GOLD STOCKS NEWS – Gold stocks advanced Tuesday as the Market Vectors Gold Miners ETF (GDX) climbed 0.5% to $55.88 per share. The modest rise in gold stocks and the GDX came as gold bullion held steady near $1,550 per ounce. The S&P/TSX Global Gold Index, Canada’s leading basket of gold stocks, rose 0.4% alongside the GDX.
Gold stocks began the week on a sour note yesterday as the GDX opened higher, but ended the day lower by 0.8%. The GDX was initially boosted by the yellow metal, but succumbed to broad-based selling stemming from escalating sovereign debt concerns in Greece and Italy. With the concerns dissipating somewhat on Tuesday and European markets bouncing back into positive territory, gold stocks followed suit.
With today’s strength in gold stocks, the GDX extended its monthly gain to 2.4% and is on pace for its first monthly advance since April. The GDX lost 7.0% in May and 6.1% in June and remains lower by 9.4% year-to-date. This compares rather unfavorably to the 9.1% gold price rally in 2011. However, in recent weeks the gold stocks ETF has begun to close the gap with the yellow metal and some investors appear to be positioning themselves for further outperformance by the gold stocks.
While news in the gold stocks sector was minimal on Tuesday, one company making headlines was Barrick Gold (ABX), the largest component of the GDX. OptionMonster.com noted that options activity in ABX yesterday was nearly three times its daily average.
“Most of the activity was in the calls, specifically in a spread between the July 35 and January 30 contracts,” the firm wrote. “A trader sold 17,350 of the July calls for $11 at less than the open interest of 17,447 at that strike. At the same time, the trader bought 17,350 January 30 calls for $16.20, far exceeding the open interest and therefore opening a new position.”
OptionMonster went on to say that “With expiration approaching at the end of the week, this trade is a roll of the long calls out in time but to a lower strike price. This limits the time premium paid for but is cheaper than buying the stock outright.” In morning trading on Tuesday, ABX inched higher by 0.2% to $45.97 per share.
Other notable gold stocks posting gains included GDX components AngloGold Ashanti (AU), Gold Fields (GFI), and Kinross Gold (KGC). AU, GFI, and KGC advanced 1.2%, 2.0%, and 0.9%, respectively.
Klondex Mines Confirms New CEO and Board
Klondex also announced that Blane Wilson has been named President and CEO, expanding upon his prior role as President and Chief Operating Officer. William J. Solloway, who has stepped down as CEO, remains as Chairman of the Klondex Board. Full Klondex News Release.
* Klondex’s new Board of directors has appointed a new Audit Committee and expanded the scope of its prior Compensation Committee to form the Compensation and Governance Committee.
* Directors Andre Douchane, Robin Goad, and Ken Stowe have each agreed to serve on both the Audit Committee and the Compensation and Governance Committee.
