 465,000. As a result, the Dow Jones Industrial Average in the US rallied 1.2% on top of Wednesday’s 2.8% gain, while the UK’s FTSE 100 climbed 1.8%. Both indexed were flat in early afternoon on Friday.

Gold is now seen as the main safe haven asset, normally moving inversely to the markets instead of going in the opposite direction to the US dollar as it did before investors started pouring money into the yellow metal amid volatility in shares and currencies. Last week, however, gold declined from its record level of US$1,266/oz to below US$1,200/oz despite a freefall in equities as traders were dumping precious metals to make up for the losses in shares.

Gold climbed to US$1,208/oz today, while silver and platinum reached US$18.09/oz and US$1,523/oz respectively.

Major mining stocks were in demand today with the exception of midcap silver producer Hochschild Mining (LON:HOC), which declined 3.5%. Peer from the FTSE 100 Fresnillo (LON:FRES) advanced 2.5%. Platinum miner Lonmin (LON:LMI) added 1.6% and gold producer Randgold Resources (LON:RRS) posted a small gain.

Specialty chemicals firm Johnson Matthey (LON:JMAT) gained nearly 1%.

Other FTSE 250 constituents Aquarius Platinum (LON:AQP) and gold miner Petropavlovsk (LON:POG) added more than 1.5%.

Commodity asset development company Mercator Gold (LON:MCR) surged 14% to take the lead among the small caps. South Africa and Botswana operating diamond miner Firestone Diamonds (LON:FDI) and Africa operating gold miner GMA Resources (LON:GMA) rallied 9% and 8%. UK-registered China operating copper and gold miner Central China Goldfields (LON:GGG) also did wlel, climbing 5.5%.

Turkey and Saudi Arabia operating gold explorer KEFI Minerals (LON:KEFI) moved in the opposite direction, shedding 6%.

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