South African Gold Stocks Rally in Longest Stretch in 10 Months

South African gold stocks rallied a sixth day in the longest stretch of gains since March as metal prices climbed on speculation that the U.S. may hold off on raising interest rates and debate on European stimulus intensified.

The five-member FTSE/JSE Africa Gold Mining Index gained 7.2 percent to 1,420.05 by the close in Johannesburg, the highest since Sept. 9. That extended the gauge’s increase this year to 24 percent, while bullion futures rose to a one-month high today on the Comex market.

Investors in Africa’s biggest producer of the metal sought gold-related assets as U.S. data that showed falling wages added to speculation about when the Federal Reserve will raise lending rates. In Europe, South Africa’s biggest regional trading partner, debate over whether policy makers should add monetary stimulus to the economy intensified before its Jan. 22 meeting.

“Perhaps investors are switching out their safe-haven investments into gold, instead of the U.S. dollar,” Jonathan Bachrach, a money manager at Vunani Private Clients, which oversees about 600 million rand ($54 million), said in an e-mailed response to questions. “The anticipation of stimulus in Europe should lead to a higher gold price.”

Harmony Gold Mining Co. led gains by South Africa’s bullion stocks, advancing 11 percent to 31.41 rand. Gold Fields Ltd. rose 9.5 percent to 67.45 rand.The lone decliner on the index was Pan African Resources Ltd., which fell 0.5 percent to 2.11 rand to pare its 2015 gain to 8.8 percent.

“When the U.S. made use of quantitative easing, gold spiked and I think we’ll see a similar movement in gold because of Europe,” Bachrach said, referring to central bank monetary stimulus. “I believe the rally still has legs to run more.”

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