[miningmx.com] – SOUTH Africa’s precious metals shares shrugged off
the blues on Friday, notwithstanding a recovery in the rand against the dollar with the
gold and platinum index gaining 4.2% and 4.8% respectively.
Gold and platinum shares have been on the gain in the last 10 days, although for quite
different reasons.
Gold shares were lifted as it became increasingly clear that the US Federal Reserve
chairperson, Ben Bernanke, was to support a third round of quantitative easing in
which cash, in the form of bond-buying, would be pumped into the market.
Although QE3, as it has become known, is aimed at stimulating further recovery in the
US economy, it also has the effect of raising inflation against which gold is a
traditional hedge.
In the case of platinum shares, supply disruptions related to a spate of illegal strikes
and stoppages that have extended over 40% of South Africa’s productive platinum
capacity have seen platinum stocks gain a fifth since August 16.
“Gold should push through $1,800/oz. Platinum will follow,’ said Fairfax, a UK broker,
in a morning note.
Earlier in the day, Reuters cited Li Ning, an analyst at Shanghai CIFCO Futures, as
saying gold and silver were set to benefit from QE3, even though the expectation of
its unveiling had been in the market for some time.
“At least in the short- to medium-term, the Fed’s action will provide solid support for
gold and help it test $1,800, or even $1,900,’ he said.
Exchange traded products (ETPs) in platinum and gold, which reflect more stable,
longer-term positions in the metals, have also gathered pace.
Holdings in gold ETPs grew to a record for the eighth straight session to 2,493 tonnes
(7.977 million ounces), a 2% gain. The SPDR gold trust holdings rebounded to 1.292t
(4.93m oz) with a value of $72bn from 1,289t (4.12m oz) yesterday.
Positions in platinum ETFs had as early as last week reached 1.46m oz, just below the
record high of 1.49m oz.
Shares in AngloGold Ashanti, Gold Fields and Harmony Gold were 4.43%, 4.2% and
3.44% higher by midday in Johannesburg.
There were some spectacular gains in small cap platinum shares on a percentage
basis with Atlasta Resources, the black-owned platinum producer and exploration firm
in joint venture with Anglo American Platinum, gaining 21% equal to some 30c/share
to trade at R1.70/share.
The under pressure Eastern Platinum, which earlier this year mothballed its Crocodile
River project, was 10.5% stronger. It had gained 11c/share over the past 10 days.
The big platinum stocks, Impala Platinum, Amplats and Lonmin had gained 3.65%, 2%
and 5% respectively.
It remains to be seen whether the gains in the likes of Lonmin will be sustained as
unions mull over a R5,000 per month wage-improvement offer, according to a report
by Reuters that cited the National Union of Mineworkers on the figures.
