Sept. 24 (Bloomberg) -- Peter Hambro Mining Plc, the second- biggest miner of gold in Russia, almost doubled first-half profit as prices and production increased. The shares rallied to the highest since February.
Net income rose to $21.4 million, or 26.5 cents a share, from $11.6 million, or 14.4 cents, a year earlier, London-based Peter Hambro said today. Sales climbed 58 percent to $93.1 million. Production from the Pioneer project, the company's biggest gold deposit, started today, Chairman Peter Hambro said by phone from London.
``We're still confident in our 1 million-ounce target'' for total annual gold production by 2010, compared with 283,000 ounces this year, he said.
Gold has advanced for six consecutive years in London, its best run since at least the 1940s, and reached a 27-year high last week. The metal is seen by some investors as a hedge against inflation and further declines in the dollar, which slipped to a record low against the euro today.
Shares of Peter Hambro rose 57 pence, or 4.9 percent, to 1,217 pence in London, the highest closing price since Feb. 26. Peter Hambro has a market value of 987.7 million pounds ($2 billion).
Gold averaged $658 an ounce in the first six months of this year, 12 percent higher than a year earlier. The metal will probably exceed its record of $850 an ounce by the end of this year, Hambro said in the interview.
`Flight From Paper'
``People are buying large quantities'' of bullion in China and India, he said. ``We're seeing a flight from paper promises.''
The company's production grew 24 percent to 134,300 ounces in the first half, with the Pokrovskiy mine contributing 116,800 ounces. Hambro declined to give a forecast for Pioneer's output.
``They say they're on target for Pioneer, so it looks good,'' said Tim Dudley, an analyst at Arbuthnot Securities Ltd. in London. ``I would have liked to see a bit more detail.''
OAO Polyus Gold was Russia's largest producer last year.
Monday, September 24, 2007
Bullion rise, reserves in focus as gold miners meet
DENVER, Sept 24 (Reuters) - The rally in gold bullion prices to a 28-year peak last week has driven gold mining stocks to new highs, in spite of the producers' struggle to control costs and to replace reserves.
Global gold mining executives will no doubt have to tackle the contrasting themes when they present their corporate pictures at the industry's annual meeting in Denver.
At the 18th Denver Gold Forum, which started on Sunday and runs through Wednesday, 72 companies will make their cases to mining analysts on the sell-side and 253 buy-side fund managers, said the Denver Gold Group, the organizer.
I think one theme that will be cast most starkly in contrast will be the difference between gold the asset, which looks better and better, and gold mining the business, which looks tougher and tougher all the time," said John Hill, director, metals research at Citigroup in San Francisco.
To be sure, gold mining companies are benefiting from bullion's rise. AMEX Gold Miners index <.GDM>, a gauge of gold producers' performance, rallied to a 16-month high on Friday, after skyrocketing 40 percent since the index hit a bottom in mid-August.
During the same period, gold has gained nearly $100 to Friday's peak of $739 an ounce, from a low of $641.10.
Global gold mining executives will no doubt have to tackle the contrasting themes when they present their corporate pictures at the industry's annual meeting in Denver.
At the 18th Denver Gold Forum, which started on Sunday and runs through Wednesday, 72 companies will make their cases to mining analysts on the sell-side and 253 buy-side fund managers, said the Denver Gold Group, the organizer.
I think one theme that will be cast most starkly in contrast will be the difference between gold the asset, which looks better and better, and gold mining the business, which looks tougher and tougher all the time," said John Hill, director, metals research at Citigroup in San Francisco.
To be sure, gold mining companies are benefiting from bullion's rise. AMEX Gold Miners index <.GDM>, a gauge of gold producers' performance, rallied to a 16-month high on Friday, after skyrocketing 40 percent since the index hit a bottom in mid-August.
During the same period, gold
Gold futures edge up, but close below peak
SAN FRANCISCO (MarketWatch) -- Gold futures posted only a modest gain Monday, as traders digesting reports of a possible major gold discovery and as the dollar attempted to regain some ground following a retreat to all-time lows against the euro.
Gold for December delivery climbed 40 cents to close at $739.30 an ounce on the New York Mercantile Exchange after trading intraday as high as $741.60.
Gold prices touched a daily low of $734, with the pullback possibly "due to the rumored BHP gold discovery," said Mark O'Byrne, a director at GoldandSilverInvestments.com, in emailed comments. "However, it is only a rumor at this stage, and a more likely reason for the pullback is profit-taking and the U.S. dollar's slight recovery from the new lows reached overnight."
Overall, trader sentiment "remains firm as fallout from the recent credit crunch continues to draw safe-haven positioning," said James Moore, metals analyst at TheBullionDesk.com.
