By Kishori Krishnan
Toronto’s main stock index TSX closed lower on Monday after four straight positive sessions, as gold miners retreated on lower bullion prices. The price of gold slid below $945 an ounce on pressure from a firmer US dollar.
So far, the Kinross Gold stock has hit a 52-week low of $6.85 and 52-week high of $20.98. Kinross Gold stock has been showing support around $18.65 and resistance in the $20.15 range. Technical indicators for the stock are Bullish.
Goldcorp (NYSE: GG) ended the last trading session at $35.87. So far, the stock has hit a 52-week low of $13.84 and 52-week high of $40.82. Goldcorp stock has been showing support around $35.04 and resistance in the $36.88 range. Technical indicators for the stock are Bullish.
In London, gold futures fell toward $940 an ounce Monday, losing 1 per cent in thin volume. The strength of the dollar is expected to provide a catalyst for the near-term direction of the metal, analysts said.
The price of gold has been largely confined to a trading range between $930 and $960 in the past three months, as the metal was pressured by a resurgent dollar but supported by long-term inflation worries and lingering economic uncertainties.
“The dollar turned around and gold fell in very thin market volume. It was due for a fall anyway. How many times has gold been to $960 and failed? Quite a few,” said Leonard Kaplan, president of Illinois-based Prospector Asset Management.
US December gold futures settled down $11, or 1.2 per cent, at 943.70 an ounce on the COMEX division of the New York Mercantile Exchange.
“The dollar is a key driver,” said John Meyer, analyst at Fairfax investment bank. “Investors will adopt a wait and see attitude. Rather than just blindly following oil higher, they will wait to see what the dollar will do.”
Silver often follows gold, although sometimes with greater moves since it is a less-active market and thus more prone to volatile price swings. But so far in 2009, December silver has risen 26 per cent, while December gold is up 6 per cent. “Silver sort of has a dual personality,” said Bart Melek, global commodity strategist with BMO Capital Markets. Added Tom Pawlicki, analyst with MF Global, “It’s the risk-appetite theme, based on the expectation that the economy is going to recover. Silver, having more industrial applications, is benefitting from that.”
Lake Shore Gold Corp (TSX: LSG) has announced results for three new holes, as part of its ongoing 22,000 metre diamond drill program at the Thunder Creek joint venture property, located immediately adjacent to Lake Shore Gold’s 100 per cent owned Timmins Mine project.
The company holds a 60 per cent interest in the Thunder Creek property, and is the operator of the joint venture with West Timmins Mining Inc.
The company continues to establish large gold system at the Thunder Creek property. Tony Makuch, president and CEO of Lake Shore Gold, commented: “The results continue to expand the mineralized structures at Thunder Creek and suggest the presence of a large scale gold system on the property which is closely linked to a major Porphyry body.”
Eldorado Gold Corporation’s (AMEX:EGO) cost of production is one of the lowest in the world, which becomes a significant factor during times of high energy costs rising faster than the gold price.
During Q2, the company reported net income of $25.9 million or $0.07 per share and cash flow from operations of $36.7 million or $0.10 per share for the second quarter ended June 30, 2009.
Paul N Wright, president and chief executive officer of Eldorado, commented: “Our total production increased by close to 38 per cent over production in the first quarter of 2009. We are also proud to have robust margins and remain one of the lowest cost pure gold producers in the industry. These results keep us on track with our forecasted 2009 total production of approximately 330,000 ounces at a cash operating cost of $300 per ounce.”
He added that with the recent investment in Sino Gold, the company shall continue to focus on its strategy of regional growth.
South Africa’s Harmony Gold Mining Co (HARJ.J) suspended operations at its Doornkop Plant in South Africa on Monday after a fatality at the plant.
A worker died after an accident at the plant’s conveyor belt on Monday, the company said in a statement. Spokeswoman Esha Brijmohan told Reuters the company and government officials were investigating the cause of the accident, and work at the plant had been temporarily stopped.