Newcrest Mining Ltd. (NCM), the worst performer this year among Australia’s 50 largest publicly traded companies, rose the most in two weeks in Sydney trading to lead gains by gold producers after the metal touched its highest level since June.
Newcrest rose 7 percent to A$13.97 at 11:33 a.m. in Sydney, the most on an intraday basis since Aug. 12. Resolute Mining Ltd. (RSG) advanced 7.4 percent and Perseus Mining Ltd. (PRU) gained 6.4 percent. Australia’s benchmark S&P/ASX 200 index was little changed.
Gold prices rose above $1,400 for the first time in more than two months as investors weighed speculation the U.S. Federal Reserve’s $85 billion a month of asset purchases could be sustained for longer as data showed U.S. new-home sales fell more than 13 percent in July. Bullion for immediate delivery traded at $1396.03 at 11:34 a.m. in Sydney, after it had earlier risen to as much as $1,407.18 an ounce, the highest price since June 7.
Producers including Newcrest may look to seize on a rally in gold prices to raise capital, said Jo Battershill, a resources analyst with UBS AG in Sydney.
“If there’s an opportunity to raise money in the market, now’s probably the time,” he said by phone. “I don’t know how long the strength in the gold market is likely to last, it seems to be a week by week proposition depending on what comments are made by the Fed.”
To contact the reporter on this story: David Stringer in Melbourne at email@example.com
To contact the editor responsible for this story: Jason Rogers at firstname.lastname@example.org