Gold closed down $1 an ounce on Friday, but for the week the benchmark contract chalked up a gain of 2.9%, adding $21.10 an ounce
Gold for December delivery climbed 40 cents to close at $739.30 an ounce on the New York Mercantile Exchange after trading intraday as high as $741.60.
Gold prices touched a daily low of $734, with the pullback possibly "due to the rumored BHP gold discovery," said Mark O'Byrne, a director at GoldandSilverInvestments.com, in emailed comments. "However, it is only a rumor at this stage, and a more likely reason for the pullback is profit-taking and the U.S. dollar's slight recovery from the new lows reached overnight."
Overall, trader sentiment "remains firm as fallout from the recent credit crunch continues to draw safe-haven positioning," said James Moore, metals analyst at TheBullionDesk.com.
Gold closed down $1 an ounce on Friday, but for the week the benchmark contract chalked up a gain of 2.9%, adding $21.10 an ounce
UPDATE 4-Gold near 28-year peak, but seems vulnerable
LONDON, Sept 24 (Reuters) - Gold gained in Europe on Monday to trade near 28-year highs, with the dollar's decline to record lows encouraging bullion purchases by investors and speculators.
But sharp upside moves in recent weeks and growing bullish positions on U.S. gold futures were making the metal increasing vulnerable to a correction, analysts said.
Spot gold rose as high as $736.05 an ounce and was at $733.40/734.20 by 1419 GMT, against $731.60/732.40 in New York late on Friday, when it hit an intraday high of $739 -- the highest since January 1980.
"Gold is doing quite well and we see a very steady uptrend at the moment, but we expect a small consolidation at some stage," said Michael Kempinski, senior trader at Commerzbank.
"The dollar is one of the main factors nowadays. Our target is $750 and I don't think we have to wait more than two weeks for that," he said adding, inflation fears and gold's safe-haven appeal were good reasons to buy gold.
The dollar hit a record low against the euro for a third straight session, hurt by worries of possible further interest rate cuts and sluggish economic growth in the United States.
The continued weakness of the U.S. dollar against the euro and other currencies is likely to remain the driving force for gold," Dresdner Kleinwort said in a daily research note.
A weaker dollar makes gold cheaper for other currency holders and often lifts bullion demand. The metal is also generally seen as a hedge against inflation.
Some traders said a drop in oil prices, which fell below $81 a barrel from record highs last week, might cap gains.
"We believe that near-term U.S. dollar weakness will see gold hit our three-month target price of $750/oz, perhaps within the next week," said John Reade, head of metals strategy at UBS Investment Bank.
"But further strong short-term gains from there are harder to see and a speculative-led correction seems likely in the next month or so ... Any signs of a bounce in the U.S. dollar will likely provoke heavy profit taking in gold," he said in a note.
Analysts said investors should not ignore large speculative positions. In the week to Sept. 18, futures speculators had net long positions of 20.4 million ounces -- not far from an all-time high of 22.76 million in September 2005
But sharp upside moves in recent weeks and growing bullish positions on U.S. gold futures were making the metal increasing vulnerable to a correction, analysts said.
Spot gold
"Gold is doing quite well and we see a very steady uptrend at the moment, but we expect a small consolidation at some stage," said Michael Kempinski, senior trader at Commerzbank.
"The dollar is one of the main factors nowadays. Our target is $750 and I don't think we have to wait more than two weeks for that," he said adding, inflation fears and gold's safe-haven appeal were good reasons to buy gold.
The dollar hit a record low against the euro for a third straight session, hurt by worries of possible further interest rate cuts and sluggish economic growth in the United States.
The continued weakness of the U.S. dollar against the euro and other currencies is likely to remain the driving force for gold," Dresdner Kleinwort said in a daily research note.
A weaker dollar makes gold cheaper for other currency holders and often lifts bullion demand. The metal is also generally seen as a hedge against inflation.
Some traders said a drop in oil prices, which fell below $81 a barrel from record highs last week, might cap gains.
"We believe that near-term U.S. dollar weakness will see gold hit our three-month target price of $750/oz, perhaps within the next week," said John Reade, head of metals strategy at UBS Investment Bank.
"But further strong short-term gains from there are harder to see and a speculative-led correction seems likely in the next month or so ... Any signs of a bounce in the U.S. dollar will likely provoke heavy profit taking in gold," he said in a note.
Analysts said investors should not ignore large speculative positions. In the week to Sept. 18, futures speculators had net long positions of 20.4 million ounces -- not far from an all-time high of 22.76 million in September 2005
Canada Dollar Holds Near $1 on Demand for Nation's Commodities
Sept. 24 (Bloomberg) -- Canada's dollar traded near $1, the highest since 1976, and gained against 14 other major currencies as climbing prices for the nation's commodity exports brightened the economic outlook.
