May 16 (Bloomberg) -- South African gold mining shares finished trading less than 0.1 percent higher, having reached a two-year low after gold entered a so-called bear market as bets that Greece may quit the euro eroded the metal’s appeal.
The FTSE/JSE Africa Gold Mining Index slid as much as 3 percent to the lowest since February 2010. AngloGold Ashanti Ltd., Africa’s biggest producer of the metal, rose 0.9 percent to 263 rand, reversing a 3.1 percent decline. Bullion for immediate delivery slipped as much as 1.1 percent to $1,526.97 an ounce, the cheapest since Dec. 29, before recovering to $1,542.68 an ounce by 5:05 p.m. in Johannesburg.
Concern about Greece exiting the euro boosted the dollar, making it more attractive than bullion to some investors. A second Greek vote will be held, possibly next month, as gridlock followed a May 6 ballot in which voters rejected the austerity program that underpins the country’s bailout accords. German Finance Minister Wolfgang Schaeuble called the new election a referendum on whether Greece stays in the common currency.
“Commodity prices were unrealistically high as a direct result of a combination of easy and cheap money from quantitative easing and the threat of inflation,” Peter Major, an analyst at Cadiz Corporate Solutions, a unit of Cadiz Holdings Ltd., said by phone from Cape Town. “The market is efficient and it looks ahead. Mining houses have been weak for four or five months now; investors definitely saw weaker prices going forward.”
The Dollar Index, a six-currency gauge, climbed for a 13th day, the longest winning run since its inception. The euro dropped to $1.2681, the weakest since Jan. 17.
Gold’s earlier retreat took it 20 percent below its all-time high of $1,921.15, hit on Sept. 5. Spot gold’s so-called 14-day relative strength index dropped to 20.93, below the level of 30 that some analysts regard as signaling a rebound.
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