OceanaGold up as gold prices surge

NZPA

Thursday 14th July 2011

Shares in miner OceanaGold returned to levels of late August as gold prices surged to record levels, with the possibility of more Federal Reserve stimulus in the United States coupled with Europe's deepening debt crisis fueling bullion's longest winning streak in five years.

Bullion's gains accelerated after Fed chairman Ben Bernanke said the Fed was ready to ease monetary policy further if economic growth and inflation slowed much more. Silver rallied nearly 6 percent, moving in tandem with commodities, US stock markets and risk assets.

Some market watchers expect gold to extend its rally to above $US1600 an ounce later this year, while bullish option bets point to bullion as high as $US1700 an ounce by December.

OceanaGold shares were up 11c in early trading to 371, the highest level since late April, but its gains were not enough to enable the New Zealand sharemarket to scramble into positive territory in early trading.

Around 10.15am the benchmark NZX-50 index was down 2.67 points to 3421.68 points, having ended down 6 points yesterday.

Key stock Telecom lost 2.5c to 244 early, NZ Refining Co was down 4c to 351, Ebos Group dropped 3c to 682, and Sky City was down 2c to 362.

Contact Energy gained 3c to 536, Vector added 3c to 254, and Rakon lifted 2c to 102.

In the United States, stocks stopped a three-day slide, but ended well off highs as investors took a suggestion of further Federal Reserve stimulus as a mixed blessing.

The three major US stock indexes rose more than 1 percent at their peaks after Mr Bernanke's comments. Energy and materials stocks led gains, but the rally fizzled in afternoon trading.

The Dow Jones industrial average was up 0.4 percent to 12,491.61 at the close, the Standard & Poor's 500 Index gained 0.3 percent to 1317.72, and the Nasdaq Composite Index advanced 0.5 percent to 2796.92.

Comments from our readers

No comments yet