The currency rose as gold approached the highest since 1980. Copper also advanced. Commodities account for about half of Canada's exports.
``Strong commodity prices, a healthier economy and the weakening U.S. dollar are the main factors that are supporting the currency,'' said Maria Jones, a currency strategist at TD Securities in Toronto.
Canada's dollar traded at 99.83 U.S. cents at 1:58 p.m. in Toronto, after touching $1.0029. The currency is up 16.7 percent this year, the most against the U.S. dollar among the 16 most- actively traded currencies. It's gained 6.4 percent this quarter, and climbed above $1 on Sept. 20 for the first time since 1976. One U.S. dollar equals C$1.0018.
Canada has benefited from rising demand for copper, gold, wheat and oil from the U.S. and emerging economies such as India and China. The country is the world's largest producer of uranium, the second-biggest exporter of natural gas, and boasts the largest pool of oil reserves outside the Middle East.
Futures Bets
Futures show hedge funds and large speculators held a record net 79,828 contracts betting on a gain in the currency as of Sept. 18 on the Chicago Mercantile Exchange, up 36 percent from the prior week, according to the Washington-based Commodity Futures Trading Commission.
The U.S. dollar touched a record low against the euro today and declined versus the yen on speculation reports will show U.S. economic growth is losing momentum, adding to pressure on the Federal Reserve to cut interest rates again. A National Association of Realtors report tomorrow is forecast to show home resales fell in August to an annual rate of 5.49 million, the lowest in five years, according to the median estimate in a Bloomberg News survey.
The Fed cut its target for the rate on overnight loans between banks by a half-percentage point to 4.75 percent on Sept. 18.
Canadian dollar gains may be limited before a speech and a press conference tomorrow by Bank of Canada Governor David Dodge.
``All eyes are on the press conference,'' said Matthew Strauss, a senior currency strategist at RBC Capital Markets in Toronto. ``There is a risk of a sell-off in the Canadian dollar if he comes out and mentions explicitly that the currency's rise was too sharp.''
As the Canadian dollar strengthens, the nation's exports become more expensive for purchasers using U.S. dollars.
The currency's climb to parity comes on speculation the Bank of Canada will hold its key lending rate at 4.5 percent this year, while the Fed cuts its target further.
The yield on the benchmark two-year Canadian government bond rose 1 basis point, or 0.01 percentage point, to 4.21 percent. The price of the 4.25 percent security maturing in December 2009 fell 1 cent was C$99.26. Bond yields move inversely to prices.
The currency rose as gold approached the highest since 1980. Copper also advanced. Commodities account for about half of Canada's exports.
``Strong commodity prices, a healthier economy and the weakening U.S. dollar are the main factors that are supporting the currency,'' said Maria Jones, a currency strategist at TD Securities in Toronto.
Canada's dollar traded at 99.83 U.S. cents at 1:58 p.m. in Toronto, after touching $1.0029. The currency is up 16.7 percent this year, the most against the U.S. dollar among the 16 most- actively traded currencies. It's gained 6.4 percent this quarter, and climbed above $1 on Sept. 20 for the first time since 1976. One U.S. dollar equals C$1.0018.
Canada has benefited from rising demand for copper, gold, wheat and oil from the U.S. and emerging economies such as India and China. The country is the world's largest producer of uranium, the second-biggest exporter of natural gas, and boasts the largest pool of oil reserves outside the Middle East.
Futures Bets
Futures show hedge funds and large speculators held a record net 79,828 contracts betting on a gain in the currency as of Sept. 18 on the Chicago Mercantile Exchange, up 36 percent from the prior week, according to the Washington-based Commodity Futures Trading Commission.
The U.S. dollar touched a record low against the euro today and declined versus the yen on speculation reports will show U.S. economic growth is losing momentum, adding to pressure on the Federal Reserve to cut interest rates again. A National Association of Realtors report tomorrow is forecast to show home resales fell in August to an annual rate of 5.49 million, the lowest in five years, according to the median estimate in a Bloomberg News survey.
The Fed cut its target for the rate on overnight loans between banks by a half-percentage point to 4.75 percent on Sept. 18.
Canadian dollar gains may be limited before a speech and a press conference tomorrow by Bank of Canada Governor David Dodge.
``All eyes are on the press conference,'' said Matthew Strauss, a senior currency strategist at RBC Capital Markets in Toronto. ``There is a risk of a sell-off in the Canadian dollar if he comes out and mentions explicitly that the currency's rise was too sharp.''
As the Canadian dollar strengthens, the nation's exports become more expensive for purchasers using U.S. dollars.
The currency's climb to parity comes on speculation the Bank of Canada will hold its key lending rate at 4.5 percent this year, while the Fed cuts its target further.
