South Africa’s gold-stocks gauge fell to the lowest level in in 4 1/2 years as the price of the metal retreated.
The FTSE/JSE Africa Gold Mining Index declined 6.8 percent to 1,512.78 in Johannesburg, the six-member gauge’s lowest level since Nov. 20, 2008.
Gold for immediate delivery fell as much as 8.6 percent to a two-year low on expectations that demand for haven assets will contract as the global economy improves. South Africa is the world’s fifth-biggest producer of the metal.
“Sentiment toward the gold sector is very despondent,” Simon Fillmore, chief executive officer of Independent Securities (Pty) Ltd., said by phone from Johannesburg. “Gold shares have been destroyers of shareholder value over a long period of time.”
Sibanye Gold Ltd., South Africa’s second-biggest producer of the metal, slumped 10 percent to 10.67 rand, the lowest level since the company listed on Feb. 12. Harmony Gold Mining Co. fell 8.9 percent to 45.61 rand, the lowest level in almost eight years. AngloGold Ashanti Ltd., the world’s third-biggest gold producer, declined 7.3 percent, the biggest drop since April 3, 2009, to 175 rand.
The gold-mining gauge’s 14-day relative strength index slipped below 30 on April 11 and was at 20, the lowest level since April 6. A reading below 30 signals to technical analysts a security is undervalued and poised to rebound.