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South Africa’s gold-mining index advanced to the strongest in a month as the price of bullion rose to a five-week high on speculation central banks around the world will do more to spur growth.
The FTSE/JSE Africa Gold Mining Index (JGOLD) climbed 3.5 percent to 2,431.70 by the close in Johannesburg, the highest since June 26. AngloGold Ashanti Ltd. (ANG), Africa’s biggest producer of the metal, climbed 3.7 percent, a sixth day of gains. Gold Fields Ltd. (GFI), the world’s fourth-biggest gold producer, jumped 3.5 percent.
The U.S. economy expanded at a slower pace in the second quarter as a softening job market prompted Americans to curb spending, increasing speculation the Federal Reserve will engage in a third round of quantitative easing. The dollar headed for a weekly drop versus the euro after European Central Bank President Mario Draghi said policy makers will do whatever is needed to save the single currency. Bullion for immediate delivery rose as much as 0.9 percent to $1,629.35 an ounce, the highest since June 19. Prices are up 2.1 percent this week.
“The weakening dollar is contributing to the rise in the gold price today,” Martin Strauss, a Pretoria-based stockbroker at PSG Konsult Ltd. said by phone. “Bargain hunting is also helping the gold shares as they came under severe selling pressure over the past few months.”
AngloGold’s shares have fallen 17 percent this year, while Gold Fields has slumped 13 percent.
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