The yield on the benchmark two-year Canadian government bond rose 1 basis point, or 0.01 percentage point, to 4.21 percent. The price of the 4.25 percent security maturing in December 2009 fell 1 cent was C$99.26. Bond yields move inversely to prices.
Miners Prove A Gold Mine
LONDON - As mistrust continues to infect markets, booming emerging market demand for commodities remains something that can be relied upon. To illustrate this, firmer metal prices sent shares in mining companies soaring on Monday.
Xstrata (other-otc: XSRAF.PK - news - people ) was up 4.5%, at £32.85 ($66.41), while Antofagasta (other-otc: ANFGY - news - people )gained 3.7%, to 819.50 pence ($16.57), and Vedanta Resources (other-otc: VDNRF - news - people ) rose 3.6%, to £22.12 ($44.72) on Monday afternoon in London.
Leading all the gainers was BHP Billiton (nyse: BBL - news - people ), up 4.8% at £17.36 ($35.10), on news that it would soon announce a discovery of the world's largest gold resources at its Olympic Dam mine in South Australia. (See: "The Veritable Mother Lode For BHP")
After earlier gains, Forex gold was down $2.10, at $733.25 an ounce, in afternoon trading in London, while silver was up 15 cents, at $13.62 an ounce. Copper was up 1.2%, or $98, at $8,075.50 per metric ton.
The rising price of gold over six straight years has been buoyed not only by the commodity boom but by the weak dollar, for which it acts as an alternative investment. The greenback has been hit hard in recent weeks by a 0.5% cut in American interest rates and weaker-than-expected economic data that has raised fears of a recession. (See: "Notes On The News: U.S. Dollar Hits New Lows")
"Prices remain supported by the continued dollar weakness," analysts at Barclays Capital said in a note. "This week the dollar and in turn gold prices are likely to take their direction from the key US data releases."
The Russian gold mining company Peter Hambro Mining also released a set of better-than-expected half-year results on Monday, sending its shares up 4.2% to £12.09 ($24.44) on Monday afternoon in London. Total gold production had increased by 5% and overall production is expected by analysts at Citigroup to quadruple between 2005 and 2010.
Citi analyst Craig Sainsbury, who has a "buy" rating on the stock and a price target of £18.00 ($36.40), said Peter Hambro was one of the lowest-cost gold miners in the world. But since the company conducts most of its business in Russia, the stock was still high risk: "The company suffers from a higher level of political and sovereign risk than the likes of BHP, Rio Tinto (nyse: RTP - news - people ) or Xstrata," he said. "If the impact of these risk factors is greater than we currently anticipate, then the share price likely won't reach our target price."
Xstrata (other-otc: XSRAF.PK - news - people ) was up 4.5%, at £32.85 ($66.41), while Antofagasta (other-otc: ANFGY - news - people )gained 3.7%, to 819.50 pence ($16.57), and Vedanta Resources (other-otc: VDNRF - news - people ) rose 3.6%, to £22.12 ($44.72) on Monday afternoon in London.
Leading all the gainers was BHP Billiton (nyse: BBL - news - people ), up 4.8% at £17.36 ($35.10), on news that it would soon announce a discovery of the world's largest gold resources at its Olympic Dam mine in South Australia. (See: "The Veritable Mother Lode For BHP")
After earlier gains, Forex gold was down $2.10, at $733.25 an ounce, in afternoon trading in London, while silver was up 15 cents, at $13.62 an ounce. Copper was up 1.2%, or $98, at $8,075.50 per metric ton.
The rising price of gold over six straight years has been buoyed not only by the commodity boom but by the weak dollar, for which it acts as an alternative investment. The greenback has been hit hard in recent weeks by a 0.5% cut in American interest rates and weaker-than-expected economic data that has raised fears of a recession. (See: "Notes On The News: U.S. Dollar Hits New Lows")
"Prices remain supported by the continued dollar weakness," analysts at Barclays Capital said in a note. "This week the dollar and in turn gold prices are likely to take their direction from the key US data releases."
The Russian gold mining company Peter Hambro Mining also released a set of better-than-expected half-year results on Monday, sending its shares up 4.2% to £12.09 ($24.44) on Monday afternoon in London. Total gold production had increased by 5% and overall production is expected by analysts at Citigroup to quadruple between 2005 and 2010.
Citi analyst Craig Sainsbury, who has a "buy" rating on the stock and a price target of £18.00 ($36.40), said Peter Hambro was one of the lowest-cost gold miners in the world. But since the company conducts most of its business in Russia, the stock was still high risk: "The company suffers from a higher level of political and sovereign risk than the likes of BHP, Rio Tinto (nyse: RTP - news - people ) or Xstrata," he said. "If the impact of these risk factors is greater than we currently anticipate, then the share price likely won't reach our target price."
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