South Africa Gold Stocks Soar on Weaker Rand: Johannesburg Mover
South African gold mining stocks rose the most in more than a month on a weakening currency and stronger gold price.
The six-member FTSE/JSE Africa Gold Mining Index surged 5.5 percent, the most since March 7 on a closing basis, to 1,434.20 as of 1:56 p.m. in Johannesburg. All the gauge’s component shares rose. Harmony Gold Mining Co Ltd. (HAR) surged 9.4 percent to 38.50 rand, the most since March 2011, clipping four days of declines.
The rand, the worst performer among 16 major currencies tracked by Bloomberg after the Japanese yen this year, weakened beyond 10 per dollar for the first time since 2009 today, and last traded at 9.9928. The spot price of gold rose as much as 1.3 percent, the most in a week, and traded 0.5 percent higher at $1,400.03 per ounce.
“The rand, which has underpinned them all week, is setting fresh lows today,” Ryan Wibberley, a Cape Town-based trader at Investec Asset Management, said by phone today. “The gold miners are underpinned by this persistent rand weakness, the rand-price of gold is up almost 10 percent in the last two weeks.”
Johannesburg-based Harmony Gold, one of the three biggest gold miners, is more geared to the rand-price of gold than competitors with operations in other countries, Wibberley said.
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