Gold index surges 7% on 17-year bullion high
September 18, 2005
Johannesburg - Harmony Gold Mining led gains by local gold producers on Friday as bullion prices rose to their highest level in 17 years in London and New York.
The seven-member FTSE/JSE Africa gold mining index jumped 6.96 percent on the day to a 10-month high of 2012.61 points. The move was the index's biggest one-day gain since December 8 and took the benchmark's advances in the past three sessions to 15 percent.
Spot gold rose as high as $460.45 (R2 932) an ounce in London as investors bought the metal on speculation it would provide a haven from rising consumer prices and energy costs. After dipping to $457.20 at the afternoon fix, the metal closed at $458.70 in London, $3.90 up on the day.
"The stocks are very geared to the rising gold price," said Sandy McGregor, the head of resources at Allan Gray, the country's largest privately owned money manager. "The higher gold price really focuses the minds of investors who previously would have been neglecting the gold industry."
Allan Gray holds about 8.8 percent of Harmony and a quarter of Western Areas, which owns the world's largest gold deposit.
Shares in Harmony, the third-biggest local producer, climbed 11 percent to R64.74, while bigger rival Gold Fields advanced 6 percentto R87. AngloGold Ashanti, the world's second-biggest producer, gained 5.8 percent to R270. Anglo American, which owns 51 percent of AngloGold, rose 4.7 percent to a two-and-a-half-year high of R178.50.
South Africa is the world's biggest producer of gold, which accounts for about 13 percent of exports.
By the close in Johannesburg, gold for delivery in December had risen to $464 an ounce on the Comex division of the New York Mercantile Exchange, the highest level for a most active bullion contract since June 1988. - Bloomberg
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