Gold shares held up particularly well in the face of broad-based liquidation on Wall Street on Monday.
Despite the 1.7% sell-off in the the price of gold, and the over 100-point decline in the Dow Jones Industrial Average (DJIA), the AMEX Gold Bugs Index (HUI) closed lower by just 0.7% at 603.57. The recent trend of gold equities outperforming the yellow metal has accelerated in recent weeks, as the HUI is now higher in September by 0.9% in spite of a 2.5% slide in the price of gold.
Notable gold stocks dragging the HUI lower on Monday were AngloGold Ashanti (AU) and Kinross Gold (KGC), which fell 1.8% and 2.5%, respectively.
On the positive side, however, was Newmont Mining (NEM), which climbed 0.8% after announcing plans to enhance its gold price-linked dividend program. The Company will now offer shareholders an additional $0.075 per share for each quarter in which its average realized gold price surpasses $1,700 per ounce, plus a further $0.025 per share for each quarter over $2,000 per ounce.
In today’s Wall Street Journal, Caesar Bryan – manager of the Gamco Gold Fund – contended that with gold prices near record highs, the likelihood of dividend hikes across the gold sector is rising. ”We think they (gold companies) will be returning capital to investors instead of taking it from investors, which is what they’ve historically been good at,” Bryan asserted.
The story also included comments from Van Eck Global gold strategist Joe Foster, who presented his bullish case for the sector. ”We haven’t seen [low] valuations like these since 2008,” he noted. Foster also contended that from a financial perspective, gold mining companies have “never been in better shape.”
Claude Resources Hits High Grade Gold at Seabee
Claude is now planning to drill an additional 20,000m this year at its Seabee Gold Operation, bringing year end drilling to approximately 100,000m. Exploration targets include the Seabee Gold Mine, the Santoy 8 Gold Mine, Santoy Gap, L62 Zone and Neptune. Full Claude Resources Press Release.
