Randgold Resources, African Barrick and Petropavlovsk retreat as gold pulls back


Gold retreated after the US dollar made further gains, but still managed to hold on to the US$1,350/oz level it recaptured earlier today.

The American currency strengthened ahead of today’s release of the interest minutes from the latest policy meeting of the Federal Open Market Committee (FOMC).

Gold is seen as an alternative investment to the US dollar and usually moves inversely to the American currency, which has been pressured by anticipation of further quantitative easing from the Federal Reserve.

Safe haven demand has also supported gold today as equity markets were in decline with the FTSE 100 shedding 0.6%, while futures for the Dow Jones and S&P 500 indexes in the US declined 0.3%, pointing to a lower start on Wall Street.

Today’s UK inflation data for September had no impact on precious metals as it showed no change from the 3.1% rate in the previous month.

Goldman Sachs (NYSE:GS) has upped its price targets for gold to US$1,400/oz, US$1,525/oz for three and six months respectively.

The investment bank’s 12 month forecast was raised to an ultra-bullish US$1,650/oz.
Earlier this year, Goldman Sachs set its six month target at US$1,300/oz, which was quickly eclipsed by the yellow metal.

Gold pulled back to US$1,351/oz after nearly touching US$1,354/oz. Silver and platinum improved to US$23.25/oz and US$1,687/oz respectively.

Major mining stocks were in decline today. Platinum producer Lonmin (LON:LMI) declined 3%, while gold miners African Barrick Gold (LON:ABG) and Randgold Resources (LON:RRS) dropped 1.5% and 1% respectively. Silver miner Fresnillo (LON:FRES) also shed 1%.

Midcaps followed. Aquarius Platinum (LON:AQP) slipped 4%. Silver producer Hochschild Mining (LON:HOC) and Petropavlovsk (LON:POG) shed 1%.

Turkey and Saudi Arabia operating gold and copper explorer KEFI Minerals (LON:KEFI) was among the top performers in the sector, rallying 18.5%. Gold and high value base metals focused explorer and developer Stratex International (LON:STI) followed, advancing 13%.

Gold, zinc and silver miner focused on the Zheng Guang project in China Leyshon Resources (LON:LRL) and the only publicly listed gold mining company with primary operations inside the Republic of Uzbekistan, Oxus Gold (LON:OXS), each added 5.5%.

Coloured gemstone company with a focus on Zambian emeralds Gemfields Resources (LON:GEM) and gold mining company focused on projects in South Africa and Mozambique Pan African Resources (LON:PAF) rose 5%.

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