South African precious-metals miners are staging a comeback, with the sector heading for its best month on record, Bloomberg reported.
The FTSE/JSE Precious Metals and Mining Total Return Index has jumped about 38% in August, the most in Bloomberg data going back to 2006.
The rally has erased a year-to-date loss that stood at roughly 20% before August. AngloGold Ashanti, Pan African Resources and Gold Fields have led the surge, each climbing more than 40% this month.
August’s rebound is already stronger than any individual month during last year’s record rally, when the mining index gained more than 200% as bullion hit successive highs.
Gold has risen nearly 15% in August, helped by renewed demand for the “debasement trade” after the US Treasury’s unexpected intervention in the bond market revived concerns about government debt, deficits and dollar weakness.
African producers have benefited disproportionately because relatively low operating costs translate higher metal prices into stronger margins.
The miners’ resurgence is also lifting the wider South African equity market. The broader benchmark is up 4.6% this month, heading for its strongest performance since February, while precious-metals miners account for eight of its 10 best-performing stocks in August.
